International student loans for the USA: All you need to know

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Prodigy Finance - May, 01 2024

11 min read

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At Prodigy Finance, we're committed to helping international talent to achieve their education dreams. We offer international student loans to qualified individuals attending top master's programmes in the US.

The United States has long been a preferred destination for students worldwide seeking to pursue education abroad, with more than 1.4 million visas issued to Indian students alone in 2023. With its prestigious universities, diverse academic programmes, and world-class research facilities, the USA offers a unique education experience that is highly valued globally. Many students rely on student loans to fund their education. Understanding the intricacies of international student loans for the USA is crucial for making informed decisions and navigating the landscape of higher education financing.

So read on as we explore the various types of student loans available, eligibility criteria, application processes, repayment options, and tips for securing loans.

Key Takeaways

  • Different types of student loans are available for international students in the USA, including federal, private, and institutional loans. Each type of student loan has different eligibility requirements and application processes.
  • Start your loan research and application process well in advance to allow for a smoother transition. Factor in processing times and use a budget to ensure your loan amount realistically covers all your expenses.
  • Student loans are a powerful tool to bridge the financial gap. Understand the true cost of your education and create a repayment plan that will help you manage your finances effectively.

Understanding International Student Loans for the USA

When you're considering student loans for international studies, it's crucial to understand the types of loans available and the eligibility criteria. Here's a breakdown of the most common options for international student loans for the USA:

  • Bank loans: Many banks offer student loans specifically for international students.
  • University loans: Some universities offer their own loans to students.
  • Private/Global loan programmes: These are programmes that offer loans to students from many different countries.

To be eligible for an international student loan, you must be enrolled in an accredited degree programme. You may need a U.S. citizen or permanent resident as a co-signer due to the limited availability of federal student loans for international students.

There are other options for students who may not have the resources or support to provide collateral or secure a co-signer. Prodigy Finance offers a no-collateral, no co-signer loan option specifically designed for international postgraduate students.

Here's a quick overview of what to expect with private international student loans:


Co-signer Requirement


Must be a U.S. citizen or permanent resident with good credit


Interest Rates


Typically higher than federal loans, vary by lender and credit worthiness


Repayment Options


Varying terms, typically starting post-graduation

Remember, the terms for education loans for the USA can vary widely, and it's important to understand key considerations like eligibility, interest rates, and repayment conditions.

You would want to consider repayment terms carefully, research co-signer requirements, and seek advice from financial aid advisors.

1. Eligibility for Education Loans for the USA

To qualify for most student loans in the USA, the student must be enrolled or accepted for enrollment as a student at an eligible institution. International students also typically need a U.S. citizen or permanent resident, with a solid credit history, to act as a co-signer. This requirement is because most private lenders and some student loan programmes want reassurance that the loan will be repaid, and a co-signer provides that guarantee.

Here are some key points you should know about eligibility:

  • Most federal student loans aren't available to international students, so you'll likely be looking at private loans.
  • When exploring private loans, you'll find that some lenders offer products specifically designed for international students without the need for a co-signer. It can be a viable option for students who may not have assets to use as collateral or access to a qualified co-signer in the USA.
  • Your enrollment in an eligible U.S. college or university is essential, as is maintaining satisfactory academic progress.
  • The availability of scholarships and financial aid may vary, so check if your institution offers any aid that you might qualify for.

It is important to consider the long-term implications of borrowing and ensure you understand the terms and conditions attached to your loan.

2. Expenses covered

When considering international student loans for the USA, it's essential to know that the approved loan amount depends upon the expenses covered. Loan limits are often tied to the cost of attendance (CoA) and can vary based on your creditworthiness and the lender's terms. Other expenses, such as books and accommodation, may also be covered by loan amounts along with the tuition fee.

Here are some key points to keep in mind:

Here are some key points to keep in mind:

  • Tuition Fee: This is a crucial factor in determining loan limits. It includes tuition, administration fees, and mandatory charges associated with your academic programme.
  • Living Expenses: Some loan options may also cover living expenses, such as housing, food, and transportation. However, the extent of coverage for living expenses can vary depending on the lender and your specific loan programme.
  • Credit History: Your credit score and history can influence the loan amount. A better credit score may lead to higher loan limits.
  • Lender's Criteria: Each lender has specific requirements and maximum loan amounts, which can affect how much you can borrow.

