International Student Loans: Best Lenders & What to Consider

Posted by in Loans | Updated on September 16, 2022

Attending a university in the United States is a tremendous and exciting opportunity for international students.

The benefits can be great, but what about the cost? Unfortunately, a college education in the US is very expensive—for citizens and international students alike.

Most students utilize student loans to help cover their expenses while they take courses toward their degree. For US citizens, federal student loans make this process very straightforward.

Student loans for international students are often not as simple. You will not be eligible for federal student loans and getting one from a private lender can be difficult.

In this article, we will discuss everything you need to know about getting a student loan as an international student including the best lenders and what to consider when choosing one.

Best International Student Loan Lenders

Lenders who give international students loans can be tough to come across, so we’ve put together this list of the top 6 lenders who provide loans to students like yourself.

International Student Loans That Don’t Require a Cosigner

While the options for loans without a cosigner are much more limited, some private lenders look to help international students specifically.

MPOWER

MPOWER is a lender that is specifically designed for international students. They don’t require a cosigner or any US credit history and instead consider the applicant’s academic success and career path to determine loan eligibility.

The only downside to MPOWER is that they tend to favor students who they determine will likely have a high earning potential. Since many students may not be able to show high earning potential at the moment, MPOWER may not be the easiest lender to qualify for.

Either way, MPOWER is one of the best student loan lenders for international students and is a great place to start your search.

Prodigy Finance

Another international student loan company is Prodigy Finance. The catch with them, however, is that they only offer student loans to students seeking graduate degrees at certain schools.

If you’re looking for a student loan to cover your master’s degree in business, engineering, law, or public policy, definitely take a look at Prodigy Finance.

Interest rates can be pretty high compared to federal student loans, but if you need a student loan to study in the US, it may be worth it.

International Student Loans That Do Require a Cosigner

There are many more private student loan options for international students with cosigners.

These loans often have much more competitive interest rates, less fees, and more repayment terms.

Ascent Student Loans

Ascent is one of the few private student loan lenders with options specifically for international students.

Like other lenders in this section, Ascent does require a creditworthy cosigner that is a US citizen or permanent resident.

Loan options include Undergraduate, MBA, Dental School, Law School, and General Graduate School.

In addition to a cosigner, you’ll need to verify your individual resident status (accepted visas include F-1, F-3, G Series, H-1B, H-1C, H-3, J-1, L-1, M-1, M-3, T-1, TN), meet minimum credit score requirements, and upload identification.

Citizens Bank

Citizens Bank is another option for both undergraduate and graduate international students to consider.

Rates are reasonable and borrowers have the option of choosing among multiple repayment terms.

To be eligible for a Citizens Bank student loan, you’ll need a creditworthy cosigner that is a US citizen or permanent resident.

One of the great benefits of Citizens’ student loans is that you are eligible for an interest rate reduction of 0.5 percentage points by enrolling in automatic payments.

Discover Student Loans

Discover offers student loans with no fees, rewards for good grades, and easy processing. They also will cover up to 100% of all of your school-certified college costs.

This makes Discover great for those who are self-supporting themselves through college and will need as much money as they can get to help them financially through their college journey.

These loans are available to DACA recipients and students without a Social Security number. You will, however, need a cosigner that is a US citizen or permanent resident.

College Ave

College Ave’s private student loans are available for undergraduate students, graduate students, and even parents of undergraduate or graduate students.

They require a cosigner for students with a limited or no credit history which, unfortunately, is the case for most international students.

If you do qualify, College Ave offers a variety of repayment terms and in-school repayment options ranging from full principal payments to deferred payments.

What to Consider With Student Loans for International Students

The process of getting a student loan can be intimidating, especially if you are new to the United States. Throughout the rest of this article, we hope to alleviate any fears and help you find the perfect student loan for you.

There are several things to consider when choosing a student loan, some of which may be more important for you depending on your situation.

1. How big of a student loan should I get?

At first glance, a loan might seem like an awesome way to get a huge sum of money to spend however you want. But don’t forget—you will have to pay this money back eventually. The interest on a large loan will add up very quickly as well.

