Personal Loans for Non-Citizens, Non-Residents, & Undocumented Immigrants (2024)

Moving to a new country is a challenge in and of itself and usually means you will incur quite the cost as you establish your life in a foreign land. Just buying flights for the whole family and moving your life over to the United States might leave a dent in your savings account, or even worse, cause you to start creating a pile of debt for yourself that feels impossible to get out of.

So what should you do in this case? How can you get a loan in a new country to pay for the things necessary to start a new life abroad?

We can tell you that it is possible for you as a non-resident to take out a loan in the United States. Although it might be more difficult to get a loan as a non-citizen, it isn’t impossible.

You are able to apply for a loan for personal use, business use, to buy a home, and to pay for college.

This guide goes over how to get a loan in the United States as a non-citizen, non-resident, or undocumented immigrant to help you live out your dreams without destroying your savings or creating an immovable mountain of debt.

Can Non-U.S. Citizens Get Personal Loans?

Many banks do not offer a loan to non-citizens without a cosigner, but it is still possible with non bank lenders. There are examples, such as Stilt, which enables U.S. immigrants to get a loan even if they have no credit history or Social Security number.

Can I Get a Personal Loan as a Non-Resident?

For non-U.S. citizens looking to obtain a personal loan, it’s typical for lenders to require some form of U.S. residency status, such as a valid visa. If you fall under one of the following categories, you may be deemed eligible for a personal loan:

• Beneficiaries of the DACA program
• Individuals seeking asylum
• Holders of E-2, E-3, H-1B, J-1, L-1, or O-1 visas
• Possessors of Form I-797A or I-797B
• Those with an Individual Taxpayer Identification Number (ITIN)
• Other visa types are also eligible based on the length of the stay

Lenders are prohibited from discriminating against individuals on the basis of their nationality. Nonetheless, the criteria for loan qualification can vary among lenders.

When applying for a personal loan, be prepared to present personal details and documentation, which may include proof of residence, recent pay stubs, any available credit history, Social Security number or ITIN, driver’s license, and other relevant information. Lenders will assess these details to determine whether you meet their lending criteria. A solid financial background can significantly improve your chances of loan approval. It’s important to consistently pay bills on time and, if you have a credit card, aim to settle the full balance monthly. Demonstrating responsible debt management in this way can help to enhance your credit rating.

In situations where you lack a credit history but require a personal loan urgently, consider using records of consistent utility and rent payments to illustrate your reliability in financial commitments. Providing evidence of your dependability as a borrower can make lenders more inclined to approve a personal loan for you as a non-U.S. citizen. They are more likely to extend credit when they feel confident in your ability to repay the loan.

It is also important to note that loans are only granted to nonresidents who plan to stay and work in the United States for at least three more years after taking on the loan. If you plan to stay less time, you are likely to be denied the loan.

Can I Get a Loan as an Undocumented Immigrant?

Like non-citizens and non-residents, undocumented immigrants can get a personal loan in the United States, it is just more difficult than it is for citizens and documented immigrants.

You’ll have to provide certain paperwork (see next section) so the lender can determine if you’re eligible, including verifiable work history in the United States.

If you have no documented or verifiable employment in the U.S., it will be very difficult to get a loan as an undocumented immigrant.

General Criteria for Personal Loan Approval for Non-U.S. Citizens

When considering a non-U.S. citizen for a personal loan, lenders will not only examine your residency or visa status but will also take into account several additional factors:

• Residency Status: Your current legal status that you can use to stay in the US for the length of the loan. If your residency status is not valid, you may be declined for the loan.
• Credit History: Your past credit management is scrutinized through your credit history. Lenders look for patterns in your credit behavior, and any late payments or defaults can be worrisome, potentially signaling a risk of non-repayment. Conversely, a track record of timely payments could indicate you’re a responsible borrower.
• Credit Score: A key element in the evaluation is your credit score—a numerical summary of your creditworthiness. Within the FICO score range of 300 to 850, a score of 670 is considered good, 740 is very good, and 800 or above is regarded as exceptional.
• Use of a Co-signer: If you’re unable to meet the loan requirements independently, some lenders may permit a co-signer or co-borrower on your loan application. While not always mandatory, having a co-signer could improve your chances of securing a loan with more favorable terms.
• Proof of Income: Demonstrating that you have a stable income, whether from employment or other legitimate sources, is essential. Lenders will also evaluate your cash flow to ensure you have sufficient funds each month for loan repayment.
• Additional Personal Details: You’ll need to provide further personal information, such as your ID, proof of residence, and contact details, as part of the application process. This information helps lenders to get a comprehensive view of your eligibility.

Other Factors That Impact Loan Eligibility

Unfortunately, it can be hard to get a loan as a foreigner if you’ve only been in the U.S. for a limited amount of time since institutions are scared that you might leave the country without paying.

