Financing an education in the United States is difficult, even for a US student.
For international students, paying for college in the US is even harder.
Almost two-thirds of all students enrolled at private four-year US schools receive
loans of some type. US students can receive loans guaranteed by the government
(Stafford loans, among others), but these valuable loans are not available to
international students. Luckily, private student loans are available to international
students on the same terms received by US students.
Before applying for a loan, you should exhaust the following potential funding sources:
3. 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 US education simply using the sources above.
However, like US students, most international students will need to fund at least a portion
of their US education, if not the entire amount, with loans.
International student loans usually require a US citizen or permanent resident (Green card holder) as a
cosigner. If a cosigner is required the loan is credit-based, meaning the cosigner must have good credit
history, good employment history (or other income history if the cosigner does not work), and must have lived
in the US for the past two years. If you're not able to find a family member, friend or other US citizen or
permanent resident to cosign for you then you may want to consider a
no cosigner loan
, which is available at certain colleges and universities.
Funds Paid Directly to Your School. Private international student loans disperse funds directly
to the school so that they can “certify” the loan. This means that the school’s financial aid off signs of on the
amount distributed, ensuring that the student is given up to the total cost of their education minus any other
financial aid received. Once this has been certified, the school will then disperse the funds directly to student.
Pay your tuition, room and board, health insurance and books first - anything extra is a luxury!
Repayment. Repayment of an international student loan will vary depending on the loan you select.
The repayment period typically ranges from 10-25 years; the standard rule of thumb is the larger the loan, the
longer the repayment period. Some loans allow you to defer payments until 6 months after graduation, others
allow students to only pay interest while in school (and defer the principal), and other loans begin repayment
of both the interest and principal immediately once the loan has been paid out. It is important to consider
the options and your ability to pay back student loans when reviewing the lender terms and conditions. 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 may be able to
use the loan approval in order to satisfy the school and visa requirement of showing one year's financial
resources. While it’s not easy and it’s up to the school and consular officer if they'll accept a loan approval
as proper funds, this may be a helpful way to show proof of funds if you need additional financial assistance.
You can apply for the loan without the proof of enrollment from your school, and receive conditional approval.
Then you can provide your school with the pre-approval from the lender, and the school will see that you will
have the necessary funds. Typically, a financial aid officer or international student advisor at a US school
is quite familiar with this process and will help you.
Interest Rates. Interest rates are variable, based on the LIBOR or Prime - depending on your
loan - plus a margin. Depending on the loan, the lender will clarify which index the loan uses and there will
be an additional margin based on the borrower’s criteria, including the credit history of your co-signer and
the repayment plan you select. The better your co-signer, the better your rate! LIBOR and Prime Rates are
constantly fluctuating, up or down, so the interest rate will changed based on this index.
Online Application. You can apply right online, and receive initial approval in just a few
short works. 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 rolled into the loan amount
and does not have to be paid out of pocket.