It can be challenging to qualify for a personal loan for any consumer. Non-United States citizens can often have a hard time obtaining this lending option but permanent residents with Social Security numbers have more chances.
Crediting companies have strict demands and eligibility criteria in terms of citizenship. As well while some lenders might accept non-citizens depending on their documents and details of their immigration.
Here is how non-U.S. citizens may get a personal loan or qualify for low-cost alternatives.
Are Non-U.S. Citizens Eligible for a Personal Loan?
Eligibility requirements vary among finance-related service providers. Some banking institutions have strict demands and accept only American citizens, while other alternative places may have more flexible terms.
A non-U.S. citizen has a chance to get approved for a personal loan as well but it will be more challenging than if they were citizens. We all may come across unforeseen situations in our lives that we need money now to survive until the next paycheck. In fact, personal loans accounted for $192 billion in consumer debt in the second quarter of 2022, a $46 billion increase from the first quarter, according to credit reporting agency TransUnion. Some crediting institutions consider non-residents and non-citizens high-risk applicants. Two factors affect their decision: a prospective lack of credit and the duration of their stay in the country.
Non-citizens may not have a sufficient credit history necessary to define their creditworthiness so lenders face higher risks of default and aren’t willing to deal with such borrowers. They prefer consumers with established credit who are at least permanent residents.
Moreover, crediting companies may have another concern that the borrower can leave the country before the repayment term ends. This period may be from several months to seven years so it’s a rather long time to repay the debt.
If it isn’t returned in full and the borrower leaves the country, the lender won’t be able to get their money back. Besides, non-citizens need to build their credit and have a decent credit rating before they apply for a loan.
Getting a Personal Loan as a Non-Citizen
Green card holders and lawful permanent residents have more chances of getting approved for a loan these days. They can demonstrate long-term status in the USA, have an established credit history, and may show their Social Security number. So, lenders prefer to deal with such consumers.
Some crediting companies also accept an Individual Taxpayer Identification Number, or ITIN, rather than a Social Security number, but this is a rare occasion so you need to check the details and requirements at a particular lending partner. Some service providers also agree to issue the loan if you have a valid visa to prove that you will stay in the country during the repayment term.
How to Apply for a Loan as a Non-Citizen
This is a straightforward and streamlined process. Every consumer may apply for a personal loan on the web these days. The digital application is convenient and easy for everyone. The following criteria should be met if you are willing to obtain additional financial assistance:
- Be over 18 years old;
- Provide a U.S.-based address;
- Show proof of identity with a government-issued ID;
- List contact details like your email address and phone number;
- Provide proof of employment and regular income.
Bear in mind that almost every web request for a personal loan will demand ITIN or SSN to verify your credit. Certain lenders and service providers may accept low credit borrowers (whose credit is below 629 on the FICO scale), while most crediting companies will require good credit (higher than 690 on the FICO scale) for application. Also, your credit history should be at least two or three years to get approved.
Alternative Options for Non-Citizens
People and non-citizens, who can’t provide the mentioned information and documents, may still require financial aid. What can you do if you can’t wait until your credit history is established? What if you urgently need some cash and can’t wait when your rating will get improved? Are there any options? Yes, there are alternative solutions. Here is what you may take into consideration:
Payday loans. These are short-term lending options when a client obtains the desired sum for a couple of weeks. This loan is suitable for covering any unpredicted expenditures and bills. Provided that you have a stable income source, you may qualify for additional cash till the next salary day. The interest rates are higher compared to regular personal loans but alternative lenders are more flexible and approve the requests from borrowers with bad or no credit as well.
Stilt loans. Underserved communities and immigrants can be offered personal loans by Stilt. This company considers other eligibility criteria apart from the credit rating of the borrower. It doesn’t demand having a Social Security number to apply for a loan. This company issues financial assistance to people with F-1, O-1, H-1B, TN, L-1, and G-1 visas and non-citizens. Asylum seekers, refugees, as well as DACA recipients may also apply here.
Loans from credit unions. There are specialized loans available from the local credit unions. Such lending tools are designed for non-citizens who can’t qualify for regular loans. These options can cover expenses related to the loan request, renewal fees, and filing. Sometimes they are called dreamer loans, citizenship loans, or immigration loans. Some credit unions provide ITIN loans as well. However, pay attention to a demand to become a member of a certain credit union before you can apply.
Lending circles. These are the communities or groups that pool their resources to offer no-interest loans if a particular member of the circle requires monetary aid. Your community may already have such circles. If you don’t know where to turn, you may apply with Mission Asset Fund. This fund will match you with a local crediting group of six to 12 people. The borrowers may obtain between $300 and $2,400.
The Bottom Line
All in all, non-U.S. citizens may try to apply for a common personal loan if they already have an established credit history, have a regular source of income and can provide their Social Security number. If they can’t qualify, they may turn to alternative crediting options and seek additional funding in lending circles, or local credit unions.