Congratulations — you’ve been accepted to your dream school in the U.S. But now you may be wondering, how am I going to pay for my education? Federal loans are available to some students studying abroad in America, but not all. If you don’t qualify, you may still be able to get a private international student loan to cover the full cost of your education, but you might need a cosigner. To help you understand your options, here’s a comprehensive guide on student loans for international students. We compared the best international student loans by reviewing rates, perks, transparency, loan amounts and fees for every major international student loan provider.
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The 5 best international student loans of 2021
The best international student loans at a glance
| Lender | Loan Amount | APR | Terms | Key Benefits |
|---|---|---|---|---|
| Prodigy Finance | $15,000–80% cost of attendance | Varies | 7 –20 years | No cosigner requirement |
| MPower Financing | $2,001–$50,000 | up to 13.63% fixed | 10 years | No cosigner requirement |
| Citizens Bank | $1,000–$150,000 | as low as 3.99% fixed; as low as 1.18% variable | 5–15 years | Competitive rates |
| Discover | $1,000– up to 100% of school certified costs (aggregate loan limits apply) | 4.24%–12.99%1 APR fixed; 1.24%–11.99%1 APR variable | 15 years | No origination fees |
| Earnest | 100% of costs | as low as 3.49% fixed; as low as 1.05% variable | 5–20 years | Long grace period |
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
Best for masters education – Prodigy Finance
Prodigy Finance may not be a savant with its rates and 4% admin fee, but is still a good stand-in for international students to become learned.
Prodigy Finance is one of the only lenders that allows international grad students to get a loan without a cosigner. The company has no prepayment penalties and allows you to start paying your loan while you’re in school or defer for up to six months after graduation. But it only offers loans with variable interest rates, which means your monthly payments could fluctuate over the loan term. It also charges a 4% administration fee on all loans.
Best not-for-profit – MPower Financing
MPower Financing not only empowers students to go to school, but it empowers graduates with a free career support program afterward.
MPower Financing allows international students to get loans without a cosigner or credit history. The company has an alternative underwriting model that considers your future earnings potential instead of your current credit score.
Its rates are a little high — 14.98 APR for undergrads. But you can qualify for a discount of up to 1.50% by enrolling in autopay, making on-time payments and getting employed after school. MPower will even help you get a job with its free career support program.
Best for borrowers with a cosigner – Citizens One
Citizens Bank offers low rates and fees to international borrowers with cosigners, but your cosigner better be in it for the long haul. Only international students who become citizens can release their cosigners.
Citizens Bank offers student loans with competitive fixed rates as low as 3.99% APR and no application, origination or prepayment fees. It also has loyalty and autopay discounts that can lower your interest rate by up to 0.50%, allowing you to save even more.
But as an international student, you’ll need a U.S. citizen or permanent resident to cosign your loan for you, and you won’t be eligible for multi-year approval. You also won’t be able to get a cosigner release unless you become a citizen or permanent resident yourself.
Best for DACA recipients – Discover Undergraduate Loan
While DACA students don’t have as many options as other students, Discover closes that education gap with its international student loans.
Discover provides fee-free student loans with competitive fixed APRs to international students and DACA recipients. It also offers a 0.25% autopay discount. You’ll be able to finance up to 100% of your school certified costs (aggregate loan limits apply) and defer your payments while you’re in school at least half-time. But you’ll need to have your loan cosigned by a U.S. citizen or permanent resident, which is something to keep in mind. Read our full Discover student loans review.
Best for undergraduate borrowers – Earnest
Earnest offers loans with minimal fees, competitive rates and long grace periods, but requires international borrowers to have a cosigner and doesn’t offer cosigner release.
Earnest offers competitive fixed APRs as low as 3.49% and doesn’t charge origination, prepayment or late fees. The company also has flexible repayment options. You can start making interest-only or fixed, $25 monthly payments while you’re in school to save on interest. You can also defer your loan until you’re done with school. If you choose to defer, you’ll have a nine-month grace period after graduation to find a job before your payments start.
The main downside of going with Earnest is that it requires international borrowers to have a cosigner and doesn’t have a cosigner release option.
What is an international student loan?
International students going to college in the U.S. typically don’t qualify for federal student loans, unless they’re an eligible noncitizen or have a green card. But they can still get international student loans, which are private loans for tuition and other education-related expenses like books and room and board. Usually, you need a cosigner who’s a U.S. citizen or resident to qualify for one, but some lenders may be willing to work with you if you can’t find a cosigner.
