Refinancing your international student loan can be a lengthy process because each lender offers its own unique terms. We’ve evaluated the best refinancing options based on rates, terms, process, fees, and overall quality.
First Tech Federal Credit Union provides competitive rates, but you'll require a membership to receive those benefits. To become a member, you'll have to meet some strict requirements.
UNDERGRADUATE LOANS: Fixed rates from 3.47% to 12.55% annual percentage rate ("APR") (with autopay), variable rates from 2.26% to 13.54 % APR (with autopay). GRADUATE LOANS: Fixed rates from 4.60% to 12.55% APR (with autopay), variable rates from 2.96% to 13.54% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 13.05% APR (with autopay), variable rates from 2.06% to 14.04% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 06/08/2022.
Is international student loan refinancing worth it?
International students are eligible to refinance their student loan under the Federal Direct Loan Program. However, unlike domestic students, international students cannot take advantage of some of the benefits available, such as income-driven repayment plans and Public Service Loan Forgiveness (PSLF).
That said, there are several reasons why international students should consider refinancing their loans:
Exemption from paying taxes: If you’re an international student who has lived in the U.S. for at least six months and paid taxes on income earned here, you may be eligible to claim an exemption from paying taxes on your loan payments if they’re considered “qualified.” Qualified payments include those made under a Pay As You Earn or Income-Based Repayment plan.
Make lower monthly payments: You can reduce the amount you have to pay each month by extending the life of the loan and reducing its interest rate through refinancing. This can help pay off your debt faster so that you’re not paying off debt and additional interest in the long run.
Build your U.S. credit history: As a foreign national, you don’t have much of a credit history in the U.S., which can make it challenging to get approved for loans. But if you have a U.S. based co-signer, you can use that person’s credit history to build on your own. And once you start paying off your loan and using other credit products, like credit cards and mortgages, your score will improve more.
Qualify for student loan repayment assistance: If you qualify for income-driven repayment or public service forgiveness programs, it may be easier to access these programs if all of your federal loans are consolidated into one new private loan.
Release a co-signer or collateral from your loan: If you have a co-signer on your federal loan, it may be easier to release that person from the loan by consolidating it into one new private loan.
Do you qualify for international student loan refinancing?
If you are looking to refinance your international student loan but are unsure if you qualify, consider the following requirements:
Have a solid credit score: One of the first things lenders look at when they review your application is your credit score. Lenders often require noncitizens to have built up U.S. credit history. So if you have a poor credit score, it can be challenging to qualify for a refinance loan. To increase your chances of getting approved, ensure you have a good history of making payments on time and keeping your debt minimal.
Have a good debt-to-income ratio: Lenders want to ensure that you have a sufficient amount of funds left over after paying your monthly bills so you can make payments on time and avoid delinquency. This is known as debt-to-income ratio (DTI). If you can show that you can afford the new monthly payment after refinancing, it increases your chances of qualifying for the loan.
Be a U.S. citizen or permanent resident: If you’re not a U.S. citizen or permanent resident, it will be harder for you to get approved for refinancing. To qualify, lenders need proof that you are authorized to work in the U.S. This means that if you don’t have a Social Security number yet, then it’s unlikely that you’ll be approved for refinancing without a co-signer.
Have employment: Lenders also want to see evidence of a steady income before approving a student loan refinance application. To show proof of employment, you can provide an income verification letter from your employer, tax returns as proof of employment income, or you can submit bank statements that show regular deposits from the employer.
What to do if you’re not eligible to refinance for an international student loan?
If you find that you do not qualify for refinancing or a lender is not willing to work with your current situation, consider some of the following options below:
Speak with your current lender about payment options: In some circumstances, your lender may be able to offer alternate payment options such as modification to your current plan if you’re struggling to make payments. Private lenders typically offer forbearance, which can temporarily pause or lower your payments. Ask your lender what can be done in your specific situation if refinancing is out of the equation.
Find a U.S. citizen co-signer: If you are not eligible for refinancing on your own, consider a U.S. citizen co-signer with a strong financial profile. A family member or friend with a good credit score, a sufficient income, and overall good history of making payments in a timely manner will increase your chances of being approved for refinancing.
Reapply when you have a stronger profile: If you can wait to refinance at a later time, focus on building up your U.S. credit history, obtaining a work visa, establishing permanent resident status, and maintaining a full-time job. Once you’ve proven that your financial profile is in good standing, your chances of being approved for refinancing will be greater too.
How to choose the best international student loan refinancing option
Choosing the best international student loan refinancing option can be a difficult process. There are many factors to consider, such as the interest rate, fees, and repayment terms. Here are some tips to help you choose the most suitable option for your needs:
Compare multiple lenders to find the lowest interest rate: The first step is comparing multiple lenders who offer international student loan refinancing options. You can do this by searching online or through sites that specialize in helping people refinance their student loans.
Look for lenders that offer fixed or variable interest rates: Once you have found some potential lenders, you’ll want to compare each one’s interest rates and fees. This will help you understand what kind of deal you’re getting before signing up for anything. Fixed-rate loans are better if you plan to keep your loan for several years because they give borrowers certainty about how much they will pay over time — no surprises from rate increases or variable rates!
Understand the process: Some international loan programs take longer than others to process and approve your application. So make sure you know how long each process takes before committing yourself to one program or another, or else you might have to wait longer than expected.
