Key Takeaways
- Federal loans, scholarships, and private lenders like MPower and Sallie Mae cater to international students.
- Private loans often require co-signers, but some lenders, like Prodigy Finance, offer “no co-signer” options.
- International students can also benefit from institutional aid and tuition payment plans to minimize borrowing.
- Comparing loan terms, interest rates, and repayment options is crucial to finding the best international student loan.
What Are International Student Loans?
International student loans are designed to help students from one country fund their education in another. These loans bridge the financial gap for tuition, living expenses, and other costs associated with studying abroad.
International student loans are available through both private lenders and institutional aid programs.
International students in the U.S. have limited access to federal aid, so private loans and scholarships are essential sources of funding.
Typically, these loans have higher interest rates and specific requirements like needing a U.S.-based co-signer or proof of enrollment in an eligible program.
Why Do International Students Need Specialized Loans?
Studying abroad is expensive, and many international students face challenges when funding their education. Here’s why these specialized loans are needed:
- Limited Federal Aid Access: Unlike U.S. citizens and permanent residents, international students are typically ineligible for federal student loans, such as Direct Subsidized Loans or Pell Grants.
- High Tuition Costs: International students often pay higher tuition rates than domestic students, sometimes exceeding $30,000 per year for undergraduate programs.
- Living Expenses: Beyond tuition, costs for housing, food, transportation, and health insurance add to the financial burden.
- Lack of Established Credit History: International students may struggle to qualify for a traditional private student loan without a U.S. credit score.
Federal Aid for International Students
Although international students cannot directly access federal student loans, there are exceptions and alternative forms of federal aid:
- Eligible Non-Citizens: Permanent residents, refugees, and certain visa holders may qualify for federal aid programs, including Federal Pell Grants and Direct Loans.
- Work-Study Programs: While rare, some schools offer international students part-time jobs through institutional work-study programs to help cover living expenses.
- Institutional Aid: Many U.S. colleges provide grants, scholarships, or need-based financial aid for international students. You can contact the financial aid office at your institution to explore available options.
Private Student Loans for International Students
Private lenders are a major source of funding for international students’ education. Here are some top private lenders and their offerings.
MPower Financing
MPower specializes in loans for international students without requiring a co-signer or U.S. credit history.
- Loan Amounts: Up to $100,000 for eligible students.
- Eligibility: Available to students from 190+ countries studying at 400+ U.S. and Canadian institutions.
- Interest Rates: Fixed APR ranges from 12.99% to 15.99% with a 0.25% autopay discount.
- Repayment Terms: Flexible repayment options, with interest-only payments required while in school.
Best For: Students without access to a U.S.-based co-signer.
Prodigy Finance
Prodigy Finance offers loans tailored for graduate students in business, engineering, and other high-demand fields.
- Loan Amounts: Covers up to 80% of the total cost of attendance.
- Eligibility: Available to international students attending partner universities in the U.S.
- Interest Rates: Variable rates tied to the Secured Overnight Financing Rate (SOFR), starting as low as 11.18%.
- Repayment Flexibility: Offers income-driven repayment (IDR) options based on future earnings.
- Additional Perks: Offers student loans without needing a co-signer and provides access to alumni networks.
Best For: Graduate students seeking funding for specialized programs.
Sallie Mae
Sallie Mae provides private loans to international students with a U.S.-based co-signer.
- Loan Amounts: Covers up to 100% of school-certified costs, including tuition, fees, and living expenses.
- Interest Rates: Fixed APRs range from 3.49% to 15.49%; variable APRs range from 4.79% to 14.96%.
- Co-Signer Release: Available after 12 consecutive on-time student loan payments.
- Loan Benefits: Offers a grace period and interest-only payment options while in school.
- Additional Features: Provides free access to FICO Credit Score monitoring.
Best For: Students with strong co-signer support and seeking competitive interest rates.
Earnest
Earnest offers highly customizable private student loans but requires a U.S.-based co-signer for international students.
- Loan Terms: Borrowers can tailor repayment plans to their financial situation.
- Interest Rates: Fixed APRs range from 3.47% to 16.49%; variable APRs range from 4.99% to 16.85%.
- Pre-Qualification: Allows you to check rates with no impact on credit scores.
- Additional Perks: Provides flexible deferment and forbearance options for financial hardships.
- Loan Application Support: Includes tools to simplify the borrowing process.
- Special Offer: Clients of the Student Loan Professor who sign up with Earnest can get an exclusive 0.25% discount.