So, whichever lender you go with, carefully assess all your anticipated expenses and understand the terms and conditions before committing to a loan.

3. Repayment Options

While it is important to secure loans in the first place, exploring repayment options after graduation can significantly affect your financial future. Various plans offer flexibility based on your income and employment status. You'll find that international student loans come with different repayment strategies, such as full deferral, interest-only, and immediate repayment. These plans are tailored to ease the transition from student to working professional.

Here's what you need to consider:

  • Repayment Start Dates: Some plans allow you a grace period after graduation, while others may require immediate payments.
  • Deferral Options: Understand the circumstances under which you can temporarily suspend payments without affecting your credit score.
  • Loan Forgiveness Programmes: Certain careers, especially in public service, may qualify you for loan forgiveness.

To manage your loan repayment successfully, stay informed about your options and maintain communication with your loan servicer if you encounter financial difficulties.

4. Interest Rates

Interest rates are a crucial factor to consider when taking out an international student loan for the USA. They significantly impact the total cost of your education. Here's a breakdown of what you need to understand about interest rates for these loans:

  • Fixed Margin: This is a flat rate set by the lender and remains constant throughout the loan term.
    Variable Benchmark Rate: This is a fluctuating rate that is tied to a financial index, such as the Prime Rate or Secured - --- Overnight Financing Rate (SOFR). As the benchmark rate goes up or down, so too does the variable portion of your interest rate.
  • Carefully Compare Rates: Shop around and compare interest rates from different lenders before committing to a loan. Even a small difference in the interest rate can translate to a significant amount of money paid over the life of the loan.

Federal Vs. Private Loans

When comparing federal and private student loans, it's essential to recognise that international students are ineligible for federal loans and must rely on private lenders to finance their education in the USA. This means you'll be navigating a different landscape of loan options, so understanding the key differences is crucial.

Here are some facts to consider:

  • Interest Rates: Private loans often have higher interest rates, which can significantly affect the total amount you'll repay over time. Carefully compare interest rates from different lenders to find the most competitive option.
  • Co-signer Requirements: Most private lenders require you to have a co-signer who's a U.S. citizen, or permanent resident with good credit. If you don't have a qualified co-signer, explore lenders like Prodigy Finance that offer alternative eligibility criteria.
  • Repayment Flexibility: Private loans can offer more flexible amounts and repayment terms, but federal loans typically have more borrower-friendly repayment options.
  • Loan Terms: While federal loans have standard terms set by law, private loan terms can vary widely between lenders.

Navigating the Application Process

To successfully apply for an international student loan in the USA, you'll need to meticulously gather and submit all the required documentation. Start by researching the loan options available to you, including federal and private loans. For federal student loans, you must complete the Free Application for Federal Student Aid (FAFSA), keeping an eye on submission deadlines.

If you're eyeing private loans, prepare for a different set of requirements. Be ready with financial statements, proof of admission, and a solid academic record to strengthen your application.

Here's a breakdown of the key steps involved in applying for international student loans for the USA:

  1. Research and Compare Options: Don't rush into the first loan offer you find! Take your time to research different lenders specialising in international student loans. Compare interest rates, repayment terms, and any specific benefits offered by each lender. Utilise online resources, and don't hesitate to contact lenders directly to clarify any questions.
  2. Gather Required Documents: Once you've chosen a lender, compile the necessary documents for your application. This typically includes:
    • A completed application form
    • Official transcripts from your previous educational institutions
    • Proof of acceptance from your U.S. university (I-20 form)
    • Proof of financial resources (bank statements, scholarships/grants awarded)
    • Passport copy
    • For co-signer loans: Co-signer's documents like proof of U.S. citizenship/residency and tax returns (if required)
  3. Meet Eligibility Criteria: Review the eligibility requirements set by the lender. These may include factors like your academic record, chosen course of study, and the financial health of your co-signer (if required).
  4. Submit Your Application: Once you have all the required documents in order, carefully submit your application to the chosen lender. Be sure to double-check all information for accuracy before submitting.
  5. Await Processing and Decision: The processing time for international student loan applications can vary depending on the lender and the complexity of your case. Be patient and maintain clear communication with the lender if you have any questions during the process.
  6. Review Loan Offer (if approved): If your application is successful, you will receive a loan offer outlining the loan amount, interest rate, repayment terms, and any associated fees. Carefully review the offer and ensure you understand all the details before accepting.

