Refinancing International Student Loans: The Ultimate Guide

Updated on June 9, 2024

Paying off student loans can be tough, especially if they’re international student loans. You constantly need to juggle between part-time jobs and studies.

This is when refinancing an international student loan (or even student loan consolidation) can come as a relief. Below is a guide to refinancing international student loans.

What is Student Loan Refinancing?

Student loan refinancing is simply paying off your current student loan with a new one that has better offerings: lower monthly fixed payments/lower fixed interest rates. Doing this saves you money month-to-month. Although there are other ways to budget while paying off your student loans, student loan refinancing is one of the most effective ways to lower monthly expenditure. (Nevertheless, we recommend a combination of both!)

Chances are high that when you took a student loan before starting school, the bank loaned you money at a higher interest rate based on your future potential and due to the risks involved. In these cases, banks are only going to get their money back once you graduate and find a job, so the risks they take are naturally high.

Thus, things change when you re-apply for a loan once you have graduated and secured a job. In this case, the risk of defaulting on the loan is much lower as compared to the original situation. As we mentioned before, this benefits you in the form of lower interest rates and lower monthly installments, and therefore money saved.

However, not everyone is eligible for student refinanced loans. Let’s have a closer look at what it takes to get your student loan refinanced.

Is it Possible to Refinance Student Loans for International Students?

The good news is, yes! International students can refinance F1 student loans.

Can You Refinance if You’re Not a Resident?

Being a non-resident does not mean you aren’t eligible for education loan refinancing. You might encounter a few additional obstacles when applying but it’s definitely not impossible. There are even lenders who specifically cater to immigrants and visa holders.

Eligibility Criteria for Student Loan Refinancing

In order to get your student loan refinanced, you should meet certain requirements, including:

Good Credit Score

Having a good credit score is necessary to get your loan refinanced. You can do so by engaging yourself in a part-time job on campus to pay bills on a timely basis, for example. There are many additional strategies you can engage in to build your credit score quickly.

However, not all international students get an opportunity or have the time to work part-time. There even are students who don’t obtain their SSN until they graduate. In these cases, it becomes harder for them to get a loan — because even though it is possible to get a credit score without an SSN, it’s still very difficult.

Employment or Prospective Job Offers

As we discussed above, banks and financial companies generally provide better interest rates when refinancing because they know your future prospects of finding stable employment are higher with a degree/work experience.

Thus, make sure that you have stable employment secured, or at least have a job offer available. In regards to the job offer, showing that you have accepted the job offer and have a set date for joining would be ideal and would further your chances of approval.

Visa Approval

Having an approved visa is important because it lets the lender know that if worse comes to worst, the borrower won’t be running away with the money. Therefore, it is essential that you have a visa approval.

Please note: If you are a non-STEM major with an OPT of 12 months, you need to assure your lender that you will be getting your H1-B visa soon.

Avoid Late Fees and Defaulting

Avoiding late fees (and fees in general) is crucial; it lets the lender know that you have enough cash flow in your finances to handle a loan and not default somewhere along the line. If you’re a credit card user, make sure that you make your credit card payments well before the due dates (automatic payments are the way to go).

Additionally, avoiding overdraft and insufficient funds fees is another important step in letting the lender know that you are financially responsible. Lastly, knowing how much money is in your account every day is necessary so that you can avoid any untimely (and embarrassing) overdraft fees.

All of these things count against your financial stability, so you need to be wary of the fees associated with personal loans (especially those or international students).

Once you qualify for all of these criteria, it is the time to approach banks and financial institutions to ask them to refinance your student loan.

But wait – not all banks and financial institutions refinance student loans, especially when you are an F-1/OPT/H1-B visa holder. Let’s find out why.

Why is it Tough For International Students To Get Student Refinancing Loans?

As an international student, it is certainly difficult to find an institution that will refinance your loan. We’ve listed a few of the reasons why down below.

Most Student Loans are Granted by the U.S Government

A large number of financial institutions do not possess the power and permission to finance student loans. This is because the US government started granting all student loans themselves a few years ago.

They Do Not Charge Off Student Loans

A student loan certified by an accredited university cannot be discharged in bankruptcy (it is near impossible for this to happen). In other words, you have to pay back these loans over your life.

However, if the student leaves the country, there is no recourse for the financial institution that granted the loan. This is probably why most financial institutions hesitate to give loans to H-1B and F-1/OPT visa holders.

Most International Students Have Short Visas and Large Loans

Generally speaking, student loans are large in amount — an average student loan is for $30,000.

Needless to say, it is going to take several years to pay these loans back. And, if a student doesn’t have a visa valid enough for such a long period, the lender might be at risk. This is yet another reason why lenders generally refrain from refinancing student loans.

After passing all of these hurdles, you’ll eventually find a lender that refinances your student loans. But, there is a catch: you might find that US citizens are given better interest rates on refinanced student loans than most international students.

