We do look at credit scores when available-but we do not penalize students who have no credit

We do look at credit scores when available-but we do not penalize students who have no credit

  • Credit scores: A high credit score means the applicant has a history of making timely payments on debt. Therefore, they are more likely to do so in the future. Banks avoid loaning money to people with either a poor credit score or no credit score. In many countries, credit scores are not tracked. And U.S. banks often are unable to access or accept credit reports from other countries. (As a helpful hint, credit scores might also be called “FICO scores” in the U.S.)
  • Collateral: Traditional banks lend only when an applicant has collateral with a value equal to (or generally exceeding) the amount loaned. Collateral is an asset, such as a home, car, or other piece of personal property. A piece of collateral can be pledged against the loan and then seized by the bank if the applicant fails to make payments. If the borrower fails to make payments, the bank can seize the asset, sell it, and recoup its losses. As we have stated, higher education in the U.S. can be very expensive-so the families of students from developing countries typically do not have enough collateral to cover the value of the loan. However, even if they do, U.S. banks find it legally difficult to seize property in a foreign country, which means the collateral arrangement simply does not work.
  • Cosigner: If someone does not have enough collateral or established credit history, banks might accept a cosigner. Cosigners are individuals with good credit or collateral who are willing to verify a loan recipient’s trustworthiness-essentially, they state that they are so https://paydayloansohio.org/ confident of the borrower’s integrity, they are willing to pay the person’s debt if the individual defaults. Cosigners are often used to authorize education loans; they are typically the student’s parents. But this is not usually an option for international students because banks are looking for in-country cosigners with significant assets.

If you do not meet any of these loan criteria, it does not mean you cannot get a loan in the U.S.

For example, MPOWER turned this model on its head. We also do not require collateral or a cosigner. Instead, we estimate each student’s future earning potential and offer loans based on their future ability to pay. We may also consider a student’s major and their existing GPA. Good students who are training to work in high-demand fields are often excellent candidates for a loan.

What Are Other Ways International Students Can Secure Financing for School?

  • Gifts or loans from family members
  • Personal savings, often from working several years between undergraduate and graduate studies
  • Loans from banks in their home country (although these banks typically require collateral, so this is usually only an option for students from middle-upper and upper-income families)
  • Scholarships (see below)
  • Loans from inerica, like MPOWER Financing

It might help to know that MPOWER is the only lender that provides fixed-rate, no-cosigner loans to international students. In fact, U.S. News and World Report rated our product as the best loan for international students.

Are Undocumented Immigrants Eligible for Financial Aid, Loans, and Scholarships?

Maureen: Yes, undocumented immigrants are eligible for financial aid, loans, and scholarships. However, it is much more difficult for them to find and qualify for these resources.

  • Check if you live in one of the 17 states and territories that offer in-state tuition to undocumented students enrolled in public universities. In some cases, undocumented immigrants in those regions might also qualify for university-funded financial aid.
  • Contact your intended university’s Office for Undocumented Student Services. Not all universities have these, and sometimes they have different names, but they are great resources.

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