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International Student
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Auto Loans

As an international student studying in the US, buying a car is something you might consider, especially if you don’t go to school in a big city with easy access to public transportation. To help finance a car purchase, many people in the US take out an auto loan. If you’re considering an auto loan, you need to make sure that you are informed about the loan processes, and that you are able to borrow the funds responsibly.

There are two main loan options when it comes to funding a car:
  1. personal loans, which can be used for just about anything,
  2. and auto loans, which are made specifically for people looking to finance a car.

International students are eligible for many loans in the United States, but some lenders will not lend to non-U.S. citizens. When looking for a personal or car loan in the US, you will need to dedicate time researching lenders that lend to international students.

Typically, you will be evaluated for your personal loan eligibility based on your credit score. Users with a low credit score or without credit history will be subject to higher rates than users with a high credit score or a long credit history. As a non-US Citizen or resident, there are a few common documents you’ll need in order to apply for any personal loan. Whichever lender you end up using will walk you through the process and confirm exactly which documents are required, but for the most part you will usually need:

  • A finance qualification form, which provides information about your employment, living, and financial situation
  • A Visa
  • A letter from your employer (if applicable)
  • Payment documents, such as copies of your utilities, rent, and phone bill
  • Proof of lawful residence

However, as an international student, there are other options available; some of which could save you a lot of money compared to a personal loan. Auto loans, for example, are loans given specifically for financing vehicles. For this reason, if you are planning to take out a personal loan, and use most or all of the money to finance a car, you may want to consider an auto loan instead. If you do some research, you’ll find there are services for international students looking to get an auto loan out there, and many of these companies take into account academic information such as your GPA and enrollment status, financial information, and personal information when evaluating if you’re eligible to apply for an auto loan.

Although it can be tempting to purchase a new, expensive car, like with any loan, it’s important you stick to your budget and only apply for what you can realistically afford.

When comparing loans, there are a few things you’ll need to know to get started.

The first is to make sure you look at the APR, or annual percentage rate. The APR is the interest rate plus all additional fees, and basically functions as a way to calculate the total cost you should use to compare your loan options. Calculating APR is a tricky process, and there are a number of sites out there where you can input details about your desired loan and find out a good estimate of what your APR might be, but always make sure you check with your lender, and compare the answer you get with other options, before taking out your loan.
Fixed vs. Variable
A fixed-rate loan means the interest rate won’t change over the loan term, and you’ll be paying back the loan in equal installments every month, a variable-rate installment loan means the interest rate and APR can change, along with your monthly installment payments. A variable interest rate will increase or decrease depending on the market or with the underlying benchmark rate.
Repayment Term
Something to consider is the repayment term of your loan. This, in combination with the above items, will determine how much you owe monthly, and can make a huge difference; some loans may be too big for you to pay back in the given time.

These are just a few items to consider before taking out a personal or auto loan; as it's a large commitment. It's important to research your options, and find the best option for you.

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