When on the hunt for the perfect international student loan—a good place to start is determining how much you need and how much you can afford. This will help make sure that you don’t take out too much which could be a very expensive mistake.

This is not meant to discourage you but simply to make you aware. Don’t forget, the idea of student loans is that the education you are seeking will make paying these loans off both possible and well worth it in the long run!

2. What are the interest rates like on international student loans?

As with all types of loans, the interest rate that you get on a student loan will depend on a few different factors. The first and often biggest variable is whether it is a federal or private loan. Federal student loans usually offer lower interest rates but are not available for non-citizens.

Other things that come into play are your and your cosigner’s credit history and credit score. Lenders also consider the level of study the loan is for (undergraduate, graduate, etc.).

Credit does not usually come into play for international students, as they have no credit upon coming to the US. As for the level of study, undergraduate loans tend to charge higher interest rates than those for graduate study.

Taking all of these things into consideration, the average student loan interest rate falls somewhere between 2 and 14%, with the lower the rate the better.

3. Type of interest

You may have the choice of a fixed or variable interest rate.

Fixed rates stay the same over the life of the loan while variable rates fluctuate based on the market.

There is no right answer to whether a fixed or variable-rate international student loan is better.

If you like the security of knowing your rate will always remain the same, go with a fixed rate. If you like the idea of having a lower rate upfront, a variable rate may be the better option.

4. What are the terms and conditions of student loans?

Student loans can sometimes be complicated, but the basics are the same across the board and are relatively simple to understand.

Each loan has repayment plan options. These are some general types that will be helpful to know in conducting your search.

Standard and Extended Repayment

Standard repayments are just a fixed amount that you will pay each month, typically over 10 years or less. An extended repayment plan works the same way, just over a longer period, such as 15 to 20 years.

Graduated Repayment

On a graduated repayment plan, your monthly payment will slowly increase over time. The hope is that you can afford higher and higher payments as you graduate and advance in your career.

Income-Driven Repayment

Though these are typically only offered for federal student loans, you may find a private lender offering them.

Income-driven repayment plans are similar to a graduated plan but required payments go up or down depending on your income.

There is much more security with these repayment plans, as your required payments will go down if you lose your source income at some point.

The Process of Getting an International Student Loan

Applying for loans of any kind can seem like a long and confusing process that will leave many wondering where to begin.

Don’t worry!

There are several steps that you have to take to get an international student loan, but lenders continue to make it easier and easier with advancements in technology.

Timeline – When Should I Apply for a Student Loan?

When it comes to applying for a student loan, the sooner, the better.

Once you are accepted to a school, you should start your search. Simply being accepted isn’t in and of itself a binding agreement, so you are always free to back out if you decide to go another route.

Once you have been accepted and provided all the necessary documentation (discussed below), the loan funds are usually dispersed within a week to 2 months.

You will want to have your funds in plenty of time, but if something does happen, don’t panic. Most colleges have some leeway when it comes to paying tuition.

What Documentation Do I Need for an International Student Loan?

As with most of the topics discussed, you would guess that the necessary documentation is going to depend on the lender and the loan.

This part of the process should be relatively easy as they will usually not require anything you haven’t already provided to your school.

Here’s what you’ll need:

  • College acceptance: Most lenders will require that you be accepted and enrolled at an institution and be seeking a degree.
  • Visa: Your student visa, (F-1 visa) will need to be valid at the time of application
  • United States Address: You are not expected to have a permanent residence, but you will have to provide the address of the location you plan on staying in the US.
  • Other supporting documents: Instead of a Social Security card, international students can usually supply one of the following visas: F-1, H1-B, L-1; OR Forms DS-2019, I-20, I-766, or I-797

What is a Cosigner? Do I Need One for My Loan?

A loan cosigner is someone who is agreeing to accept liability for your loan if you can’t make payments. They are usually required to have a good credit score and be a US citizen or permanent resident.

Finding a cosigner that meets all of these requirements can be next to impossible for someone who is coming to the US for the first time.

