Best International Student Loans | Find the Best Loan for You | US News

Studying in the U.S. as an international student is a big expense. Even though students need to prove that they have ample finances before they begin school, there are times when they may need some extra funds. Some private lenders offer student loans for international students to help them complete their education. Learn what you should keep in mind if you’re an international student considering student loans.

Unlike U.S. citizens or eligible noncitizen students, international students do not have access to federal student loans, and scholarship opportunities are scarce. If you’re an international student who needs to borrow money to fund your studies and living expenses, you will have to turn to private lenders that specialize in student loans for international students.

You must use international student loans for education-related expenses including the cost of attendance, room and board, books and insurance.

Unfortunately, there aren’t a vast array of options for these loans. Because international students must complete the College Board’s Certification of Finances form, they attest that they have the funding available to pay the tuition, fees and other living expenses associated with their program. “That process in and of itself makes it so that the demand for loans for international students isn’t as high as for domestic students,” says Kenneth Ferreira, associate vice president for student financial services at Franklin Pierce University.

That said, circumstances sometimes change, which may cause international students to be short on cash. Student loans for international students can help people in those situations complete their studies.

The first requirement to get an international student loan is to be an international student. That means that not only are you not a U.S. citizen, but you’re also not an eligible noncitizen, which includes permanent residents, U.S. nationals and those who have T-1 status or a Form I-94.

Next, you have to enroll at least part time in an educational program at an eligible college or university. “Typically, the university or college will have a role in certifying the loan for the lender,” says Ferreira. The institution confirms the cost of attendance and the enrollment period, for example.

Beyond that, lenders mostly base private student loan approval on creditworthiness. The challenge then becomes that international students do not have a credit history in the U.S. or parents in this country who can borrow on their behalf. So, most lenders require a co-signer for the loan who is a U.S. citizen or eligible noncitizen. “The co-signer would need to have acceptable credit scores and credit history,” says Kevin Towns, director of financial aid at North Central College. That way, if the student does not repay the loan, the co-signer pays the debt.

The co-signer doesn’t have to be a family member, but because that person will be on the hook for the debt, it should be someone with close ties to the student, says Towns. He or she must also have lived in the U.S. for at least two years and have strong credit.

Other factors that could affect approval decisions or interest rate offers may be subjective. For instance, some lenders might consider the school, the type of degree and sometimes the program of study or the student’s home country. From the lender’s perspective, the student’s earning potential can help predict the student’s ability to handle the repayment, says Towns.

This is especially true of the small number of lenders that allow student loans for international students without co-signers.

International students do not have the same number of lenders from which to choose as U.S.-based students do, but it still pays to check the few available options. Because students may not be familiar with lender terminology and the loan process, Ferreira recommends that they work with their college’s financial aid office to help decipher the terms and conditions. “They vary from lender to lender, but typically terms and conditions involve any interest and fees associated with the loan,” he says.

Some items to compare between different international student loan providers include:

Refinancing international student loans is possible, but tricky. You usually need to have an established credit history and a reliable income – both of which may be a challenge for international students to prove.

If a couple of years go by and you can establish credit as a U.S. citizen or permanent resident, then it is more likely that you will be able to refinance your existing student loans on your own. Otherwise, just like with most student loans for international students, lenders will require you to have a U.S.-based co-signer to refinance your loan.

Refinancing student loans can be a good option for some borrowers as it consolidates multiple loans into one loan payment. Another reason to explore refinancing is to see if you qualify for a better interest rate or to lower your monthly payment. Like all financial issues, it’s important to crunch the numbers to see if a new loan would be beneficial.