Guide to Personal Loans for H-1B Visa Holders

Susan GuilloryUpdated September 12, 2022

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

You’ve arrived in the U.S. as an H-1 B visa holder with a job lined up and excitement about the future ahead. What you don’t have, however, is money to cover all the expenses involved with relocating to another country.While you may find it challenging to get a loan, you do have options. Here’s what you need to know about qualifying for a personal loan for H-1B visa holders.

Can H-1B Visa Holders Get Personal Loans?

For people who have moved to the U.S. from other countries, there are hurdles to getting personal loans. But it is possible. There are H-1B personal loan options you may qualify for. And getting a personal loan could benefit you by building your credit score. That will help you in getting other types of credit in the future.

Personal Loan Requirements

For any personal loan, there are personal loan requirements you must meet in order to be approved. These can vary from lender to lender. Typically, lenders will look at your credit score. Your current employment will also need to be verified. Additionally, you may have to meet an income threshold or have a certain debt-to-income ratio for personal loans. Debt-to-income ratio (DTI) compares your gross monthly income to your monthly debt payments like credit cards.

Personal Loan Lender Concerns

There are a couple of reasons why getting a personal loan for H-1B visa holders can be difficult. First, most lenders want borrowers to have a solid credit history. Whatever credit you built up in your own country won’t qualify, unfortunately. Even a personal loan from a credit union, such as a DCU personal loan for H-1B visa holders, typically considers an individual's credit score to help determine personal loan eligibility.Also, because the H-1B visa is temporary, some lenders may consider you a higher risk. They may be concerned that you will return to your country before paying off your loan.

Benefits of Taking Out a Personal Loan with an H-1B Visa

If you plan on staying in the U.S. for any period of time, you’ll need to build your credit history and credit score to qualify for better financing options in the future. Taking out a personal loan and making your monthly payment on time each month may help build your credit score. Typically, the more financial responsibility you demonstrate, the stronger your credit can become. That way, if you decide to buy a house or a car down the road, you may find it easier to get financing and qualify for loans with lower interest rates.

Tips for H-1B Holders Interested in Personal Loans

If a personal loan for H-1B holders sounds like a good fit for you, here are a few personal loan approval tips to help you.Do some online research to find lenders who will offer personal loans to H-1B visa holders. Each lender should list its loan requirements. This will give you a sense of which ones might be willing to work with H-1B visa holders.Next, gather any documents required to apply. These include your photo ID, possibly your visa, proof of employment, proof of income, and tax return statements, if you have them. Next, get preapproved for a loan. This is a process to find out whether you qualify for a loan. If you do, you’ll see what interest rate and terms you might be eligible for. Once you have a few preapproved offers, you can shop for the one with the lowest interest rate.

Alternatives to H-1B Personal Loans

A personal loan for H-1B visa holders isn’t your only option to get access to money to help cover expenses. Here are a few other options.

Payday Loans

A payday loan is a short-term loan that charges fees for the money you borrow and has a very high interest rate. Typically, a payday loan has a 14-day repayment term. If you are able to pay it within that two-week period, it might be an option to consider. But if you can’t repay the loan in that timeframe, the loan will be rolled over and you’ll be charged more fees.When it comes to payday loans vs personal loans there are both benefits and drawbacks. Make sure you fully understand what these loans entail before you apply for one.

Family Loans

If you have family members who can lend you money to get settled, this may be your easiest and most affordable form of financing. The only drawback is that you won’t be able to build credit with this option.

Credit Cards

Many individuals who relocate to the U.S. qualify for credit cards, which they can use to purchase what they need. Some credit cards offer rewards, and points can be earned with each purchase that can be redeemed for things like travel and cash back.There are many differences between a personal loan vs credit cards, so make sure you are well versed in the terms of both before you apply for either.

Personal Loans and H-1Bs: The Takeaway

Taking out a personal loan as an H-1B visa holder can be challenging, but it is possible. Although most lenders use a person’s credit score to determine loan eligibility, some lenders are willing to work with HB-1 visa holders. Do some research to find lenders that do so, and then apply for preapproval. Once you’re preapproved, you can look for a loan with the best terms and lowest interest rate.

3 Personal Loan Tips

Shopping around helps ensure that you’re getting the best deal you can. Lantern by SoFi makes this easy. With one online application, you can find and compare personal loan offers from multiple lenders.
If the interest rates you’re being offered seem too high, try lowering the loan amount. Generally, the larger the loan, the greater the risk for lenders, who likely charge a higher interest rate for the increased risk level.
Watch out for lenders who advertise “guaranteed” loans. Legitimate lenders will want to know your creditworthiness before offering a loan.

Frequently Asked Questions

How can H-1B holders get a personal loan?

How frequently can H-1B holders get a personal loan?

Photo credit: iStock/ericsphotography

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About the Author

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.

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