How Can International Students Get Loans?

When someone goes off to college, they hope that they can either get a scholarship or use the college funds that their parents gathered for them. However, in most cases, that is not even an option – particularly if you come from a poor family. In such a case, your only option for getting an education might be to get a loan.

But what if you are an international student? Banks generally only give to local students that have at least some sort of credit formed – or at least someone to vouch for them. But can you do anything about it if you’re not local – or from anywhere remotely close? How can international students get loans? We’ll find out by reading this article.

Can International Students Get Loans?

As far as international students are involved, there is nothing to stop them from getting a loan – provided they meet a few requirements. Granted, no big bank will give you a loan without credit history or a cosigner – but smaller lenders just might.

In other words, if you go to a traditional bank and demand a loan, the chances are that you will not be all that successful. If you go for a private or online lender, you might be a bit luckier – as they tend to be more flexible.

However, the downside of this is that they have fairly high interest rates. The better your credit score, the higher your chances will be of getting a loan. The same thing applies if you have a co-signer. Lenders will no longer be reluctant in giving you a loan if they see that you are already relatively trustworthy.

What Costs Do International Students Need to Cover?

Your student years are in a way, the prime years of your life. The fun, the quest for knowledge – and everything else that revolves around student life, all is there for you to enjoy. However, this also involves the costs that you will have to deal with.

Tuition

Professors won’t pay themselves – and if you want to learn, then you will have to pay your tuition. This is likely the highest college expense that you have to deal with – and depending on the college that you go to, these fees can be really high. Tuition at an Ivy League University, for instance, can be rather expensive.

Room and Board

As a student, you will also have to pay for boarding. Where are you going to live? Do you want to live in a college dorm or do you want to rent your own apartment? Depending on your preferences, the room in which you are staying can also cost you a lot of money. Plus, if you go for apartments, it’s a general rule that the closer you are to the university, the more expensive it will be.

Books, Computers, and Other Supplies

While we all want to go through college by memorizing everything our professor says, that is not effective. As a student, you will have to do some research yourself – and for that, you may need quite a lot of books. These books may not even be in the library, which means that you may have to buy them yourself.

Transportation

How are you planning to get to school? Sure, you may work your way around to stay at the dorm nearby – but the chances are that classes may be held in different buildings. In this case, you might have to pay for your own transportation. And considering you’ll be doing it every month, then you might find yourself with a fairly large hole in your budget.

Think about whether you want to go by bus, or whether you want to drive yourself around instead of waiting for a bus. In that case, you can get a leased car as an international student, which will allow you to go from one place to another.

Food

At some point, you’ll have to eat as well. As an international student, you will not have the advantage of your parents sending you food packages every week. You will have to buy your groceries yourself, cook for yourself – and occasionally, buy food that has already been cooked (e.g. restaurants, fast food, etc.)

Roadblocks for F1 Students Looking for Loans

We won’t lie to you: getting a loan while you are on an F1 visa won’t be very easy. Some lenders might be quite strict when it comes to providing a loan – and in the event that you cannot get one, it might be because of the following:

Ineligibility for U.S. Federal Loans

As an international student, you will have to get a federal loan to receive a loan – or at least, that should be your first option. If you cannot get such a loan, then it might be because you did not meet the eligibility criteria – in which case, the government will automatically reject your request for a loan.

Lack of U.S. Credit History

Lenders give a loan based on creditworthiness. If they see that you borrowed in the past and paid the money back, then this credit history will tell them that you can pay the money back this time as well.

However, an international student will not have this creditworthiness because he/she would have just come into the country. Since lenders won’t know whether they are “payers” or not, it is likely that their application for a loan will be rejected.

International Student Loan Options

As an international student, there are several ways for you to get your hands on a loan. Here are the most popular options:

Private Loans from Online Lenders (Best for No Credit History)

If you have no credit history whatsoever, then you might want to go for a personal loan for students from an online lender. These companies indeed charge higher interest rates, as security for the loan – but on the other hand, they will not do any credit checks on you. For all it is worth, your credit score might be nonexistent, and you might still get your loan.

Private Student Loans with a Cosigner (Best for those with Cosigners)

If you have a co-signer (a person with U.S. citizenship and a good credit score), then you might want to get a private student loan. This way, the credit score of your co-signer will be taken into account – and the chances are very high that you will receive a loan with a much lower interest rate.

Big Banks in the U.S. (Best for Those with Credit Histories)

You may be able to get a loan from a bigger bank in the United States – but only if you have some credit history to show off. If you borrowed before and managed to raise your credit score, then the chances are high that the banks will also accept you. You just have to prove that you are timely with your payments.

How to Get a Personal Loans as an F1 Student

The process of getting a personal loan as a student on an F1 visa is not at all complicated – at least not once you find the right lender. No matter if you are going for a personal loan or for a bank loan, here is the general process for it.

Apply

To get a personal loan, you will first have to apply with your main information. Within 24 hours, you will generally receive an update – and the lender will tell you whether you have to bring in extra documents or not. Each company will require different data, so make sure that you read their policy first.

Accept

Once the information has been verified, you will typically be given a promissory note with a sum that has been appointed to you. Once you agree to the principal sum and the interest rate, you will have to sign the note. When you do that, the transfer will generally take 2-3 days to happen.

Repay

The money is now in your account, and you spent it on tuition and whatever else you may have to pay for. Now, all that is left for you to do is to pay back in lump sums that were originally agreed upon. In most cases, you will have to pay for a sum once a month – but you may schedule with your lender in whatever way seems fit.

Depending on your preferences, you might also use the autopay function – which is provided by most lenders nowadays. This way, you won’t risk forgetting to pay your loan because you were too busy studying.

Wrap Up

Even if you are an international student, it should not be too difficult for you to get a loan. You just have to find the right lender – one that has terms that you can agree with. Whether you go for an online loan or a traditional bank loan, make sure that you do your research on various lenders and then pick the one that is just right for you.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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