Can Non-U.S. Citizens Get a Personal Loan?

Can Non-U.S. Citizens Get a Personal Loan?

Moving to a new country is equal parts exciting and scary. Getting adjusted and putting your finances in order can take time. But if your new home needs repairs, you want to make a large purchase or you need to pay for a medical procedure, you may wonder if a personal loan is an option. As a noncitizen, you can get a personal loan—there is no restriction against doing so—as long as you can find a lender who will work with you and your situation.

You may be able to get a loan from a bank, credit union or online lender. Approval can often depend on several factors, including your credit score, credit history and usage, loan amount, outstanding debt and monthly income.

To determine your ability to repay your loan, lenders can also ask about your immigration and residency status. But they can not discriminate because of your national origin. Lenders might look at factors such as lawful permanent residency—if you are a green card holder—when determining your eligibility for a loan. They also might check for a valid visa that extends for the entire term of the loan or will be renewed.

Lenders differ in their requirements, but may require some or all of the following:

• Be a resident alien—a foreign-born U.S. resident who is not an American citizen—or a permanent or non-permanent U.S. resident, including an asylum seeker or Deferred Action for Childhood Arrivals (DACA) recipient.
• Hold an eligible visa, such as E-2, E-3, H-1B, J-1, L-1 or O-1.
• Have a U.S. Social Security number, a verifiable mailing address and a valid government-issued photo ID
• Have a qualifying credit score.
• Hold a stable job.
• Show a history of being responsible financially.

Work on Establishing Credit Before You Apply

If you've recently moved to the U.S., you may not have a U.S.-based credit report or credit score. That can make it difficult to get approved for loans or other types of credit. Fortunately, you may find a lender that does not require a credit score, and instead uses an international credit report to evaluate your credit history. Some lenders also use non-traditional methods to assess your creditworthiness, such as on-time rent, cellphone or cable TV payments.

Even if you find a lender that doesn't require a credit report from one of the U.S. consumer credit bureaus (Experian, TransUnion or Equifax), it's important to begin building credit in the U.S. as soon as possible. Not only can this help you get a personal loan, but also other types of loans, credit cards, an apartment and potentially even a job.

A few ways to build credit if you're new to the U.S. include the following:

• Become a credit card authorized user.
• Open a secured credit card.
• Get a credit-builder loan.
• Talk to your employer about getting access to financial services.

Building strong credit can take time, but using one of these methods or getting approved for a personal loan and ensuring you make all your payments in full and on time is a good way to start.

How to Apply for a Loan as a Noncitizen

When applying for a personal loan as a noncitizen, take these steps.

Shop Around for a Lender

Not all lenders provide personal loans to noncitizens. Online personal loan lenders and platforms may be more willing to consider your loan application than conventional banks or credit unions, but each lender will have its own loan criteria. Shopping around for a lender that meets your particular needs and circumstances is important.

Gather the Necessary Documentation

Although the documentation lenders require can vary, you can expect to need some or all of the following:

• One or more forms of identification, such as a driver's license or ID card.
• Copy of your passport.
• Employment and proof of income, including pay stubs, W-2s, tax returns and employer contact information. Alternatively, you may be able to provide employment authorization, which may include an I-765 Application for Employment Authorization form.
• Personal information, including verifiable address, phone number and email address, Social Security number, or Individual Taxpayer Identification Number (ITIN).
• Education information, including your highest level of education and any degree earned, plus GPA.
• A copy of your visa (including E1, E2, H1B, H2A, H2B, H3, L1, G series or 0-1), green card or proof of resident status, and possibly an I-94 Arrival/Departure Record.
• Loan amount and your expected use for the funds.

Get Prequalified

Before getting a loan, consider getting prequalified to see if you meet a lender's eligibility requirements. Prequalification generally includes a short application and a soft credit check, which won't affect your credit score (assuming you have a credit report). Getting prequalified doesn't guarantee you'll get the loan, however; lenders will want to verify your information before final approval.

Find a Cosigner

Some lenders require or may accept a cosigner—a close friend or family member—for a personal loan. If a lender requires you to have a cosigner, it may be for a number of reasons, including you don't have a sufficient credit history or you don't earn enough income to qualify on your own.

Having a cosigner might increase your chances for approval because it lowers the risk for the lender. However, your cosigner will likely need a good credit score, be a U.S. citizen or have lived in the U.S. for at least two years. Or, if you plan to use the funds with another person, you may have the choice to use a co-borrower instead.

Alternatives to Personal Loans

If you can't find a personal loan that meets your needs, you might also consider applying for a credit card or salary advance from your employer, or getting a temporary gig on the side to help you bring in more income. Other options include:

Stilt loans: As an immigrant, you may qualify for a personal loan with Stilt—an online lender that specializes in lending to immigrants and underserved populations. You don't need a Social Security number to apply, and although your credit score is considered, Stilt will also consider people with limited or zero credit history. You will need a valid U.S. visa and an international passport. Stilt also considers DACA recipients, asylum seekers and refugees who want to start building a credit history in the U.S.

Loans from credit unions: It's possible to find a local credit union that offers loans specifically for noncitizens. These loans may have different names, such as dreamer loans, immigration loans, DACA loans or citizen loans. Loan amounts and terms vary, but interest rates can be lower than with many credit cards. You may also be able to apply for one of these loans using an ITIN instead of a Social Security number. However, you will need to become a credit union member before applying.

One Percent for America loans: One Percent for America loans are not specifically personal loans to pay for an expense. Instead, these 1% interest loans fund your DACA, citizenship, green card or Temporary Protected Status (TPS) application. Loans come with flexible payments, no hidden or late fees and no credit requirements. To apply, you will need to provide your name, address, email, checking account information and Social Security or ITIN number.

Family or friends: If you have difficulty qualifying for a personal loan from a bank, credit union or online lender, consider reaching out to family or a close friend. Getting a loan from someone close to you might offer a lower interest rate, or require no interest charges whatsoever. Family members are also unlikely to charge fees that lenders sometimes charge.

As good as that sounds, if you don't repay the loan and the agreement is broken, you risk putting a strain on your relationship. Also, family loans aren't reported to the credit bureaus, which eliminates the opportunity to improve your credit, which can help you qualify for a loan in the future.

The Bottom Line

As a non-U.S. citizen, getting the money you need to fund a large expense, consolidate high-interest debt or pay a medical bill can be challenging. Even if you find a lender willing to work with you, they may place strict minimum requirements on the loan. But with a little work on your end, it is possible to find a lender willing to work with you.

While getting a personal loan shouldn't be done on a whim, don't be tempted by high-cost loans like payday loans that could trap you in a cycle of debt. Instead, review your finances, work to establish or improve your credit, and compare personal loan offers on Experian CreditMatch™ to find the right choice for you.