Details on International Student Loans
International Student Loans
Frequently Asked Questions
International Student Loan is pleased to bring you the first loan comparison tool for international students. We
understand that studying in the United States may require you to secure additional financial aid to make that dream
possible. That's why we have developed a private loan comparison tool of all lenders that provide loans to
international students. We have made the loan process easy, quick and simple, comparing those lenders that will help
secure your education to the United States.
Private International Student Loans
Many international students studying in the United States will find that expenses can add up! With tuition, books,
transportation, and living expenses, many international students may soon realize that they cannot financial support
their educational studies entirely on their own. However, don't let this deter your dream of getting an education in
the United States. That's where private student loans come in! Private student loans are available to international
students to help cover these costs while studying in the US.
Most international students must have a US co-signer in order to apply for a student loan. Although there
are no co-signer loan programs at select schools in the USA and Canada, almost all international students will
require a co-signer. A co-signer is legally obligated to repay the loan if the borrower fails to pay. Often
times, the cosigner is a close friend or relative that can assist in getting credit since most
international students cannot receive credit on their own. That co-signer must be a US citizen or permanent
resident, with good credit, who has lived in the US for the past two years. If you do not have a cosigner
see if you're eligible for a no-cosigner loan .
You can begin the loan application simply by doing a loan comparison that will allow you to choose the lender
best suited for you. To make the process go as quickly as possible, you and your co-signer will need to
complete the entire online application thoroughly. Initial credit approval or denial is very quick and
typically takes 2-6 weeks from initial approval.
Interest Rate Explained
When you take out a loan through a lender, you will be responsible for paying back
the amount of money you borrowed (called the principal) plus an additional amount charged by the lender for the loan
The interest rate is calculated based on an index plus a margin that will add an additional percentage interest rate
depending on your cosigner's creditworthiness. The two most common indexes used for international student loans are
the Prime Rate and LIBOR Rate:
- Prime Interest Rate
- This index is determined by the federal funds rate which is set by the US Federal Reserve. This is the rate in
which banks lend to one another and in many cases the interest rate which commercial banks charge their most
- Like the Prime Rate, the LIBOR (London Interbank Offered Rate) is the interest rate that banks borrow from other
banks. This rate is based on the British Bankers' Association and used on the London interbank market. The rate
is an average of the world's most creditworthy bank's interbank deposit rates for overnight and one year terms.
When evaluating the loan, the lender will clarify which index the plan uses. Then, there will be an additional margin
that will be added to this index based on the borrower's individual criteria, including the co-signer's credit
history. Based on their creditworthiness, an additional interest rate will be added to the index which will be the
total interest rate you owe. This will appear on your final loan paperwork as Libor + 2.8%. The application is free,
and when your application is approved, your specific margin will be disclosed to you. At that point you can accept
or refuse the loan. Currently the rates are anywhere between 2.25% APR and 9.11% APR.
Repayment will depend on the loan option you choose. Many international students must consider
this as an important feature of their loan since most students cannot work while they study in the United States.
Because of this, it is important to consider how much the monthly payments will be, when payments will begin, and
how long students may be able to defer paying back the loan. The repayment period typically ranges from 10-25 years,
however the larger the loan the longer the loan repayment period. There are standard repayment plan options
depending on the loan you select:
- Full Deferral
- Students are able to defer payment of the interest and principal until 6 months after graduation as long as
full-time status is maintained. Students can defer payments for a maximum of 4 years consecutively which is the
typical length of a degree seeking student
- Interest Only
- International students only pay the interest while in school, up to 4 consecutive years, and can defer the
principal until 45 days after graduation or when students drop their course load to part-time.
- Immediate Repayment
- Payments on both interest and principal are due immediately once the loan has been issued and dispersed.