Furthermore, it is harder to get a loan if you have diplomatic immunity, because this means even though you live in the U.S., you are not subject to U.S. law and therefore render institutions liable if you decide not to pay back the loan.

Other factors that affect your loan eligibility as a non-citizen or undocumented immigrant include your employment, income, visa status, and future plans.

The rest of this article takes a look at what non-U.S. citizen loan lenders like to see in qualified applicants.

How Can I Get Other Credit References?

Apart from having a credit history from your home country, you should get nontraditional credit references within the United States. This type of credit will be additional help for you when trying to obtain a loan within the United States.

Examples of nontraditional references include your rental history, and any history of payments, such as utility bills (gas, electric, water, and cable TV). In addition, you can use non-payroll-deducted medical, life, auto, or renters’ insurance or school tuition.

The most important thing is showing at least three nontraditional credit references, with each verifying at least 12 months of on-time payments.

Documents Required to Apply for a Personal Loan as a Non-Citizen or Undocumented Immigrant

The following documents are necessary to get a personal loan as a non-citizen or undocumented immigrant:

• Valid visa
• Employment authorization form
• The form that declares you as authorized to work within the U.S.

Different Types of Loans for Immigrants, Non-Citizens, & Undocumented Immigrants

There are three main types of personal loans you can apply for as a nonresident, and this is true whether you’re an L-1 visa holder, on your OPT as an F-1 visa holder, or simply have a bad credit history.

1. Short-Term Loans

For a short-term loan, the repayment time is usually between three to five years. Short-term loans are used for smaller sums of money, and can also be used for a specific purpose, such as auto title loans. The minimum sum is usually $1,000, and the maximum is $2,250.

2. Installment Loans

Installment loans have to be paid back over a scheduled period with a set number of payments. This means they can last a few months or several months. It is the perfect loan to obtain when you want to improve your credit history. The maximum you can take out for these kinds of loans is usually $5,000.

3. Unsecured & Secured Loans

Unsecured loans are loans that are not backed by any of your property, meaning you have fixed terms and usually high-interest rates on repayment. This kind of loan is typically used to consolidate debt or to make home improvements. The maximum amount of this loan is $100,000.

In addition to unsecured loans, there are secured loans. Secured loans require an asset as a guarantee, such as a house or a car, to receive the loan. This provides the lender with protection so that if you are unable to repay the loan, they have the right to access your guarantee and sell it.

Student Loans for Non-Residents

How Can I Get a Student Loan as a Non-Resident?

Every year, hundreds of thousands of students dream of studying in the United States—in such places as the prestigious and renowned Ivy League schools. However, many choose not to go because they start to panic when thinking about the high cost of tuition fees and living in the U.S.

We advise you not to give up on your dream just yet because there are options that can help you afford an education in the U.S. Nonresident students in the U.S. are eligible to apply for student loans (and yes, there are personal loans for F-1 visa holders as well!).

This is usually because lenders know you are young and probably haven’t built up your credit history yet. Therefore, you don’t need to show your credit history, but you usually do need to have a cosigner to legally sign the loan papers for you.

There are some international student loans that don’t require a cosigner available—you just may pay a higher interest rate than if you did have a cosigner.

Requirements to Be a Cosigner for a Student Loan in the U.S.

To be a cosigner, the following requirements have to be met:

• Proof of U.S. citizenship or lawful permanent residency
• Good credit history
• Income history
• Proof of having lived in the U.S. for at least 2 years

Mortgages for Nonresidents

How Can I Finance a New Home in the United States as a Non-Resident?

The most important thing for people coming to live in the US is to own their own home in the country. Most U.S. immigrants come to the country to live the American dream, and a part of that dream is to purchase a house or an apartment and provide shelter for their family. Although it is very difficult for a nonresident to finance a home loan or a mortgage, it is not impossible.

Whether or not you can apply for a loan to pay for your house depends solely on your residency status. You are allowed to apply for a home loan as a permanent resident with a valid green card (Form I-551) and as a nonpermanent resident with a valid work visa.

How Can I Apply for a Mortgage as a Non-Resident?

Apart from being a permanent resident with a valid green card or a nonpermanent resident with a valid work visa, you need to provide documentation to be able to apply for a mortgage loan.

Documentation Necessary to Apply for a Mortgage as a Non-Resident

• A valid work visa—E1, E2, H1B, H2A, H2B, H3, L1, or G1–G4 visas
• A valid Social Security number
• Employment authorization documentation
• Proof of employment history
• A credit history
• Proof of income

This documentation is needed to show the lender you can repay the loan you are requesting.

3 Ways to Get Loans Without an SSN

Undoubtedly, securing a loan without a Social Security Number (SSN) is tough. Most banks prefer providing loans to U.S. citizens over non-U.S. residents, no matter how high their credit score is.

Starting your own business, buying a home, owning a car, or fueling similar expenses is difficult without a loan, and obtaining a loan is difficult without an SSN.