Luckily, there are international student loans for those without cosigners available—including both federal and private options.

Reviewing All Financing Options for International Students

Outside of loans for international students, there are some other ways to pay for college that you should consider:

1. University Scholarships

College scholarships provide funding for any number of areas of your program education. Scholarships are usually provided by private organizations, companies, universities, or individuals and can be for any amount. Scholarships are usually based on merit, meaning academic, social, athletic, or any other exceptional quality that someone wants to award.

Scholarships may be applied directly towards tuition and expenses, or simply be a check written to you to spend however you see fit during your studies. Merit-based scholarships may require that you continue to show excellence in the area in which you earned it, i.e., a scholarship for a 3.5 GPA may require that you maintain a 3.5 GPA each year.

Scholarships can be challenging to earn, and there is no guarantee, but the good news is that there are thousands to apply for. You can find scholarships specifically for single moms, chess players, race, location, and even most creative sandwich maker. Another big positive is that scholarships do not have to be paid back — just earned.

There are tons of places online where you can find scholarships. Here’s a list of just a few sites where you can search for scholarships that you may qualify for:

2. University Grants

Student grants are very similar to scholarships and people often use the terms interchangeably. Although they are alike in that neither must be paid back, they differ in that most grants are need-based rather than merit-based.

The Federal Pell Grant is just one example of a need-based grant—and is one of the most popular grants for US students. However, to qualify for the Federal Pell Grant, you must be a permanent resident. Unfortunately, this means that most international students will not qualify for the Pell Grant.

Grants can still come from public and private organizations but are generally awarded through the federal and state governments or the university itself. Grants are usually based on economic status and income and are designed to provide additional relief for lower-income students. They typically do not have tough academic requirements but may have minimum standards that students must maintain.

There are some merit-based grants, and these are usually more typical for grants that apply to international students. One of the most popular merit-based grants for international students is the Fulbright Education Exchange Program. Students who receive this grant are given funding by the US Department of State for transportation and full or partial tuition. You can check the Fulbright Scholars website for a list of countries from where international students can apply for this grant.

Many other grants are available such as state grants, military grants, and private grants. Here are just a few other grant opportunities:

3. Student Loans

Of these three financing options, a student loan is the one that stands out the most from the other two. Loans are often the last option that students resort to for one big reason: the money has to be paid back eventually. And not just the amount that you borrow, but interest as well.

Most students would prefer scholarships or grants over loans. These options are indeed more desirable, but in reality, even the students who are awarded them often need additional financial assistance. Scholarships and grants can be awarded in a variety of amounts and could be lost or reduced throughout your time in college.

Loans do come at a price, but they are a more widely available and reliable source of funding. This is especially true for international students, as you are ineligible for most US federal scholarships and grants.

Should I Refinance My Student Loan?

Refinancing is a common term that you have probably seen numerous times throughout your research. At this stage, this probably isn’t something you really need to worry about, but we will discuss it briefly so you know all of your options.

Simply put, student loan refinancing is when one lender pays off your current loan and gives you a new one at a lower interest rate.

For students pursuing extended degrees (law, medicine, etc.), the savings can be in the tens or even hundreds of thousands of dollars.

To qualify for refinancing, you will have to show good credit history, income, and a strong debt-to-income ratio.

>> Learn More: Guide to Refinancing International Student Loans

Wrapping It Up

After reading this article, you should possess all of the necessary information that you need to make a good, informed decision about student loans and other funding.

Since there are a limited number of lenders that are specifically designed to help international students, it will probably not take you long to find the right choice for you.

Good luck in the United States and good luck studying!

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About Stilt

Stilt provides loans to international students and working professionals in the U.S. (F-1, OPT, H-1B, O-1, L-1, TN visa holders) at rates lower than any other lender. Stilt is committed to helping immigrants build a better financial future.

We take a holistic underwriting approach to determine your interest rates and make sure you get the lowest rate possible. 

Learn what others are saying about us on Google, Yelp, and Facebook or visit us at https://www.stilt.com. If you have any questions, send us an email at [email protected]