As an international student, can you refinance student loans? | Student Loans and Counseling | US News – US News & World Report Money | Vette Leader

While refinancing international student loans can be challenging, it is not impossible. “Many of the hurdles facing student borrowers can be alleviated when borrowers learn more about how their options work,” said David Green, CEO at Earnest, an online lender that offers personal student loans and student loan refinance.

Here’s how to refinance international student loans and determine if it’s the right move for you.

Should I refinance my student loan as an international student?

If you’re considering refinancing, Jennifer Finetti, director of public relations and advocacy at ScholarshipOwl, says you should ask yourself the following questions:

  • Would your new interest rate be lower than your current interest rate?
  • Would your new monthly payment be less than what you are paying now?
  • Would refinancing allow you to remove a co-signer if you have one?

“If the answer to one or more of these questions is yes, then it would be worth applying for your student loan refinance,” says Finetti.

Why is it harder to refinance a student loan as an international student?

If an international borrower leaves the US, lenders can’t enforce payment, Green says. This risk means that few private organizations do business with international students.

Lenders working with international students often require that borrowers have a co-signer who is a US citizen or permanent resident, or meet other conditions that do not apply to domestic students.

Your degree type could also affect your refinancing ability. “Some academic programs are more affordable to refinance and offer more options for international students because the degrees lead to reliably stable careers that lenders trust to support repayment,” says Green.

Lenders also have different residency requirements such as: B. That the school is in a certain state, he says.

It can also be more difficult for international students to prove their creditworthiness. “Most international students haven’t had the time or opportunity to build their credit,” says Finetti.

How to qualify for International Student Loan Refinance

To improve your chances of qualifying for international student loan refinance, try building your credit history before applying. One way to do this is with a secured credit card, Finetti says.

“With a secured credit card, you have to put down a cash deposit to initiate the card, and then you can use that card like a regular credit card,” she says. Your spending limit is usually equal to your cash deposit. So if you deposit $500, you can load up to $500 worth of purchases onto your card.

“If you make timely payments on your card, you can build your credit,” says Finetti. “Just like with a regular credit card, it is recommended that you try not to use more than 30% of your available balance.”

Certain types of employment can also increase your chances of getting a qualification. “Lenders are more likely to approve your application if you can show that you’re employed by an established company,” says Finetti. “Hence, working for a larger, more stable company increases your chances of getting admitted compared to working for a small company.”

It might also be helpful to keep your co-signer or add a creditworthy relative or friend who is a US citizen or permanent resident to co-sign on your loan.

How to refinance a student loan as an international student

Here are steps you can take to refinance a student loan as an international student:

  • Check your visa status. Some lenders require borrowers to have at least two more years on their visas, Finetti says. “If you’ve had your status for less than two years, apply for your status to be renewed before applying for refinance.” You should also be prepared to demonstrate your visa status to your lender.
  • Make sure you meet the credit and income requirements. “When applying for your student loan refinance, lenders will want to see that you have a credit score in the high 600s and proof that you have enough income to make timely payments on your refinanced loan” says Finetti. With a secured credit card, you can improve your credit score and increase your income by getting a job – ideally with a larger, established company.
  • Collect documents. In addition to proving your visa status, lenders must see documents proving your income and assets. “This may include recent bank statements from a U.S. financial institution, a letter from your employer confirming your current employment status and wage or salary information, evidence of scholarship or financial aid from your college, (and) financial statements of investments or other assets.” says Finetti.
  • Consider a co-signer. Even if you can find a lender that doesn’t require a co-signer, one can improve your chances of acceptance. “Your co-signer must be a US citizen or permanent resident and provide proof of this,” says Finetti. “Your co-signer must also have a strong credit history and be able to prove their income and assets.”
  • Compare lenders. Qualification standards vary by lender. You can check the requirements on the lender’s website, but it can also be a good idea to call the lender for more information. While most U.S. lenders don’t consider foreign credit scores, Green says the products lenders offer to international students are evolving, so keep an eye out for new options beginning and ending your college education.
  • Submit an application After choosing a lender and gathering the necessary information, all you have to do is submit an application.

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