Personal Loans For International Students: The Complete Guide

Updated on April 10, 2024

At a Glance

  • Before applying for a personal loan, explore alternative options for covering educational expenses, such as financial aid, scholarships, and support from extended family.
  • If additional financial support is needed, personal loans for international students can be considered, provided by private lenders for various purposes, including living expenses.
  • Interest rates and loan terms vary based on the borrower’s financial background, and most lenders require a cosigner for international student loans.
  • Top lenders in this category include Stilt, LendingClub, and SoFi, each with unique features and benefits.

The cost of a college education in the United States has been steadily increasing and in 2012, roughly 71% of international students graduating from four-year colleges needed to take out loans to fund their education. With the extra tuition hike for international students, along with the expenses that come along with international travel and living, international students often have to face financial hardships just to make their education goals possible.

However, international students find that with their lack of credit history in the US, the process of applying and qualifying for a loan can quickly become stressful and complicated. To help you out, we’ve put together some of the best options to help fund your education in the US.

Before Applying for a Personal Loan

Please keep in mind: this is a serious financial decision. Before considering student loans for international students, you should first take a look at other options to help you cover the cost of education.

Financial Aid for International Students

Although financial aid is often limited for international students, there are some available options depending on your immigration status. The most noteworthy is completing the Free Application for Federal Student Aid (FAFSA) if you are a permanent resident. The FAFSA determines the Expected Family Contribution (EFC) amount that the government believes your family will be able to put aside to pay for your education, which will then allow you to qualify for government aid and loans.

For the majority of international students who are not yet permanent residents of the US, the next option is turning to the institution you plan to attend to see if they will offer you any scholarships or grants. Most US colleges will limit their need-based aid for international students, but many of their merit-based scholarships will be available to all students, regardless of residency status.

If you’d like more in-depth information on financial aid, check out the following guide: Guide to International Student Financial Aid.

Additionally, you can find a financial aid counselor or immigration counselor at your school to help you find their institutionally-funded scholarships that you may qualify for. 

Scholarships for International Students

There are hundreds of scholarships offered each year, often with no residency qualifications to apply. Online scholarship databases can help you find scholarships that you may qualify for based on your major, career goals, personal identity, and more.

InternationalStudent.com is just one example of a database site that offers a free scholarship database specifically for international student scholarships. Some other great scholarship search sites include Fastweb’s database of 1.5 million scholarships and the CollegeBoard’s database of over 2,200 programs.

Financial Support from Family for International Students

Reaching out to your extended family for financial support can be a great way to obtain more funds for your college education. Students often overlook anyone other than their immediate family to fund their education, but many extended family members may be more than willing to support their niece, nephew, or cousin, on their college journey by pitching in some money.

Personal Loans for International Students

Some international students can cover their entire tuition using just the financial resources discussed above, but that’s not always the case. For those students who need more financial support (including DACA students in need of a loan), there are personal loans for international students.

We cover the essentials down below but go much more in-depth in the following article: Guide to International Student Loans. We laid out information about general terms and conditions, interest rates, documentation needed for loans as an international student, and much more.

Now, onto the question at hand:

What are Private Loans?

There are two main types of student loans: federal student loans and private student loans. Federal student loans are funded by the government whereas private student loans are offered by banks, credit unions, or schools.

For most international students, they will turn to private loans since federal loans usually require permanent residency status to qualify. However, due to the sheer number of private loan options available (even including medical student loans), students can easily find affordable private loan options that will work best for their particular financial situation.

What are Personal Loans for International Students?

A personal loan is money given to a borrower which they can use for any purpose they would like. Therefore, the funds do not need to go directly into paying tuition, but many other things: you could cover living/food expenses, personal purchases, and even use the student loan funds to buy a car (which we do not recommend!). 

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International students, manage your personal loans effectively with our detailed checklist. Download for financial success!

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Interest Rates for International Student Loans

Interest rates vary based on the lender you choose and your own financial background. Borrowers looking for a loan with no credit history (or poor credit history) will usually receive a higher interest rate compared to someone with a high credit score and long credit history.

However, many lenders are turning to a holistic approach to determine interest rates. By looking at an applicant’s education, income, career, and more, lenders may provide a lower interest rate by determining if the applicant is a responsible borrower despite their lack of credit history.

Loan Terms for International Student Loans

Loan terms can vary anywhere from just one year to 25 or more years. The lender may provide many loan term options from which the borrower can choose the best option based on when they believe they will be in the best financial situation to pay back the loan. Furthermore, it’s important to remember that in the future, you will likely be able to refinance your international student loan, which will ultimately either lower your payments or change the length of time required for paying back the funds you’ve been loaned. 

