| Private Loans for International Students: A Viable Option|
Financing an education in the United States is difficult, even for a U.S. student. For non-U.S. students, paying for college or university in the U.S. is even harder. Almost two-thirds of all students enrolled at private four-year U.S. colleges and universities receive loans of some type. U.S. students can receive loans guaranteed by the government (Stafford loans, among others), but these valuable loans are not available to non-U.S. students. Luckily, private student loans are available to international students on the same terms as U.S. students.
Before applying for a loan, you should exhaust the following potential funding sources:
- Apply for international student financial aid from your host school in the U.S.: There is a searchable list of U.S. schools awarding financial aid to international students: InternationalStudent.com/schools_awarding_aid
- Research and apply for international student scholarships on your own: InternationalScholarships.com.
- Carefully evaluate how much money you or your family can provide towards your education. Every dollar you can pay directly is one less dollar you have to borrow.
Some international students can fund their U.S. education by simply using those sources. However, like many U.S. students, most international students will need to fund at least a portion of their U.S. education with loans.
It's important to become familiar with the most common provisions of international student loans, and the language used to describe them. For example:
- U.S. Co-Signer Required: International student loans require a U.S. citizen or permanent resident (Green card holder) as a co-signer. The loans are credit-based, meaning the co-signer must have good credit history, good employment history (or other income history if the co-signer does not work), and must have lived in the United States for the past two years. Not every prospective student can find a family member, friend or other U.S. citizen or permanent resident to co-sign for them. But for those that do, they can access private student loans on the same basis as U.S. students.
- Funds Paid Directly to You: Loan funds are paid to you, not to the school. This is a great feature in that you can use the funds for living expenses -- but it also means that you must use the funds responsibly. Pay your tuition, room and board, health insurance and books first -- anything extra is a luxury!
- Repayment: Repayment of an international student loan can be deferred while you are enrolled full-time, and for six months after you finish. After that, you will have up to 20 years to repay the loan, with a payment due every month. You are also eligible for hardship extensions if you run into unexpected circumstances that prevent you from being able to repay the loan for a short period of time.
- Proof of Finances: One nice feature of international student loans is that you can use the loan approval in order to satisfy the school and visa requirement of showing one year's financial resources. You can apply for the loan without the proof of enrollment from your school, and receive conditional approval. Then you can provide your U.S. campus with the pre-approval from the lender, and the U.S. campus will see you will have the necessary funds. Typically, a financial aid officer or international student advisor at a U.S. campus is quite familiar with this process, and will assist you accordingly. After admission and enrollment, you can complete the loan process and receive your funds.
- Interest Rates: Interest rates are variable, based on the LIBOR (London Inter Bank Offered Rate (explanation by InternationalStudentLoan.com) plus a margin. LIBOR is always several points below prime, so the margin is from 3.5 percent to 7.75 percent, and will be set by the lender based on the credit history of your co-signer and the repayment plan you select. The better your co-signer, the better your rate! LIBOR changes monthly, up or down, so the rate will be reset monthly. For an example of interest rates and repayment terms: InternationalStudentLoan.com.
- Online Application: You can apply online or by phone, and receive an almost immediate response as to whether you are conditionally approved for the loan. Then, you will need to sign the promissory note, and provide proof of enrollment and immigration status to receive your funds.
- No Application Fees: There are no application fees to apply for an international student loan. There is an origination fee if you actually receive the loan, but that amount is included in the total loan amount, and does not have to be paid in advance.
For more information about international student loans, visit InternationalStudentLoan.com.