Best For: International students who value repayment flexibility.
College Ave
College Ave simplifies the borrowing process with quick approval times and flexible repayment options.
- Interest Rates: Fixed APRs range from 3.47% to 17.99%, and variable APRs range from 4.69% to 17.99%.
- Loan Terms: Offers repayment terms ranging from 5 to 15 years.
- Loan Amounts: Covers up to 100% of the cost of attendance.
- Pre-Approval Process: Allows borrowers to check rates without a hard credit pull.
- Additional Tools: Loan calculators to help estimate monthly payments.
Best For: Students looking for a straightforward application process and repayment flexibility.
SoFi
SoFi provides student loans for international students with residency cards and strong co-signer support.
- Interest Rates: Fixed APRs range from 3.54% to 15.99%; variable APRs start at 4.64%.
- Loan Perks: SoFi offers unique perks such as career coaching, financial planning, and networking events.
- Co-Signer Support: Strong co-signer relationships improve approval chances for undergraduate and graduate students abroad.
- Repayment Terms: Flexible options, including deferred payments and interest-only plans while in school.
- Additional Benefits: SoFi offers unemployment protection and member discounts.
- Special Offer: Clients of the Student Loan Professor who sign up with SoFi can get an exclusive 0.25% discount.
Best For: Students seeking additional career and financial resources alongside their loans.
How to Qualify for an International Student Loan
Qualifying for an international student loan depends on several factors, including:
- Enrollment in an Eligible Program: Most lenders require enrollment in a degree-granting institution.
- Co-Signer Requirements: Many private lenders require a U.S.-based co-signer with good credit for approval. A co-signer can also help secure better fixed or variable-rate loans.
- Proof of Financial Need: Before you’re accepted into an international student loan program, most lenders will require evidence of insufficient funds to cover educational costs.
- Valid Visa Status: If you’re not a permanent resident, lenders will likely ask for specific visa requirements, such as an F-1 or J-1 student visa.
- Academic Performance: Some lenders evaluate academic achievement and potential rather than credit history or previous student loan debt.
Comparing Loan Terms and Interest Rates
There are five main things you should compare when choosing an international student loan:
- Interest Rate: Fixed rates provide stability, while variable rates may offer initial savings but fluctuate over time, depending on the market.
- Repayment Terms: Look for flexible options such as deferred payments, income-driven plans, or grace periods.
- Loan Amounts: Ensure the loan covers tuition and additional costs, such as housing and living expenses.
- Fees: Watch for origination fees, late payment penalties, and other hidden charges.
- Co-Signer Release: Some lenders allow co-signers to be removed after a set number of on-time payments.
Alternatives to International Student Loans
If a student loan isn’t suitable, there are other ways to fund your international education, including:
- Scholarships and Grants: Platforms like Fastweb and ScholarshipOwl help students find opportunities. Many universities also offer merit-based or need-based scholarships specifically for international students.
- Work-Study Programs: While limited, some institutions offer on-campus employment opportunities for international students.
- Institutional Aid: Contact your university’s financial aid office to explore grants, fee waivers, or repayment plans.
Key Tips for Managing International Student Loans
- Borrow Only What You Need: Calculate your total cost of attendance and subtract any scholarships or grants to determine the minimum loan amount required.
- Understand Repayment Terms: Familiarize yourself with grace periods, repayment schedules, and interest accrual.
- Set Up Autopay: Many lenders, such as MPower and Earnest, offer interest rate discounts for automatic payments.
- Build Credit: Use your loan responsibility and make your payments on time to establish a U.S. credit history. This can help with future financial needs.
- Seek Financial Guidance: If unsure, it’s best to avoid unnecessary risks. Consult with a financial aid advisor, such as the Student Loan Professor, to explore tailored options for your financial situation.
Secure the Right International Student Loan Today
Being an international student without a U.S. credit history or permanent residence can make student loans tricky. However, there are multiple options you can try if you know where to look.
Contact Student Loan Professor today, and we’ll connect you with the best lenders offering competitive rates for international students.
Brandon Barfield is the President and Co-Founder of Student Loan Professor, and is nationally known as student loan expert for graduate health professions. Since 2011, Brandon has given hundreds of loan repayment presentations for schools, hospitals, and medical conferences across the country. With his diverse background in financial aid, financial planning and student loan advisory, Brandon has a broad understanding of the intricacies surrounding student loans, loan repayment strategies, and how they should be considered when graduates make other financial decisions.
