Car Loan for International Student
February 16th, 2022 by Sagnik Santra

car loan for international student

Is it even possible to get a car loan for international students? YES! It is possible. Having a car is a necessity for many people. A car is not just an appliance that provides transportation but also becomes one’s friend.

If you’re staying away from your home, having a car can be pretty helpful. Transportation costs in certain countries like the U.S., UK, or Canada can be expensive. If you are thinking about cabs, they are not a good option. The cost is pretty high, and they are not reliable either.

But on the other hand, cars are not cheap! So what’s the solution? How do you own a vehicle as an international student? The answer would be a car loan for international students. In this article, we will discuss how to get a car loan if you are an international student. So make sure to read the entire article!

Why do you need an auto loan as an international student?

There are many reasons for this. If you live away from your hometown, owning a car can be very important. You want to have the independence of traveling whenever and wherever you want.

There are several benefits of owning a car, but transportation cost is one of the most important. You can always go where you want to because owning a car means that you’re not bound by the timetables of public transportation. Not only does it save time, but it saves money too!

Also, countries like Canada or UK are pretty expensive when it comes to transportation costs. Taxis are overpriced, and buses are crowded. So, this leaves you with the only option of owning a car.

What are the requirements for an international student car loan?

Getting approved for an international student car loan is complex compared to a local student loan. You will be driving in a different country, and you need to obey every rule and regulation. There are thee things that you need to begin with:

1. Drivers license:

car loan for international student

Whether it’s an international license or a local one, you need to have some proof of having the ability to drive. If you don’t have a license, you can apply for one, but take driving lessons first. Driving lessons are compulsory in many countries like Canada, U.S., or UK. Suppose you’re an international student wanting to get a U.S. driver’s license. In that case, the Student Exchange Visitor Program (SEVP) has a detailed fact sheet and various resources to assist you in doing so.

2. Auto insurance:

In the U.S., it is required for every car driver to have auto insurance. Most other countries may not be as strict, but having insurance is always a good option. An international student car loan can have several benefits if covered with insurance. A typical bank loan doesn’t cover the entire cost of the vehicle, so it’s better to get some coverage just in case something happens.

3. An auto loan:

This is the most crucial part. Without a loan, you will not be able to get your hands on your car. So, the next thing you should do is apply for an international student car loan. Several companies offer loans to international students, and they have their own list of requirements and restrictions as well.

Documentation for applying for an Auto Loan as an international student

You may be wondering what sort of documentation you need for this. If you are living in the U.S., there are several things that you can use as your documentation when applying for a car loan.

1. VISA: This is the most common and accepted form for international students. If you’re a U.S. visa holder, you can use it as your primary identification document while applying for an auto loan. Make sure to bring your passport and other personal information with you.

2. Finance qualification form: This is an essential document you need to have. The finance qualification form has some basic information about your employment and financial situation.

3. Payment documents: These documents are the most important ones. These will show your monthly costs for tuition, rent, bank statements, utilities, etc. So make sure to have them ready.

4. Proof of lawful residence: This is unnecessary for you if you’re a U.S. visa holder. However, if you’re living in the country on some temporary status, you’ll need to prove your lawful residence.

5.  Employment letter (if applicable): If you’re working, make sure to have a letter from your employer. The letter should state the monthly salary and the year-long employment period.

How to apply for an international auto student loan?

car loan for international student

Once you have the required documentation ready, you can apply for a car loan. You need to follow several steps to apply for a car loan.

1. Research for car loan companies: Since you are an international student, you have to be careful while choosing the company. Once you have found a few companies, make sure to research them to see which one has better interest rates and fewer restrictions.

2. Compare rates: Compare the cost of auto loans for international students before finalizing your choice. You’ll be surprised by how much different companies offer in terms of monthly payments and interest rates.

3. Apply: Once you have chosen the company, fill out the application form as honestly as possible. The process may take some time, but once it’s done, your loan will be approved, and you can get your car. If you are not aware of some terms, get help from a professional. Don’t sign for anything until you understand the loan terms.

4. Wait for approval: Now that you have applied for a car loan, it’s time to wait for the company to process your application. This may take some while, so relax and don’t worry about anything else until they approve your application.

5. Get auto insurance: This is important for your car, and it’s mandatory as well (in some countries). Make sure to get auto insurance to drive safely on the road.

