Most U.S. citizens or eligible non-citizen students usually apply for what are known as federal student loans, but the average international student does not qualify for these loans, and scholarship opportunities are generally fewer. Therefore, if you have financial needs for your studies, you will have to go through a private lender. These student loans can only be used to pay for education-related expenses, including attendance, room and board, books and insurance.

However, there are not many options for these private loans. This is mainly because international students are required to show proof of sufficient funds before they can study in the U.S., indicating that they will be able to pay for tuition, fees, and other living expenses while staying in the country. Because of this prerequisite for studying in the U.S., the demand for loans for international students in the U.S. is not high.

Can I apply for an international student loan in the U.S.?

First, there are a few basic conditions that must be met to qualify for an international student loan in the United States:

You must not have a status other than that of an international student.

Must be attending a legally accredited school.

As far as loan success is concerned, most private lenders assess the creditworthiness of individuals, but international students do not have any credit history in the U.S., nor do they have any immediate family in the U.S. that can apply for a loan. Therefore, most lenders will require a co-signer, either a U.S. citizen or an eligible non-citizen.

The co-signer does not have to be related to the student, but must be someone close to the student and must have lived in the U.S. for at least two years and have good credit.

Other factors affecting the loan application are mostly subjective, such as the school the student is attending, the type of degree, the program of study, or the student’s home country, basically assessing the student’s earning potential to help him/her repay the loan.

How to choose a lender?

While international students do not have many options compared to local U.S. students, it is still worth exploring. Since students may not be familiar with the terminology and process related to loans, it is advisable to first explain one’s needs to the relevant unit of the school one is attending, so that the school’s professionals can assist in processing and understanding the terms and conditions. Apart from this, international students can also compare lenders based on some basic items before applying for a loan:

Interest rate: The form of interest rate on the loan is very crucial and can basically be categorized as fixed rate or variable rate. Variable rates may be lower initially, but because the numbers change from year to year, they may not be favorable for international students. Basically, the fixed rate option is better for most people.

Repayment

Some lenders may require interest or payments to be made while the student is still enrolled in the program; others allow the borrower to make payments after graduation; and some banks allow the borrower to make his or her own choices.

Term

Lenders usually offer borrowers a choice of repayment terms. When borrowing, international students should compare the cost of different repayment terms and consider the total cost over the life of the loan, whichever is easiest for them to afford.

Flexible terms: Students are also advised to be aware of the lender’s flexible terms for special circumstances before borrowing, such as a grace period for payment, which allows international students to suspend repayment of the loan in the event of a financial emergency or loss of employment.

Discounts

Some lenders offer interest rate discounts based on the borrower’s repayment status. For example, borrowers who apply for automatic withholding, or borrowers who make a certain number of consecutive payments on a regular basis.
Co-Signer Release: Generally, international student loans require a co-signer and can usually only be released under certain circumstances, such as the student borrower becoming a U.S. citizen or permanent resident, or making a certain number of payments on time.

Can I apply for a refinance on my U.S. student loan?

A refinance is a common means of consolidating multiple loans into a single payment, with the opportunity to get a better interest rate or lower monthly repayment costs. This is usually more likely to happen to students who are extending their education, such as pursuing a degree after graduation.

While it is possible for US students to apply for a refinance loan, the process is very difficult and usually requires a solid credit history and income, both of which can be challenging for students in the US. Of course, if you can establish credit as a U.S. citizen or permanent resident, you have a better chance of success.

Of course, there are risks associated with refinancing, so when applying for a refinance, you should consider whether it is necessary and whether it will be beneficial for you to repay the loan overall. Some of the things that international students should consider include

  • Is the interest rate of the refinancing loan lower than the current interest rate?
  • Is the monthly repayment fee after the transfer lower than the current one?
  • If there is a co-signer, does the remittance allow for the removal of their guarantee?
  • If the answer to these questions is yes, a subloan may be a better route to a student loan.

U.S. International Student Transfer Loan Requirements

To increase your chances of a successful student loan transfer, it is recommended that you look for ways to build up your credit history before applying, such as by making purchases on a secured credit card.

The type of job you have will also help you in your application, for example, if you work for a large and stable company, you will have a higher chance of getting approved. Finally, maintaining the original co-signer or finding another relative or friend with citizenship or permanent residence status to act as a guarantor can also help with the application.

How do international students apply for a refinance?

  1. Check the visa status: Some lenders will require the borrower’s visa to be valid for at least two years. If the status is too short, it is advisable to complete the visa extension before applying for a refinance.
  2. Ensure that you meet the credit score and income requirements: when applying for a refinance, you must have a credit score of at least 600, and you should have evidence that you have enough income to repay the loan on time.
  3. Compile documentation: In addition to proof of visa status, applicants will need to show proof of income and assets, such as a recent statement from a U.S. financial institution, proof of employment from an employer, proof of a college scholarship, or proof of financial aid.
  4. Find a co-signer: Even if the lender does not require a co-signer, having a co-signer does increase the chances of approval.
  5. Compare different lenders: Each lender has different eligibility criteria. One of the things to keep in mind is that most US lenders do not accept credit scores from overseas, but in recent years lenders have been evolving their loan products for international students, so if there is a need for a refinance, it is recommended to keep an eye out for new options offered by lenders.
  6. Submit your application