In the USA, the practice of providing educational loans to students and their parents has been around for a long time. This form of financial support for education is popular, as the average American family does not have enough money to pay at least one year of study even in the most inexpensive college, not counting the cost of living (if the student is studying in another city), meals, textbooks, and other necessary things. For international students, these amounts grow several times.
In the United States, there are three forms of student loans: federal student loans, parent loans, and private loans. And only one of them is available to international students - this is a private loan, which is called Private International Student Loan.
What Is International Student Loan?
This is a special type of financial assistance for students who are not citizens or residents of the United States who wish to study at one of the American colleges or universities located in the United States.
The loan is issued by investors and lenders, which may be banks. It is difficult to obtain such an educational loan, but it is possible under certain conditions.
Conditions for Obtaining a Loan
The full list of conditions and requirements for a student applying for a private educational loan may vary depending on the lender. However, several basic and prerequisites must be met when applying for a loan.
First, a prospective student over the age of 18 should not be a US citizen or resident.
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Secondly, the applicant must be admitted to the selected college or university and have appropriate confirmation from the university. He must also get a student visa and take out insurance.
One of the most important conditions for obtaining private financial assistance for all international students is a surety. Surety plays an important role in the lending process, as this person assumes the obligation to pay the student's debt if after graduation he will not be able to cope with financial obligations or intends to refuse to comply with them.
Only a US citizen or resident who has been a resident in the United States for at least two years may act as a guarantor. Also, he must have an official job and an excellent credit history.
The search for a guarantor is one of the most difficult tasks that an international student will have to face. As a rule, this role is played by family members or relatives who are US citizens or residents. It can also be friends or family members. The surety must prove its solvency and provide all the necessary information about itself (status, work, income), which will be included in the application for a loan, and also sign this application on an equal basis with the borrower himself.
You will also need documents confirming the presence of any funds from the applicant himself. This can be bank deposits, wages (if the applicant works), income received from the rental of real estate, the total income of the parents, and so on. This issue should be taken with particular care since correctly selected documents, and the availability of a student's funds not only increase the likelihood of a bank approving a loan but can also slightly reduce the interest rate.
Benefits of a Lending Program
Like all loans, a private loan is not free aid and is subject to interest payments. But the system of private educational loans is quite flexible, and interest rates are lower than with a regular loan, which allows you to create a fairly convenient payment schedule.
There is also a deferred payment option. Moreover, not for one year, as in many federal lending programs, but for the entire period of study. This means that the borrower must pay the first payment on the loan shortly after receiving a diploma. Typically, the loan term for such a program is 10 years. Most lenders do not charge a fee for early repayment of the loan if the graduate has the opportunity to do so.
Besides, unlike most grants and scholarships, a private educational loan is issued to cover the cost of both the training itself and the costs associated with it (housing, transportation, teaching aids, etc.).
How to Get a Loan?
If the applicant has already entered an educational institution in the United States, the first thing to do is to contact the Financial Aid Office at the chosen university. The staff of the centre will help to calculate the full cost of training and the amount that a future student can request as a private loan, taking into account other expenses associated with training.