Why Are International Students Given Higher Interest Rates on Student Refinancing Loans?

The answer is simple – international students, especially ones with F-1, OPT, and H-1B visas, are considered risky for several reasons, many of which have been mentioned in this article:

  • International students have a short-term visa
  • International students may be forced to leave the US due to being unemployed, which can happen for reasons out of their control (e.g. recession)
  • International students can leave the US any moment, leaving the lender with no recourse

Don’t let all of this discourage you!

International students are still able to refinance their student loans. The only trick is to meet the eligibility criteria and assure lenders that you won’t default on your loan.

So, is now the right time to refinance your student loan?

How to Apply for refinancing as a Noncitizen

With most lenders, you will encounter the following general application process when you apply for education loan refinance.

Application

Shop around and apply for student loan refinancing deals at different lenders. Before you apply to different lenders, make a short list of those you like and whose eligibility criteria you meet.

As a non-resident, lenders will look at a combination of the following eligibility factors:

  • Qualifying minimum credit score
  • Whether you’re signing with a cosigner
  • Valid visa
  • Any work permits
  • Proof of employment or written job offers
  • U.S. bank account
  • U.S. personal phone number
  • Proof of residence in the U.S

Once you’ve shortened it to two or three, do a pre-approval so you can see what terms they’ll offer you. Make sure you compare them properly and choose the best offer for you. Once you’re set, do a formal application. Most lenders allow you to apply online which makes the process quick and easy!

Documentation

Supply all the documentation required by the lender for a successful application. Make sure you have proof of valid visas, work permits, and any other relevant documents. It is always a good idea to get all the possible documents ready before you start applying. This makes the application process much smoother.

Some lenders may contact you for follow up calls if they need any additional information. They often want to clear the last few details before they can provide you with a loan offer and terms.

Decision

After applying, the lender will provide you with a final offer. Read the terms very carefully and make sure the terms are better than those of your current loans. If you are happy, you can accept the offer. Usually, they provide a promissory note to sign which seals the deal.

Disbursal

Once the lender receives the signed documentation, the funds will be disbursed. Depending on your agreement with the lender, the funds will either be paid directly to your existing debts or the funds will be disbursed to your account and you need to repay them. The timing of the disbursement will depend on the lender. It can take anything from 2-3 days to a month.

How to Find the Right Refinancing Lender for Your Situation

Since you are an international, your options will be more limited. The good news is, you still have a choice and you should only go for lenders who can meet your specific needs. It’s always a good idea to start with writing down your needs. Set up your budget to know what monthly payment will be possible for you or what your desired outcome from refinancing is.

Once you’ve got that, you can search for lenders who can offer you what you want and need and whose eligibility criteria you meet. As we mentioned above, it is really important to set time aside and do proper homework. Compare the different offers from different lenders so you can make sure you choose the right one for you.

Best Alternate Lenders for Loans

Avant (Best for Quick Approval)

Avant Personal Personal Loan

4.0
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

550

Fixed APR

9.95-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 550.
  • Fixed APR: 9.95-35.99%.
  • Loan amounts: $2,000-$35,000.
  • Repayment: 1 to 5 years..

Qualifications

  • Strong credit and income may secure lower rates, but not mandatory.
  • Must possess a bank account in good standing under your name.
  • A valid Social Security number is required.
  • Bankruptcy should not be active.
  • Minimum credit score of 550; using FICO score version 8 and VantageScore version 3.
  • Minimum monthly net income: $1,200 from various sources including employment, alimony, retirement, child support, and Social Security payments.

Pros

  • A dedicated mobile app is available for loan management.
  • Offers a diverse selection of repayment terms.
  • Customer service is accessible seven days a week.

Cons

  • An origination fee might be applicable.
  • They don’t offer co-signed, joint, or secured loan options.
  • Direct payments to creditors aren’t available for debt consolidation loans.

AmOne (Best of Low Credit Score)

AmOne Personal Loan

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

3.99%-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 600.
  • Fixed APR: 3.99%-35.99%.
  • Loan amounts: $1,000 to $50,000.
  • Repayment: 1 to 7 years.

Qualifications

  • Must be at least 18 years old.
  • Must be a U.S. citizen or permanent resident.
  • While there’s no specific income requirement, a consistent source of income is essential for the applicant.

Pros

  • Suitable for individuals with lower credit scores.
  • No cost for the matching service.
  • Attractive loan rates.

Cons

  • Acts as an intermediary, not a direct lender.
  • Risk of multiple contacts from prospective lenders.
  • Lack of clarity on lender details.

Upstart (Best for Fair Credit Score)

Upstart Personal Loan

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

4.60-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 4.60-35.99%.
  • Loan amounts: $1,000-$50,000.
  • Repayment: 3 or 5 years.