But do not give up yet. Here are three ways you will be able to get a loan without an SSN.

Get a Cosigner

Various loan providers allow you to add a cosigner to your application if you don’t have an SSN. The cosigner acts as a guarantor for the debt and ensures that the money borrowed will be returned with all the levied interest payments. This reduces the risk that a loan provider must handle the missing payments themselves.

A cosigner may be your friend or a relative—who ideally has a good credit history and must be able to cover the payments in case of any unforeseen events.

Find Lenders Who Will Accept an ITIN Number

The majority of loan providers ask for an SSN; however, there are various reputed financial institutions including banks that are willing to accept alternative means of identification. One such common type of identification is an ITIN Number which is also known as an Individual Taxpayer Identification Number. This number is issued by the IRS to all resident and non-resident immigrants.

This number assures the lender that the borrower is a taxpayer and is capable of returning the borrowed amount.

Borrowing From Lenders Designed for Immigrants

As the rate of immigration grows at a rapid pace, various companies have emerged in the market which are tailored especially for immigrants. These companies do not ask for a high credit score, and might not even require a cosigner. This increases your chances of securing a loan even when you don’t have an SSN.

Personal Loans With an ITIN Number

Thankfully, immigrants living in the U.S. without an SSN no longer need to restrict themselves from using banking and financial services. The changing laws. .have made it easier for them to open bank accounts, build their credit score, and secure loans. This is all thanks to an ITIN.

According to U.S. laws, foreigners, non-resident aliens, their spouses, and other dependents can apply for an ITIN as soon as they are eligible to pay federal taxes.

If you are a non-resident living in the U.S. and do not have an SSN or ITIN, it is highly recommended to get the ITN as soon as possible. When compared to the SSN, it is quite simple to apply for an ITIN. Obtaining an ITIN can help you in an array of ways—build your credit score, pay taxes, get a U.S. driver’s license, secure a loan, and so on.

Here is how you can get an ITIN number:

• Fill out an application to get an ITIN, which is basically the Form W7.
• Provide all the relevant documents like a driver’s license, school records, medical records, and other documents supported by the IRS along with the application.
• Don’t forget to include your tax return so that both of these documents can be processed at the same time.
• Send all these documents to an IRS office.
• You will have your ITIN within four to six weeks.

Personal Loan Interest Rates in the U.S.

Average personal loan interest rates in the U.S. are have been between 10.30% and 32.00% in 2021. Your rates will depend on your credit score, the duration of the loan, the amount you want to borrow, and the policies of the lender.

Although you can find competitive rates from credit unions and banks, various online lenders offer the lowest rates, especially to creditworthy borrowers. What’s more, not only can online lenders offer the best rates, but they can also provide you with a loan even when your credit score is low, even as low as 580.

Talking about the average personal loan interest rates by lenders, the interest rates offered by Avant in 2021 was 9.95% – 35.99%. LendingClub was another lender whose interest rates varied greatly — between 8.05% and 35.89%. OneMain Financial was a bit on the higher side, somewhere in the range of 18.00% – 35.99%.

All these rates are a bit on the higher side which might leave you wondering what is considered a good interest rate on a personal loan? Well, there is no one-fit answer to this question.

Personal loan interest rates vary depending on a range of factors like the intended use of the loan, its terms, and the balance. Generally, the eligibility criteria set by lenders for securing the best rates are tough and it might be tough to qualify for them. On average, you should aim for an interest rate between 10.30% and 32.00%, or better, in 2022

The best practice here is to try your luck with multiple lenders and compare the rates offered by them along with other benefits. If the proposed interest rate still seems too high, you can explore alternate options, or work on the major factors that impact the rate like employment status, credit score, credit history, debt-to-income ratio, and so on.

General Loan Information

Which Loan Payment Option Should You Choose?

Depending on the loan, different payment options are available to pay back the loan. Apart from the payment options, you also have to take into consideration the interest rates and the fees associated with loans.

Make sure to evaluate everything and to read all of the contracts carefully before you decide to obtain the loan. Also, make sure to shop around for different lenders and not take the first offer! Sometimes you’ll find there are better offers out there than what you first find.

What Do I Do After Applying for a Loan?

You have applied for your loan as a nonresident and now all that is left to do is wait for the authorization.

It can take up to 48 hours for you to receive a loan approval confirmation—it all depends on the individual institution. Once your loan is accepted and you receive the money, make sure to stay on top of your repayments. So you don’t forget your monthly payments, we recommend setting up automatic online bank payments. Doing this will help you stay on top of payments without having to worry about it each month!

Please make sure to contact your lender beforehand if you won’t be able to make a payment on time so you can discuss the repayment options available to you.

Be as responsible as possible with your loan repayments—it is the key to your success in paying off the debt. We wish you the best of luck in receiving your loan in the United States and hope you are able to live your own American dream!

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