How to Find a Cosigner for an International Student Loan
One of the ways you can finance your education in the United States as an international student is to apply for a student loan. While federal financial aid from the U.S. Department of Education is not available for most international students, there are private lenders who will give student loans to international students.
Most of these lenders require you to have a credit history in the U.S. and a reliable income. Since many international students don’t have either, lenders often require you to have a cosigner for your loan. So, how can you find an international student loan cosigner and are there any other options? Let’s take a look.
What is a cosigner for an international student loan?
A cosigner for an international student loan is a person who signs on to your loan and agrees to take responsibility for paying back the loan if you fail to do so.
A cosigner typically must:
- Be a U.S. citizen or permanent resident.
- Have a good credit history in the U.S.
- Have a steady and reliable income.
- Be able to cover the loan payments if necessary.
Benefits of having a cosigner for international student loans
Having a cosigner for your international student loan is beneficial in many ways.
A cosigner with a good credit history can:
- Increase the chances of getting your loan approved.
- Make it more likely that you can reduce the interest rate you will have to pay.
- Help you build your own credit history if you make timely loan payments.
Where to find a cosigner for international student loans
As an international student, finding a cosigner for your student loan can be challenging. You are at an advantage if you have family (including extended family) or friends living in the U.S.
However, a cosigner doesn’t have to be a family member. You can also apply with a mentor, religious leader, former professor or anyone else who meets a lender’s criteria.
An international student loan cosigner is usually someone you know and trust (and who knows and trusts you to pay back the loan in full and on time).
Risks for a cosigner for international student loans
When you ask someone to be a cosigner on your student loan, you should understand that it’s no small favor. When someone cosigns for you, they are taking a risk.
If you fail to make payments, your cosigner will have to make them for you. Late or skipped payments will also damage their credit score, which could make it difficult for your cosigner to open a credit card, take out a mortgage or get approved for other financial products.
This situation could also put a huge strain on your relationship. Even if you make your student loan payments on time every time, cosigning on your loan will affect their debt-to-income ratio, which can affect their ability to get financing in the future.
How to ask a cosigner to cosign
Since it’s a big decision to be a cosigner on an international student loan, you should be prepared when you ask someone to be your cosigner.
Here are some tips for asking someone to cosign on your student loan:
- Explain why you need the loan amount you’re asking for and show them a breakdown of your expenses and budget.
- Create a solid repayment plan that shows your potential cosigner how you’ll manage your monthly student loan payments. This should include your job prospects and anticipated income after graduation
- Tell them what you would do if you ran into a situation in which you couldn’t make a payment.
- Let them know if there’s a cosigner release option that will release them from any obligation toward your student loan. Many lenders offer cosigner release after a certain period of on-time payments. It may also be possible to release a cosigner by refinancing the loan in your own name.
What if you don’t have a cosigner for your international student loan
If you’ve tried to find a cosigner for your international student loan and have not been successful, there are lenders out there, like MPOWER Financing, who offer no-cosigner loans. These loans are based on different criteria, such as your school and program of study, your academic performance and your career and income prospects after graduation. MPOWER Financing offers no-cosigner, no-collateral loans.
No cosigner loans may be your best option if you don’t have a cosigner. Plus, you may be able to refinance your loan terms after you’ve consistently made on-time payments for a specified period of time. (MPOWER also can refinance your student loan.)
Ultimately, the goal is to access the money you need for your education in the U.S., so you can turn your educational and professional goals into a reality.