6. Start making repayment: Now that you are all done and received your desired loan amount, it’s time for you to create a plan and budget to start your monthly payment. This is also another important step, so take it seriously and don’t skip this.

Do I need a cosigner?

car loan for international student

It depends on the lender. Most car lenders require a cosigner if you are not a U.S. citizen. However, some companies have special programs for international students to get approved without any cosigner. If you don’t like the idea of getting a cosigner, then contact these companies and ask if they have an alternative solution for your situation. Also, when it comes to a cosigner, they must be a permanent resident of the country or have been living for two years with a stable job and regular income in the country.

Which is better, an auto loan or a personal loan?

In the case of international students, it’s better to get an auto loan rather than personal loans or student loans. Personal loans have a lot of strict repayment terms, and you’ll understand them only after reading the contract. Also, many companies don’t provide personal loans for international students, so you won’t have a lot of options to choose from. In addition, car loans are tailored to getting a car, so you’ll get a lower interest rate and better payment plans.

Do I need a credit history?

Again, it depends from company to company. Some finance companies might check your or your cosigner’s credit score, while others don’t. There isn’t any universal credit check policy, so you need to ask customer support about it before applying. But if you are signing a cosigner, there is a high chance that they will check their credit history.

Conclusion:

If you are an international student and want to buy a car, you need to apply for a car loan. Make sure to check the terms and conditions before signing for anything, and don’t be afraid to negotiate if required. The best idea would be to talk to someone experienced in this, so make sure to ask friends or relatives for help. Good luck!


You might also be interested in Canada Student Visa information.


Where to apply for a student loan?
February 4th, 2022 by Sagnik Santra

where to apply for a student loan

In recent years, not only the number of schools and colleges has increased, but also their standards have been on the rise. This means that it becomes more and more difficult for students to fund their education. After all, a college education is becoming increasingly expensive with each passing day, and living standards become higher and higher.

But, there are ways you can fund your education without sacrificing the quality of your education. There are a lot of programs such as education loans, financial aids, scholarships, and grants that allow students to pursue their college degrees without worrying about the expenses.

Every program has its own set of eligibility criteria, benefits, and drawbacks. This article will briefly touch upon education loans, how they can help you finance your higher education, and how you can apply for one. So if you are a student or parent looking for answers to your questions about student loans, you are in the right place.

What are student loans anyway?

A student loan is a type of financial aid offered by the Government or any private lending company to finance your education. The money you borrow can be used for paying fees, accommodation, course materials, living expenses, etc.

But unlike scholarships, student loans carry interest and repayment terms. You have to repay the amount within a certain period along with interest. Student loans can be a headache if you are not aware of the details. There is about $1.58 trillion outstanding student loan debt in the U.S.!

It can quickly turn into a lifetime debt if you do not repay the loan on time. So, before you apply for a student loan, make sure that you understand all the terms and conditions in detail.

Types of student loans:

There are two types of student loans: Federal Student Loans and Private Student Loans.

Federal student loans

where to apply for a student loan

Federal student loans are issued and serviced by the Government. The eligibility criteria for Federal loans are different from each other. These loans do not require a cosigner, collateral, or even certain credit scores. Federal student loans are mostly given to students who did well academically and did not get enough funds through scholarships. The interest rates are relatively low than private student loans. Also, there are four types of Federal student loans:

1. Direct Subsidized Loans: This is a need-based loan for undergraduate studies. It is given to students pursuing their first bachelor’s program or higher degree.

2. Direct Unsubsidized Loans: Direct Unsubsidized Loans are loans given to qualified undergraduate, graduate, and professional students without regard to financial need.

3. Direct PLUS Loans: Direct PLUS Loans are for graduate and professional students and parents of undergraduate students to help them pay for expenses not covered by other financial aid. Eligibility is not determined by financial need, but a credit check is required.

4. Direct Consolidation Loans: With Direct Consolidating Loans, students can save money in the long run. You may reduce your interest costs by combining your eligible federal student loans into a single loan with a single loan servicer.

Private Student Loans

Private student loans are offered by private lenders such as credit unions, banks, etc. It can be used to finance any expense related to your college education. The eligibility criteria are more or less the same as that of Federal loans. But these loans are given to students who have a cosigner and good credit scores, and some even require collateral. Private student loans usually carry higher interest rates than federal loans do. You can find out if you are eligible for a private student loan by using the comparison tool on our site.

