How International Students Can Get Loans

How to Get Loans for International Students

Students and parents worry about how international students can get loans in America. US education is expensive even for a native student. For international students, there are added burdens of additional fees, travel expenses, currency exchange, and living expenses. The resident students have many opportunities to finance their education. They even get government aided loans at subsidized terms.

How International Students Can Get Loans Sponsored by the Government

Non-resident students are not presented with many options. Especially, the government loans are not made available to them. However, international students can avail private loans offered by many financial institutions. They may not come with lucrative terms, but they help those students fund their education. Students, who have been in the US for a period of three or more years can convert their status from non-resident aliens to resident aliens, and become eligible for some of the federal loans.

Before they set out to find how international students can get loans, students need to explore their other options. Availing financial aid from the university or college and qualifying for merit scholarships using family’s funds are better options than getting a loan. If these options do not work or they do not cover the entire educational expense, then they can explore financing through loans.

Facts Concerning How International Students Can Get Loans

International student loans come with certain requirements and features.

  • A co-signor, who is a permanent resident or citizen of the US, is required for loan processing. Loan underwriting rules will take in to account the credit rating of that individual in processing the student’s loan application.
  • The loan amount will not be directed to the school, but to the student. Even though it is a great feature that allows the student to use the funds as per his or her needs, it comes with responsibility of handling the fund properly.
  • The repayment period usually starts six months post graduation and is set to a maximum of 20 years. The payments need to be made regularly every month. Break in payments will be treated according to the default terms of the loan.
  • Some financiers let the students apply for loan even before enrolling for a school in the US. This allows the international students to use the loan approval as the financial proof to obtain student visa or course admission.
  • Interest rates for international student loans are set as a margin above the LIBOR. Depending on the credit eligibility of the co-signor, the margin can vary between 3.5 and 7.75 percent.
  • Zero application fees accompany the loans, but they do require the origination fee, which in most cases will be deducted added to the loan amount.

There are several facts, myths and theories on how international students can get loans. It is important to get the right information and knock the right doors to be successful. Even though, it is limited and difficult, it is not impossible for international students to fund their education in the US through loans.

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