How international student loans work
The student loan process can be somewhat difficult and confusing when you’re an international student. Many lenders require you to have a visa and be enrolled in school before you apply for a student loan. To get a visa, you’ll need Form I-20, which comes from your college and proves you’re enrolled in its program. However, many colleges won’t give out this form until you show that you can afford tuition, which you may not be able to do without a loan.
[Read: Do Student Loans Help or Hurt Your Credit Scores?]
Some private lenders offer a way around these requirements by giving borrowers conditional approval letters. Students may be able to satisfy the school’s proof of funds required with the letter and obtain the form they need to secure a visa. But because this process can be challenging, it’s important to start as early as possible.
Eligibility criteria
To qualify for a loan, you’ll need to be enrolled in school at least half-time. Some lenders only work with certain schools, so you’ll need to make sure your college or university is eligible. You may also need a cosigner or a student visa to qualify for a loan with certain lenders.
APRs
Most private lenders determine your international student loan’s APR by looking at your credit score and financial background, although some may take alternative data like your future earning potential into account. So if you don’t have a credit history in the States, you may need a cosigner to get a good interest rate.
[Read: Best Student Loan Refinance Companies]
Private lenders usually offer two different types of APRs — variable and fixed. Variable APRs adjust periodically based on market conditions, while fixed rates stay the same over the life of your loan. Variable-rate loans usually start out cheaper than fixed-rate loans but may end up costing you more in the long run if interest rates rise.
Cosigners
Most lenders require international students to have a cosigner with good credit and a stable income who is a U.S. citizen or permanent resident. However, if you can’t find a cosigner that meets those requirements, you may still be able to get a loan. Some lenders like MPower Financing don’t require borrowers to have a cosigner or credit history to qualify for an international student loan. Instead, it determines your eligibility for a loan by looking at your future earnings potential instead of your current financial situation. However, you may get charged a higher interest rate if you don’t have a cosigner.
How to choose the best international student loan for you
- Find a cosigner or research alternatives. A student loan for international students usually requires a cosigner, so ask your family members and friends who live in the U.S. if they’d be willing to cosign your loan for you. If you can’t find a cosigner, do some research to see which lenders are willing to work with borrowers without cosigners.
- Shop around to find the best rates. Getting quotes from several different lenders will help you compare rates and fees and get the best deal possible.
- Compare loan amounts. Some lenders allow you to finance the total cost of your education while others place limits on how much you can borrow. Figure out how much money you need to fund your education and choose a lender that will allow you to take out a loan that size.
- Compare other loan features. Although rates and fees are important, they aren’t the only factors you should consider when choosing a student loan. Other important features you should compare include repayment plans, loan terms and payment assistance options. If you’re going to use your student loan as proof of funds, you should also make sure your lender will provide you with a conditional approval letter. Additionally, because the international student loan process can be challenging, make sure the lender you choose has a reputation for providing good customer service.
International student loans FAQs
You may be able to use your student loan to show proof of funds to your college and obtain the forms you need to apply for your visa. However, some schools won’t accept loans that haven’t been disbursed yet as proof of funds. You may also be able to show your student loan to your visa officer to satisfy part of the proof of funds requirement.
Most schools will allow you to include scholarships as part of your proof of funds. You may also be able to use it during your interview for your student visa to show that you can afford to study in the U.S.
Lenders usually offer a few different types of repayment plans — immediate, interest-only and deferred.
Immediate repayment plans require you to start making monthly payments shortly after the funds are disbursed to your school. The same goes for interest-only loans, which allow you to make small payments while you’re in school to save money. Payments on deferred loans don’t begin until you graduate, leave school or drop below part-time. Some deferred loans even have grace periods of several months to allow you to find a job before your payments begin.
Too long, didn’t read?
Obtaining a loan as an international student can be a somewhat challenging process, but it is possible. Even if you don’t have a cosigner or a visa, you may be able to get a student loan and use it to show you can afford to study in the U.S.
This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of TheSimpleDollar.com, and may not have been reviewed, approved or otherwise endorsed by the financial institution.
How we make money
The Simple Dollar is an independent, advertising-supported publisher and comparison service. The Simple Dollar is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. The Simple Dollar does not include all companies or all available products.
1Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest and highest interest rates offered on the Discover Undergraduate Loan. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Learn more about Discover Student Loans interest rates at DiscoverStudentLoans.com/Rates.
We welcome your feedback on this article and would love to hear about your experience with the international student loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.
