Lending and borrowing funds are very straightforward and common elements of our economy and financial system. When a student borrows private loans to cover their education expenses, then there are three parties who are involved in the process – the lender, the borrower and most commonly, the co-signer. Since most of the students either don’t have credit history or have very limited one, therefore the lenders often hesitant in lending funds to students to cover their education costs without a co-signer.
When the borrower has no or little credit history, then the bank doesn’t consider the loan application as the person doesn’t seems like to have good lending risk in eyes of bank. So, in such scenario, the bank may ask for a co-signer having good or excellent credit history. Guardians and parents usually serve as a cosigner for the students because they generally have good credit history and can take the liability to repay the loan if the student fails to meet the payback requirements. However, there are few other options open for students where they don’t require a cosigner to avail loans to cover their education costs.
Federal Loans and Grants are reckoned as the best international student loans that don’t require any cosigner. This type of loan is open to all international students, regardless of need and credit history of students and requires no cosigner either. International students who are in need may simply ask for assistance with such loans and also ensure that request is fulfilled within stipulated deadlines. Before applying for any private student loans, students must always pursue federal student loans and grants as it requires no cosigner and students with no credit history may also apply for such loans. It has several benefits including,
-More widely available
-Have more encouraging terms for borrowers
-Lower interest rates
-Don’t take creditworthiness of borrower into account
However, these Federal loans and grants come with borrowing caps, and some of the students actually hit the highest point of eligibility for a given semester before they fully cover all the educations costs. These types of students may also require financial assistance at sometime and to get such loans they may require their parents to serve as cosigner.
List of Other Loans Available for International Students
GSLC partners with the financial institutions across the globe to offer educational loans and grants to all international students. This type of loan don’t require any cosigner belonging to USA, however the students need to have cosigner to apply such loan who belongs to his/her country. Besides covering the tuition fees, the GSLC student loans also cover expenses for housing, communication, travel, insurance and computers.
Credilia Financial Services is basically a non-bank financial institute that provides private student loans and grants to International Students from India. The loans provided by this organization don’t require any cosigner from USA, but the applicant needs to provide a consigner who is from India, generally a relative or parents of the applicant. This type of loan may also ask to provide collateral, like property or a home.
Perkins Loans are basically federally funded loans which are managed by Institution of Higher Education or IHE. This type of loan is provided to students who express significant financial requirement to cover their educational expenses. Usually, families with annual income less than $25,000 are eligible for this type of loans; however the borrower still needs to submit their FAFSA even if their annual income exceeds $25,000. Perkins loans actually have fixed interest rate of 5% and the repayment of the loan starts from 9 months post graduation and it requires no co-signer.
Private Student Loans
Student loans that are borrowed from any private sources, like credit unions or banks, usually require a co-signer. But, if the borrower is equipped with very good credit record combined with dynamic measure of diversity & longevity, then they may easily get qualified for student loans without any co-singer. Another crucial consideration is the employment viewpoint of the student during their schooldays. If the international student secures stable job which highlight their potential to repay the loan amount, then their application is likely to get approved easily even if the lender considers them at high-risk. However, the interest rates attached to private loans are quite higher compared to other government loans.
Few Institutes Offering No-Cosigner International Student Loans
-University of Chicago
-Pennsylvania’s Wharton School
-Yale School of Management
The best suggestion to international students intending to study abroad is to explore all the options available to them before applying for any private loan. Students must try to fund their education either through grants, scholarships or gift money. There is no loan available for international students that don’t require cosigner. Each loan for international student requires a cosigner, either from home country or from USA. Besides, the interest rates will be higher indeed for students. Remember, whatever you borrow, eventually you need to payback, with interest. So, always try to cover the education costs through scholarships, grants or federal loans.