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Guide to Student Loan Refinancing for International Students

Guide to Student Loan Refinancing for International Students
Jennifer Calonia
Jennifer CaloniaUpdated December 6, 2022
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With student loan refinancing, a private lender pays off your existing student loans and gives you a new student loan. Refinancing might offer you a lower interest rate or more flexible terms. As an international student, however, refinancing your student loans might prove challenging — though not impossible.Many lenders who offer student loan refinancing typically require borrowers to be US citizens or permanent residents in order to qualify for refinancing. But some lenders may offer flexibility in their student loan refinancing programs that serve international borrowers.Read on to learn more about international student loan refinancing.

Challenges of International Student Loan Refinancing

Student loan refinance for international students can be more difficult than it is for domestic borrowers. These are two of the main hurdles. 

No Credit History

Private lenders commonly perform a credit check to decide whether to lend to a prospective borrower. They review your credit score and credit report to see if you’ve missed loan or credit card payments or have defaulted on your debt obligation. This helps them assess whether you’re likely to successfully repay the loan. However, students who don’t have a Social Security number might find it hard to establish this kind of borrowing history. Even credit cards designed for consumers with no credit often require cardholders to be US citizens or permanent residents. It may become a catch-22 in which you need credit to build a credit history, but if you are not a citizen or permanent resident of the US, it’s difficult to get credit. This doesn’t make it impossible to refinance student loans as an international student, but it is more challenging.

Qualifying Visas

Another reason that the refinancing criteria for international students might be more difficult is because students’ ability to stay in the country is limited. For example, temporary visas, like F-1 and J-1, are examples of commonly held visas by international student borrowers.Since visas for international students only allow them to temporarily remain in the U.S., there’s a greater risk that they might leave the country — whether voluntarily or not — during the loan’s repayment period. If the borrower isn’t a US citizen or resident, and is outside of the country, it might be challenging for lenders to enforce repayment.However, some private refinancing lenders will typically lend to international borrowers with certain visas. That may mean you still have options for refinancing your student loan debt.

How to Refinance Students Loans as an International Student

First, you’ll want to find out if you have private or federal student loans. Generally, international students are ineligible for federal student aid. But if at any point in your education, you received federal student loans as a non-US citizen, approach refinancing with caution. There are pros and cons of student loan refinancing you need to be aware of.For instance, refinancing federal student loans removes them from the federal student loan system and places them in the private lending sector. When that happens, you’ll immediately lose access to federal benefits and protections, like student loan forgiveness programs, income-driven repayment plans, and more.If you are still hoping to refinance your existing student loans, you may have access to a student loan refinancing in one of the following ways.   

1. Add a US Cosigner to Your Refinance Loan

Not all lenders accept a cosigner for primary international borrowers, but some do. Securing a cosigner who’s a US citizen or permanent resident could improve your eligibility for international student loan refinancing. The cosigner should ideally have strong credit. They also need to be willing to accept responsibility for repaying the loan if you can’t. Since this individual is agreeing to take liability for your student debt if you can’t repay it, find someone you have a trusted and close relationship with. For example, a parent or relative who lives in the US could be good options.

2. Look for Lenders With Flexibility

Certain lenders also typically offer flexible student loan refinancing programs that may be helpful for international students. For example, some lenders might be willing to refinance loans for international borrowers with a visa that permits them to work in the US for at least two years.

Qualifying for Refinancing Without a Cosigner

If you don’t have access to a willing cosigner, or you prefer refinancing student loans on your own, there are a few steps you can take that may strengthen a future refinancing application.

Keep Your Visa Active

Since your visa’s status will likely be a consideration when applying for a student loan refinance, it’s important to keep it up to date. In fact, when applying for refinancing, you’ll need to have a minimum of two years before your visa’s expiration date. An exception might occur if you have already filed for a renewal visa or filed for permanent residency in the US.

Maintain a Steady Income

Another criteria that lenders consider for any student loan refinance is your income. They want to know that you have a reliable and high enough income to repay your loan.Retain copies of your employment agreements and paystubs so you have your income and employment history ready to provide when asked for it.

Establish a US Credit History

Although it might be difficult to get unsecured credit without being a US-citizen or permanent resident, you might be able to leverage other credit-building tools, like a secured credit card.To get a secured credit card, you provide a refundable deposit to the card issuer for a specific amount. That amount becomes the credit limit for your secured card. As you use your credit card for purchases, and make on-time payments, you’ll likely develop a credit history. Additionally, you could ask a family member or friend with a US-based credit card account if they’ll add you as an authorized user on a credit card. In doing so, the positive repayment activity on the account could help you make small strides in establishing your credit.

The Takeaway

Securing a student loan refinance for international students is difficult. However, you may be able to refinance by using a cosigner, or through a lender who offers flexible student loan refinancing options for international students.If you’re ready to explore student loan refinancing, it’s essential to do some comparison shopping. Lantern’s online marketplace makes the process easier by providing you with loan options from multiple lenders so that you can find rates, terms, and eligibility requirements that fit your needs. All you have to do is fill out one simple form.Check your student loan refinancing rates with Lantern.

Frequently Asked Questions

Can international students refinance student loans?
Is it possible to refinance an international loan?
Can I refinance my student loans while abroad?
Photo credit: iStock/Kateryna Onyshchuk

About the Author

Jennifer Calonia

Jennifer Calonia

Jennifer Calonia is a Los Angeles-based finance writer who has covered the gamut, including student loans, credit card rewards, consumer loans, and debt. Her work has been featured in outlets like Bankrate, NerdWallet, Business Insider, Yahoo Finance, and U.S. News.
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