Cosigners for International Student Loans

Since many international students don’t have a previous credit history in the US, they will find that most lenders will require a cosigner for international student loans to be approved.

A cosigner assures the lender that if the borrower fails to pay back the loan, the cosigner will then be responsible for repaying the loan.

Most of the time, the cosigner is required to be a US citizen or permanent resident which is difficult for international students to find. However, there are international student loans that do not require a cosigner such as Stilt and SoFi.

Top Lenders of Personal Loans for International Students

There are hundreds of lending options available for nonresidents — particularly students — yet only a select few are truly good.

To help jumpstart your search for the best personal loan option that will meet your needs, here is our list of the top three student lenders for international students.

Stilt

Stilt is at the top of our list because they specifically seek to help international students fund their college education. Founded by two international students themselves, Stilt offers low-cost loans to international students without requiring a cosigner or prior credit history in the US.

Applying for a loan through Stilt is easy through their online process, and all applicants receive a decision within 24 hours of their application.

LendingClub

LendingClub offers a quick application and approval process, with an application time taking only a few minutes to complete. After reviewing their loan offers, you can immediately choose which one you like the best and receive the funds within the next few days. With Lending Club, you can borrow up to $40,000 and start paying it back as soon as you like with no prepayment penalties.

Lending Club is a great option for students who already have a credit history in the US as they do require a minimum credit score of 600. However, you do not need a cosigner and applying for one of their loans will not affect your credit score at all.

SoFi

SoFi is one of the most popular lenders out there due to their low-interest rates and benefits. SoFi has a “community-first approach” offering services that are designed for their members to help them succeed. These benefits include networking events like happy hours and dinners, career fairs, and complimentary financial advising.

In addition, SoFi looks at your education, income, and other factors when evaluating your loan application to determine the lowest rate for you. This is ideal for students with a limited borrowing history as they will consider other factors besides credit score to give you a great rate.

Comparison of the Top 3 International Student Loan Lenders

LenderInterest RateLoan TermCosigner Option?
Stilt7.99%–15.99%2-5 yearsNo
LendingClub5.98%–35.89%3-5 yearsYes, there is an option to have a cosigner
SoFi6.199%-15.365%3-7 yearsNo cosigner requirements but possibly a cosigner option

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Conclusion

Ultimately, which lender you choose to borrow from for your personal loan will come down to your needs as a borrower, especially as an international student. But with the information above, you should be able to make an informed decision when you go to borrow. And if you’re looking for a trustworthy platform for comparing lenders side-by-side, check out Stilt’s Loan Application Tool.

Frequently Asked Questions (FAQ)

Can International Students Obtain Personal Loans in the U.S.?

Yes, international students can obtain personal loans in the U.S. However, they might face more stringent requirements and may need a U.S. cosigner or demonstrate a reliable source of income.

What Are the Requirements for International Students to Get Personal Loans?

The requirements typically include having a valid student visa, enrollment in a U.S. educational institution, a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), and proof of income or a cosigner.

Do International Students Need a Cosigner for Personal Loans?

Many lenders require international students to have a cosigner who is a U.S. citizen or permanent resident with a good credit history. However, some lenders may offer loans without a cosigner.

What Types of Personal Loans are Available for International Students?

International students can access various types of personal loans, including student-specific loans, general personal loans for expenses like housing and travel, and sometimes specialized loans based on their field of study.

How Do Credit Scores Affect Loan Options for International Students?

Credit scores significantly impact loan options. International students with established U.S. credit history may access better loan terms. Those without a credit history may face higher interest rates or require a cosigner.

Can International Students Use Personal Loans for Tuition?

Yes, international students can use personal loans for tuition, although dedicated student loans might offer better terms for educational expenses.

Are There Alternatives to Personal Loans for International Students?

Alternatives include scholarships, grants, work-study programs, and financial aid from universities. Some countries also offer education loans for studying abroad.

What is the Maximum Loan Amount an International Student Can Receive?

The maximum loan amount varies by lender and the student’s financial situation, including their income or their cosigner’s income and creditworthiness.

How Long Does It Take to Process a Personal Loan for an International Student?

The processing time for personal loans for international students can vary, typically ranging from a few days to several weeks, depending on the lender and the completeness of the application.

What Should International Students Consider Before Applying for a Personal Loan?

International students should consider interest rates, repayment terms, the impact of loan debt on their future finances, and the credibility of the lender before applying for a personal loan.

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