Understanding U.S. Cosigners
Studying in the United States as an international student can be an extremely daunting concept. A likely reason why is because of the process of applying for and receiving an international student loan. There are many different parts to understanding international student loans and everything they encompass (International Student Loan Basics). One of the many parts to understanding the international student loan process is the concept of cosigners. Especially for international students, who likely have little to no credit history in the United States, cosigners could be a major requirement for securing an international student loan. Below, we will give a general rundown of what a cosigner is related to international student loans.
What is a Cosigner?
When thinking about international student loans, one basic way to help understand the concept is like this: the lender is essentially taking on risk by granting you a loan. Think of it as if they are renting you money. They are giving you an amount of money that theoretically, you agree to pay back at a later time, which can be years from the date that the lender grants you the loan. The lender, therefore, takes on the “risk” that you are unable to fully repay the loan. One way that some lenders may try to reduce this “risk” is by requiring a cosigner. A cosigner is a person who signs the loan with you, so that if you cannot pay the loan back, the responsibility of repayment falls onto the cosigner.
Lenders may require cosigners more with international student loans. Having a cosigner that a lender determines is creditworthy, however, may help you get accepted for a loan. A cosigner can possibly improve the chances of an international student getting approved for an international student loan. However, it should be noted that having a cosigner does not guarantee that a student will get a loan.
What Should an International Student Look For in a Cosigner?
Typically, international students turn to family or close family friends to be their cosigner. The cosigner does not need to be a family member or friend, and some international students will find other sources to be a cosigner. Whether a cosigner is considered creditworthy and is accepted will depend on many factors contingent upon each lender’s loan program. Some lenders may have citizenship requirements of the cosigner, for instance, a U.S. lender may require that the cosigner is a U.S. citizen or permanent resident (green card holder). Check with your prospective lender to see what their requirements may be
Besides any requirements the lender might have, there are some more general qualities that you should look for in a potential international student loan cosigner. Lenders will generally require that the cosigner shows some form of stable income as well as have a good credit history.
Namely, they may look at the cosigner’s past ability to pay or pay off expenses, like a mortgage or other type of loan. In harmony with this, the lender may look at the cosigner’s total income matched up against their total debts.
This is not an exhaustive list of qualities to look for by any means. Again, we suggest checking with your prospective lender to see if they have any additional requirements for cosigners, and then do some of your own research to come up with an idea of who might be a good cosigner for you.
What if I Can’t Find a Cosigner?
If you can’t find a cosigner and your lender requires one, don’t fret. There are ways to find cosigners that you do not have a close relationship with. You simply need to get creative! One common way that we suggest that may help you find a cosigner is to reach out to the alumni network of your potential school and/or program. Find some alumni to reach out to and network with, and let them get to know you. This could be a potential way to find a cosigner for your international student loan. However, please note that this is by no means the only way, it is merely a suggestion. Again, we suggest doing some of your own research and coming up with your own creative ways to finding a cosigner.
When It’s All Said and Done, Do I Need a Cosigner?
Unfortunately, there is no clear yes or no answer to this question. It all depends. Mainly, it depends on if the prospective international student loan program requires a cosigner from you based on many factors. As stated before, having a cosigner may open up more options for you but does not guarantee that you will receive a loan from a prospective lender.
Nomad Credit Can Help You Find Education Loan Options
Understanding student loans (also known as education loans) can be tough, but getting an international student loan can be even tougher. Nomad Credit is happy to help you navigate the difficult process and help you search for student loan options.
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