Personal Loans For Non-US Citizens
Strict minimum credit score requirements, hard credit checks, and income verifications make taking personal loans unavailable for many American borrowers. However, the situation of expats in the USA is even more problematic. They usually face more limitations and restrictions varying from a lender to a lender. However, many financial institutions still have personal loans for non-US citizens.
Non-U.S. citizens can apply for personal loans in the country. Lenders can’t discriminate against you based on your national origin. Expats in the USA can borrow money from a bank, credit union, or an online lender if they meet the lender’s requirements.
Getting a personal loan is much easier for permanent residents, so-called green card holders. They are considered less risky borrowers, as unlike other immigrants, they can show a lender a long-term status in the country and provide a Social Security Number (SSN) and Individual Taxpayer Identification Number (ITIN).
Many lenders fear providing money to expats without SSNs and ITINs, who may leave the country without returning the debt. Financial institutions may ask you for your visa to ensure it is valid longer than the repayment terms. As a rule, you can apply for a personal loan as a non-U.S. citizen with the following types of visa: E-2, E-3, H-1B. J-1, L-1, and O-1 visa.
Non-U.S. citizens usually have a low credit score or don’t have it at all, which disqualifies them from many personal loan options. While guaranteed payday loans are available only for U.S. citizens, an expert from 15M Finance asked the most popular immigrants’ questions and offered solutions in the article. You should shop around, as multiple lenders have lower requirements for the borrower’s residency status and can approve you with just a valid visa.
Although all the lenders have different criteria for borrowers, to get loan approval, you typically need to meet the following eligibility requirements:
- Be at least 18 years of age;
- Have proof of identity (ID);
- Have a bank account;
- Have an address in the USA;
- Have a phone number and email address;
- Have proof of income and employment;
In many cases, you will also be asked for a SSN or ITIN to perform a credit check. Many lenders have strict minimum credit score requirements and require good credit from borrowers and much credit history of at least two years. However, you can still get approved with a low or fair credit score, as many providers offer bad credit loans for U.S. citizens and foreigners. Unlike traditional personal loans, these borrowing options require a soft credit pull instead of a hard credit check. It will not hurt your credit and allow you to get approved if you have sufficient income.
Lawful immigrants in the U.S., such as permanent residents and visa holders, can get personal loans in the country. To borrow extra cash as a non-U.S. citizen, you need to take the following steps:
Many lenders will want to check your credit report to decide whether you are a reliable borrower. They will pay attention to your credit score, credit history, debt-to-income (DTI) ratio, and other factors. Various lenders have different credit requirements, but the higher your credit score, the higher your approval chance. The problem is that many non-U.S. citizens don’t have a credit history.
All the lenders require different documentation, but in most cases, you need to prepare the following:
- Your identification (driver’s license or ID card);
- Copy of your passport;
- Personal details (address, phone number, email address, SSN, ITIN);
- Employment authorization or employment with proof of stable monthly income (pay stubs, tax returns, W-2s);
- Education information;
- Copy of your visa (for visa holders), green card (for permanent residents), or any other proof of resident status.
Find a Cosigner
If you don’t meet the lender’s minimum credit score or income requirements, applying with a cosigner may be a good idea. If you have friends or family members in the USA with good or excellent credit, they may have a desire to help you. Borrowing with a U.S. citizen means lower risk for the lender, so you will be more likely to get approved at better terms.
The best way to ensure you meet the lender’s eligibility requirements is to pre-qualify for a loan on the provider’s website. Prequalification does not impact your credit score, so you can prequalify with as many lenders as you need.
Comparing several lenders will help you to find a personal loan with the best conditions. Pay attention to such factors as repayment terms, interest rates, available loan amounts, and minimum credit score requirements. Ensure the lender operates legally in your state to avoid unaffordable interest charges and fraud.
Submitting a loan application form is your last step in the loan process. You need to provide a lender with the required documentation and send the form.
Multiple lenders can offer numerous personal loan options. All providers have different eligibility requirements, loan amounts available, terms, and rates. Lenders typically offer personal loans with inconvenient conditions and often unaffordable charges if you are a non-U.S. citizen. To avoid high-cost loans, pay attention to the following factors when comparing lenders:
Interest rate and annual percentage rate (APR)
Nobody wants to overpay for a loan. APRs can significantly affect your total loan cost, so it is crucial to find the cheapest option with the lowest APR.
In addition to the loan amount and interest, financial institutions often require extra fees. An origination fee, late fee, prepayment penalty, and other fees can increase your debt. Consider this factor to be able to make on-time payments.
As a rule, repayment terms range from two to seven years, depending on the lender. If you are a permanent resident or a visa holder, getting convenient terms may be more challenging.
Determine your monthly payment with a personal loan calculator. It will help you ensure you can afford these payments. Many providers offer automatic payments that allow you to avoid late fees.
Before getting a loan from the specific company, read other customers’ reviews. Many people share their experiences after working with a company. They can protect you from unreliable providers.
Even if you find a lender performing a soft credit pull instead of a hard credit inquiry to borrow a personal loan, you need to think about building your credit in any case. You will need good credit not only to get approved for loans at favorable terms but also to get credit cards, rent apartments, and even find jobs.
Building your credit in the USA requires much time. However, you can start with the following simple steps:
- Become a credit card-authorized user;
- Apply for a secured credit card;
- Take a credit-builder loan.
Alternatives to Personal Loans for Non-U.S. Citizens
If a personal loan is not an option for you, pay attention to alternatives for non-U.S. citizens.
As a non-U.S. citizen, you can apply for immigration loans (dreamer loans, DACA loans) from a local credit union. Loans from credit unions typically come with lower interest rates than other borrowing options. Credit unions also allow applicants to apply with an ITIN instead of a Social Security Number.
Consider asking your boss for a paycheck advance to cover your unexpected expenses. Although all the bosses are different, your employer may be an understanding person who will want to help you.#
Withdrawing money from a credit card is one of the most popular borrowing options in the USA. Non-U.S. citizens may face problems with getting credit cards in the country. Therefore, consider a secured credit card to borrow cash and start building a credit score.
If you have an emergency, such as a high medical bill or a car repair, local community organizations may help you. Reach for such institutions in your region and check your financing options.
Asking your family members or friends for financial support is the cheapest and safest way for non-U.S. citizens to get the necessary loan amount. Your close people will not likely require you to pay an interest rate, origination fee, and other extra charges.
You can still get a personal loan in the USA, even if you are not a country’s citizen. Some lenders can reject you due to the lack of ITIN or SSN, but continue shopping around, as many providers have lower eligibility requirements and accept foreigners. To apply for larger loan amounts, you may need to use the help of a cosigner. Even if you don’t have an American-based credit report, lenders may approve you after checking your cash flow.
It depends on a specific financial institution. While some providers offer pre-qualification only for American citizens, other lenders agree to work with foreigners. Comparing different lending companies will help you find an institution that will enable prequalification for you.
Yes, you can get a personal loan with a cosigner or co-borrower from a lender offering joint loans. Applying with a U.S. citizen with a good credit score can significantly increase your approval chance for the necessary personal loan amounts at a low-interest rate.
Many providers require an SSN from borrowers, but you can still find a lender that offers personal loans without it. Multiple financial institutions may accept an ITIN (individual tax identification number) instead of a Social Security number.