International Student Loans Without a Cosigner
Many international students choose to study at colleges and universities in the United States. It can be very expensive to get a college degree abroad, so many students look to scholarships, grants and loans to help fund their education.
Unfortunately, United States banks do not offer private student loans to international students without a cosigner. Many international student loan programs require a cosigner who is a U.S. citizen or permanent U.S. resident. A few loans do not require a U.S. cosigner, but do require a cosigner from your home country. This International Student Loan blog explains the process.
If you are not an international student but need a student loan without a cosigner - here are your options
Loans for international students are usually going to require a cosigner, either in the United States or from home or both. The interest rates for international students are going to be higher than rates for students who are U.S. citizens. Remember that whatever you borrow, you eventually have to pay back – with interest.
International Student Loans
- Canadian Student Loan Program is available to Canadian students who plan to attend college in the United States. You must have a cosigner who is a U.S. citizen or permanent resident to apply. This program compares lenders and offers. The available loans offer flexible repayment options and competitive interest rates. Additionally, there is no application fee to use the program. Students may borrow the full cost of their education.
- Global Student Loan Corporation (GSLC) partners with financial institutions around the world to provide educational loans to international students. GSLC does not require a cosigner from the U.S., but you must have a cosigner from your country. In addition to providing tuition, GSLC also covers expenses such as computers, insurance, travel, communication and housing.
- Credilia Financial Services is a non-bank finance company that offers private student loans to international students from India. Credilia does not require a cosigner from the U.S., but the student must have a cosigner from India, usually a parent or relative. In addition, the loan is secured by collateral, such as a home or other property. Interest rates begin at 13.5 percent and a choice of repayment options.
Federal student loans may be available to international students who qualify as an eligible non-citizen. According to the Free Application for Federal Student Aid (FAFSA) website, the most common type of eligible non-citizen holds a “green card”. Visit their website for more information concerning eligibility.
Applying for federal aid is simple using the free online application at fafsa.ed.gov. Before starting the complete application process, use the FAFSA4caster to view an estimate of your eligibility for federal loans.
The prospect of studying at the renowned colleges and universities of the United States attracts hundreds of international students per year. In order to do so, and given how young people are hardly able to raise the prestigious amount of money those institutes usually require – whether for tuition fees, or as a general living cost - at that point in their lives, international students have to resort to other sources of income to fund their studies. When scholarships and part time jobs fail, when money borrowed from parents and friends is not enough, students are confronted with the necessity of getting a student loan in order to continue their studies.
Without a cosigner, though, the United States banks will not offer financial aid in the form of a private student loan to an international student. Specifically, the vast majority of international student loan programs have a U.S citizen or permanent U.S resident creditworthy cosigner as a requirement. Alternatively, there are a few loans that require a cosigner from a student’s home country.
The obligatory requirement of a cosigner - whether they are domestic to the States or hailing from the student’s home country - exists to serve as a backup insurance for the lender party and facilitate the eventual collection of the loan.
Why consider applying for a student loan?
There are people that feel that their savings, potential scholarships and other sources of income or any combination thereof should be enough to cover their expenses. While that may be true for some, most find that their expenses are not quite what they were expecting. To be more specific, here are five reasons why you might want to consider applying for a student loan:
· Housing: On-campus housing, while convenient, is more often than not more expensive than renting from a private landlord. Given how a large number of universities require first-year international students to live in on-campus housing, this could pose a problem for your budget.
· Books/Lab Costs: Despite the estimated amount given by universities, these costs vary greatly depending on your major and can end up costing considerably more than you would expect.
· Unexpected costs: These may include problems with housing, cell phone bills or other unpleasant surprises that can’t really be predicted, such as medical services costs. Having saved money for such unexpected occurrences will keep you stress free and safe.
· Flights home: This one is really easy to forget. When holidays come, you may find yourself struggling to scrape money together to visit home. Not to mention how it is always best to book flights in advance to get them on lower prices, so having that extra money stored should help nicely with that.
Federal Student Loans
Having a creditworthy cosigner goes a long way to getting your educational loan approved. At some instances, it may even lower the interest rate of the loan considerably – which could potentially save students hundreds if not thousands in the long term. If finding such a guarantor is out of your reach, though, you still have options to choose from.