Stay informed and proactive throughout the process to secure the funding you need for your education in the USA.

Finalising Loan Decisions

When you're ready to finalise your loan decisions, carefully weigh the repayment terms, interest rates, and potential need for a co-signer to ensure the choice fits within your financial plan. It's crucial to evaluate all the loan options available to you, taking into account the fees involved and the various repayment plans offered. Don't rush into a decision; instead, take your time to understand the responsibilities and obligations associated with each option.

Before you make your final choice, consider the following:

1. Don't Overborrow

Budget your expenses carefully. Create a realistic budget that outlines all your anticipated expenses during your studies in the USA. This includes tuition fees, living costs, health insurance, books, and transportation. Resist the temptation to borrow more than you absolutely need. You may even seek professional consultation with financial aid advisors to ensure your loan aligns with your financial goals.

2. Loan Coverage and Impact

Interest rates and repayment terms are key factors that will influence the long-term impact of your loan. You'll need to consider whether you can secure a loan with a competitive interest rate and whether the repayment schedule is manageable with your expected post-graduation income. Consider how student loan repayments might affect your future financial plans. Research the average starting salary for your chosen field of study and calculate the total repayment cost over the loan term.

3. Explore Loan Alternatives

Scholarships and grants are financial awards that don't require repayment. Actively research scholarship opportunities offered by your chosen university, Indian government programmes, or private organisations based on academic merit or financial need. Also, Federal Work-Study (FWS) programmes allow students with financial needs to work part-time on campus or for approved off-campus employers. While the scholarships or grants may not fully cover your expenses, they can contribute and reduce your reliance on loans.

The Bottom Line

Student loans can make your dream of studying in the USA a reality. They can help cover a wide range of expenses, including tuition fees, accommodation, food, travel, and other study-related costs. This guide covers all the details, from types, eligibility criteria, and the loan application process to help you navigate the world of international student loans for the USA. It is important to remember that student loans are a significant financial commitment, but the rewards are immense. Studying in the USA can provide significant career growth along with helping students develop intercultural awareness and an open-minded attitude.

The good news is, even if you don't have collateral like property or a co-signer in the USA, there are options available! Prodigy Finance offers education loans to international students without requiring collateral or a co-signer.

Stay informed and choose wisely — your education in the USA can be a significant step toward your future success.

Frequently Asked Questions

How much loan can a student get in the USA?

There is no one-size-fits-all solution here. The loan amount depends on the lender you choose and your situation. Lenders consider your academic record, chosen course of study, desired university/school, and even future earning potential. There is no set minimum or maximum amount, but it's important to only borrow what you truly need.

Is it hard to get approved for student loans?

Getting approved for international student loans for the USA can be challenging, but certainly not impossible. As an international student, you may need to explore various loan options. However, by following the guidance provided in the above article, securing an education loan for your international studies can be achieved with ease.

Can an international student get a loan in the USA?

Yes, you can get a loan in the USA. But as an international student, you'll likely need a US citizen or permanent resident co-signer. Federal student loans, which are backed by the US government, are generally not available to international students. Many lenders offer international student loans specifically tailored to the needs of non-US citizens studying in the USA. One such example is Prodigy Finance, which does not require a co-signer or collateral, making it easier for international students to access funding for their education.

How do you qualify for a student loan?

As an international student, you must be enrolled in an accredited degree programme to qualify for most loan options. Typically, you'll need a U.S. citizen or permanent resident co-signer, although some lenders may waive this requirement. Each lender has their own set of eligibility criteria and a list of documents required. They often include factors such as creditworthiness, income, and enrollment status. Carefully go through the terms and conditions of your selected lender to smoothly navigate the complete process.

Who is eligible for a student loan?

To be eligible for a student loan, you must be enrolled or accepted for enrollment as a student at a recognised institution/university. There are limits on how much you can borrow, both per year and over the course of your education. This depends on other factors such as your field of study, career goals, and choice of university.

Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Prodigy Finance loans are offered to eligible borrowers and these loans are governed by English law.

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