How much can I borrow via student loans?

where to apply for a student loan

When it comes to federal student loans, undergraduate students can borrow up to $3,500 – $23,000. On the other hand, graduate students can borrow up to $138,000. There is also a yearly limit which depends on your education level and status.

As far as private student loans are concerned, the amounts you can borrow vary from lender to lender. But to give you an idea, you can usually borrow up to the total cost of your education.

How to apply for a student loan?

The application process for student loans depends on the type of loan, your lender, and your college. First, let’s take a look at the process of Federal student loans.

Federal student loans

Here are the steps to apply for federal student loans.

1. Gather the necessary documents: Here is the list of documents that you might need

  • Date of Birth Certificate
  • SSN (Social Security Number)Verification of In-State Residency
  • Official Transcripts from High School or College
  • GED certificate if you have a GED certificate for high school diploma
  • Documentation that verifies the status as an undergraduate or graduate student

2. Fill out the FAFSA form: The next step would be to fill out the Free Application for Federal Student Aid form. Even if you don’t believe you won’t qualify for the loans, it is still a good idea to complete it.

3. Check your student aid report: After you complete the form, you will receive a Student Aid Report (SAR), which summarizes your eligibility for student loans.

4. Review your financial aid letters: Your college or university will send you a letter that tells you exactly how much money you can borrow and what criteria you must meet to receive the loan.

5. Talk to your school’s office: Different schools have different rules and formalities. You should talk to your school’s office regarding any additional paperwork you might need or how they distribute the loans.

6. Receive your loan: Upon receiving your student loan, you will get an award letter that tells you how much money you can borrow.

Private Student Loans

where to apply for a student loan

When applying for private student loans, make sure to read all terms and conditions carefully.

1. Find a suitable lender: Look for lenders who offer reasonable interest rates and flexible repayment options.

2. Compare different offers: It is good to compare different offers from various lenders before applying for the loan. This will help you find out which one best suits your needs.

3. Check your eligibility: Make sure you are eligible for the loan according to your lender’s requirements. You might need a cosigner, credit history, good income, etc. Most lenders post their eligibility criteria on their official websites. So you can visit their website to get a better idea or use our private student loan eligibility checker.

4. Gather all the necessary paperwork: Just like federal student loans, you might also be required to provide some documentation. For instance, you might need a birth certificate, social security number verification, a transcript from your high school or college, and an official letter from the school regarding your enrollment status.

5. Fill out the application: After getting all the necessary documents ready, fill up their respective forms and submit them with the required documentation.

6. Wait for approval: A loan application can take anywhere from a few hours to several weeks. It all depends on your lender. Once they confirm your eligibility, you might receive the money within a few days.

Federal student loan vs. Private student loan

There is no denying that federal student loans are more beneficial than private student loans as they offer more flexibility, lower interest rates, and repayment options.

However, federal loans are also limited, and you might need to secure a private student loan as well to cover the shortfall.

The main difference between federal and private student loans is that federal loans are more flexible and manageable. Also, you might not need to pay the interest or principal during the grace period. However, private student loans lack these benefits and are more expensive than federal loans.

Things to consider before applying for a student loan

where to apply for a student loan

Student loans can be complicated if you don’t know much about them. So it is always better to prepare yourself before applying for a student loan. Here are some things that you should consider before deciding to apply for a federal or private student loan:

1. Opt for scholarship programs before applying for a student loan: If you are eligible, you should apply for the scholarship program because it can reduce your loan amount by 100%.

2. Compare different offers: It is good to compare different offers from various lenders before applying for the loan. This will help you find out which one best suits your needs.

3. Check your eligibility: Make sure you are eligible for the loan according to your lender’s requirements. You might need a cosigner, credit history, good income, etc. Most lenders post their eligibility criteria on their official websites. So you can visit their website to get a better idea.

4. Opt for federal student loans: Federal student loans are more beneficial than private ones. Before applying for a private loan, you should always consider federal student loans first.

5. Prepare for the repayment: If you have taken out a student loan, then there are you will have to repay it someday. Make sure you understand the terms and conditions of your loan so that you can manage whatever repayment is given to you promptly.

Final thoughts:

So there you have it! Student loans are one of the most useful financial tools for students. But they can be complicated if you don’t know much about them. In this article, we have provided a brief explanation of federal and private student loans. We have also offered several tips for students looking to apply for a student loan. If you have any questions, please ask us in the comments below!


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