Qualifications

  • Hold U.S. citizenship or possess permanent residency.
  • Be a minimum of 18 years old in the majority of states.
  • Provide a valid email address and Social Security number.
  • Be currently employed full-time or starting a full-time job within the next six months.
  • Maintain an active bank account with a recognizable routing number.
  • Not have declared bankruptcy in the past year.
  • Ensure no delinquencies are present on their current credit reports.
  • Record fewer than six hard credit inquiries in the past six months, excluding inquiries for student, auto, or mortgage loans.

Pros

  • Welcomes first-time credit users.
  • Provides quick fund disbursement.
  • Allows flexibility in adjusting payment due dates.
  • Offers pre-qualification through a soft credit inquiry.
  • Customer support available seven days a week.

Cons

  • Origination fee may apply.
  • Does not offer joint, co-signed, or secured loan options.
  • Lacks a mobile application for loan management.
  • Limited to two loan repayment terms.

OneMain Financial (Best for Good Rates)

OneMain Financial Personal Loan

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

18.00-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 18.00-35.99%.
  • Loan amounts: $1,500-$20,000.
  • Repayment: 2 to 5 years.

Qualifications

  • Must possess a Social Security number or individual taxpayer identification number.
  • Minimum age: 18 in most states.
  • No set minimum credit score, but some credit history is preferable.
  • No specific minimum income, but must cover personal expenses and the loan’s monthly payment.

Pros

  • Flexibility to select and modify your payment date.
  • Offers both joint and secured loan options.
  • Provides quick loan disbursement.
  • Enables direct payments to creditors for debt consolidation.
  • Comes with a seven-day policy for loan cancellation.

Cons

  • Interest rates are relatively high compared to competitors.
  • An origination fee is applicable.
  • Doesn’t offer any rate discounts.
  • Offers a restricted range of loan amounts.
  • APR is not displayed during pre-qualification.

SoFi (Best for Good Credit Score)

SoFi Personal Loan

5.0
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

8.99-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 660.
  • Fixed APR: 8.99-29.99%.
  • Loan amounts: $5,000-$100,000.
  • Repayment: 2 to 7 years.

Qualifications

  • Targets borrowers with good to excellent credit; fair credit may qualify.
  • Minimum credit score of 660.
  • At least two years of credit history.
  • Proof of sufficient income sources or employment offer starting in less than 90 days.
  • Must be a U.S. citizen, a permanent resident, or a visa holder (J-1, H-1B, E-2, O-1, or TN).

Pros

  • Soft credit check is available for pre-qualification.
  • Offers high loan amounts.
  • 0.25% rate reduction for auto pay.
  • No origination fee.
  • No prepayment penalty.

Cons

  • Minimum 660 credit score required.
  • Minimum $5,000 loan amount.

Frequently Asked Questions:

What is refinancing a student loan?

Refinancing a student loan means taking out a new loan to pay off your existing student loans, ideally at a lower interest rate or better terms. This consolidates your debt into one new loan.

Can I refinance my international student loans?

Yes, it is often possible to refinance international student loans with a private lender in the US. Your eligibility will depend on your credit score and income. Lenders also consider your visa and employment status.

What types of international student loans are eligible for refinancing?

Federal and private international student loans are often eligible for refinancing. This includes loans from banks and financial companies in your home country used to pay for studies abroad.

What are the benefits of refinancing international student loans?

The key benefits are securing a lower interest rate, which saves money on interest payments over the life of the loan. You may also be able to release cosigners from previous obligations.

Can I get a better interest rate when I refinance student loans?

Yes, it is possible to get lower interest rates when you refinance, especially if your credit score has improved or interest rates have dropped since you first borrowed. Always compare rates carefully first.

Are there any fees or penalties for refinancing student loans?

Refinancing often comes with an origination fee, which is taken out of the new loan amount. Read the fine print carefully, as prepayment penalties sometimes apply if you try to pay off the refinanced loan early.

Refinancing itself does not affect your legal status. But lenders may have visa requirements to qualify. Always check your specific visa allows employment/income to repay debts.

Should I wait to refinance until after graduation?

It can make sense to wait, as lenders prefer borrowers with employment and income. However, interest rates may rise in the meantime. Weigh your options given your specific situation.

Where can I find the best rates for refinancing student loans?

Online lenders like Earnest, SoFi, Lendkey, and CommonBond often offer competitive rates. Compare options across multiple lenders to find the best rates.

What credit score do I need to refinance student loans?

You will typically need a FICO credit score in the high 600s and ideally over 700 to qualify for a private student loan refinance. Income level and debt-to-income ratio also play a big role.

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Rohit Mittal

Rohit Mittal is the co-founder and CEO of Stilt. Rohit has extensive experience in credit risk analytics and data science. He spent years building credit risk and fraud models for top U.S. banks. In his current role, he defines the overall business strategy, leads debt and capital fundraising efforts, leads product development, and leads other customer-related aspects for the company. Stilt is backed by Y Combinator and has raised a total of $275M in debt and equity funding to date.

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