For international students, repaying their student loans is an inevitable step in their educational journey. One repayment option that might lessen the financial burden is refinancing.
Refinancing a student loan may provide students access to competitive interest rates, terms or even a better service experience. As an international student, student loan refinancing options are more limited, but they’re not entirely out of reach.
When refinancing a student loan, the refinancing lender pays your original lender the full unpaid balance on the loan, and a new refinance student loan is created for the total amount that was paid on your behalf, plus any applicable fees.
The new loan has completely new features, like a fixed or variable interest rate, and repayment period. You’ll then make monthly payments to the refinance lender to pay down the refinance loan.
U.S. citizenship is typically a minimum requirement for many U.S. banks and financial institutions that refinance student loans. U.S. institutions that have no experience in servicing and collecting upon international loans will generally limit their eligibility requirements to U.S. permanent residents and citizens.
There are some lenders, such as MPOWER Financing, that finance international education loans.
Refinancing lenders often consider other eligibility factors when they examine a refinance student loan application, including:
As an international student, satisfying all of these points might be challenging, though not impossible.
If you don’t meet general eligibility requirements for refinancing education loans today, you still have a few options.
International students who borrowed a private student loan from a U.S. lender likely already have the beginnings of a credit history in the U.S. However, if this isn’t your situation, you can slowly build a U.S. credit profile to be eligible later for international student loan refinancing.
Ask a trusted family member if they’re willing to add you as an authorized user on their credit card. Some card issuers report repayment and activity data for all users on a credit card account to the major credit bureaus. As an authorized user on the card, positive repayment activity and responsible usage on the card account can help boost your credit.
A cosigner is an individual who agrees to take legal financial responsibility for the loan if you fail to make timely payments. If you don’t qualify on your own, some lenders allow a cosigner with strong credit as a co-borrower on a refinancing loan.
The minimum requirements necessary to be considered for cosigning a loan include a minimum credit score of 670. However, credit score requirements for cosigners vary among lenders. Additionally, a cosigner must meet the lender’s other requirements, such as income and debt-to-income ratio.
Since cosigning a loan is a major responsibility and favor, cosigners typically are a spouse, parent, grandparent, close relative or trusted and long-term friend.
Meeting the eligibility requirements for a student loan refinance has its fair share of barriers. Fortunately some lenders, like MPOWER Financing, offer student loan refinancing specifically for international students.
Flexible requirements could include not requiring a cosigner or collateral to secure the loan, among other advantages.
Private refinance lenders have different underwriting requirements and repayment rules. Below are a few features to examine before refinancing student loans as an international student.
If you qualify, international student loan refinancing can offer many perks – from securing a potentially lower interest rate to simplifying your repayment experience. However, as an international student, you might face challenges qualifying for student loan refinancing.
If you believe refinancing your education loans is the right move for you, there are a handful of ways to move forward starting with the options above. When you’re ready to apply, shop around to find a lender that can help you best reach your student loan repayment goals.
DISCLAIMER – Subject to credit approval, loans are made by Bank of Lake Mills or MPOWER Financing, PBC. Bank of Lake Mills does not have an ownership interest in MPOWER Financing. Neither MPOWER Financing nor Bank of Lake Mills is affiliated with the school you attended or are attending. Bank of Lake Mills is Member FDIC. None of the information contained in this website constitutes a recommendation, solicitation or offer by MPOWER Financing or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.
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