Your first step should be to submit the Free Application for Federal Student Aid, or FAFSA in short. It Is a short process that can easily be done online, using the free online application at fafsa.ed.gov. Before starting the complete application process, use the FAFSA4caster to view an estimate of your eligibility for federal loans.
In short, according to FAFSA’s page, in order to be eligible for federal student aid you must pass the following requirements:
· Be a citizen or non-citizen (most commonly having a “green card”, a permanent resident alien) of the United States.
· Have a valid Social Security Number.
· Have a high school diploma, or a General Education Development certificate, or have completed homeschooling.
· Be enrolled in an eligible program as a regular student seeking a degree or certificate.
· Maintain satisfactory academic prowess.
· Not owe a refund on a federal student grant or be in default on a federal student loan.
· Register with the Selective Service System, if you are a male and not currently on active duty in the U.S Armed Forces.
· Not have a conviction for the possession or sale of illegal drugs for an offense that occurred while you were receiving federal student aid (grants, work-study or loans). If you have such a conviction, you must complete the Student Aid Eligibility Worksheet to determine if you are eligible for aid or partially eligible for aid.
There exist many federal financial aid options which do not require an additional signer, most popular of which are the following: Stafford Loans, Perkins Loans, and PLUS Loans.
· Stafford Loan: There are two kinds. The first, Subsidized Stafford Loans, are awarded on a financial need basis, and carry the benefit of subsidized interest. The second, Unsubsidized Stafford Loans, are not need-based. In other words, any student submitting FAFSA is eligible to receive aid. Should their request be accepted, they are responsible for paying any interest accrued while in school.
· Perkins Loan: This program provides assistance to qualifying students who are able to demonstrate financial need and seek a higher degree. Notably, not every school offers this type of loan to their students, so one should be careful to consult the school’s financial aid office to find out.
· PLUS Loan: This type of loan has higher interest rates compared to other types of federal student loans. On the flip side, however, PLUS Loan rates are still lower than rates offered by most private student loan lenders. Moreover, they are not issued on the basis of creditworthiness, as there is no credit check.
Alternative Student Loan Options
· Global Student Loan Corporation (GSLC): partners with financial institutions around the world to provide loans for educational related expenses to international students. In order to be eligible, a student must be at least 18 years old or older. GSLC does not require a cosigner from the U.S., but you must have a cosigner from your country. In addition to providing tuition, GSLC also covers expenses such as fees, computers, insurance, travel, communication and housing. Repayment of a loan is determined by each individual lender and can vary, so one should carefully review the lender’s loan terms and conditions for any related questions.
· Credilia Financial Services: Credillia is a non-bank finance company that offers private student loans to international students from India. Credilia does not require a cosigner from the U.S., but the student must have a cosigner from India, usually a parent or relative. In addition, the loan is secured by collateral, such as a home or other property. Interest rates begin at 13.5 percent and a choice of flexible repayment options, for example: Paying only simple interest during the course period and principle plus interest after the completion of studies and grace period. Repayment periods can be extended, if genuine reasons are presented – this is reviewed on a case to case basis.
· Stilt: Stilt, a financial technology company located in San Francisco, provides collateral free personal loans at low interest rates. Most of their borrowers are not able to get loans from banks, because they are considered high risk. Their student loans have an upper limit of $5,000 and can be used for tuition fees, rental deposits, living expenses or buying things related to their education. Notably, Stilt not only does not require a co-signer or collateral, but will not accept one even if there is one.
Funding your studies as an international student can be a hell of a hassle. We sincerely hope our article is going to shed light on the dark for confused yet interested parties. Should you commit to go through with a particular student loan, it is vital to remember that the loan becomes a part of your financial history. Loan payments should be absolutely taken into consideration when creating a budget for your expenses and thought of as just as important as your rent.
We have two final pieces of advice for you. First, in order to save yourself from unnecessary problems, you should consider automatic debit payment. Essentially, this means your account is automatically charged on a set date, every month to pay your lender - just make sure you have enough funds in your account.
Secondly, you want to educate yourself in debt reduction strategies in order to calculate how you’re going to approach your loan. The two most popular strategies are called, debt-snowball and debt-stacking. Having a plan goes a long way to having a successful conclusion in any endeavor.
There may be other options to international students than the ones listed above. Check out http://www.paymystudentloans.com/student-loan-without-cosigner/ for currentinformation.