4 Reasons Why US Banks Don’t Often Lend to non-US Citizens


The United States is host to some of the world’s great universities. Every year, hundreds of thousands of international students head to America to receive a higher education. But while the United States offers top-tier schooling, it comes with a hefty price tag. The rapid growth in tuition costs is a well-known issue. The cost to attend a public or private university has risen well above the rate of inflation over the past few decades. The average annual price to attend a US university now ranges in the several tens of thousands of dollars.

Many students see this price tag and wonder if it’s worth attending an American university at all. The idea of borrowing a large sum of money before beginning a career is not easy to accept. The problem becomes even worse for international students. Banks need to make money in order to survive. When it comes to loans, there is a multitude of risks. For this reason, US banks are often hesitant to lend money to foreigners. To help understand why we’ve collected the top four reasons why US banks don’t often lend to non-US citizens.

1. Non-US Citizens Have No Credit History

The United States banking system is complicated and heavily regulated, in most cases. Part of this system includes a detailed consumer credit score. Each citizen of the United States is assigned a number which represents the creditworthiness of that citizen. A low credit score indicates a lack of ability to pay off a loan and therefore heightened risk for a bank. Over time, people can build more creditworthiness by consistently paying off loans and creating a proven history of financial responsibility. Foreigners simply have no established credit score in the United States and thus American banks cannot reasonably determine the risk of lending to a non-US citizen.

2. Foreigners Can Leave the Country at Any Time

If a US bank lends to an American, it is reasonable to assume that the bank could track that person down. However, a non-US citizen can leave the country at any time. Once a person has left the country, it is nearly impossible for a US lender to get its money back. While there are some international agreements in place, the process of tracking down a foreigner who owes money is lengthy and complicated. US banks instead avoid the risk by not lending to non-US citizens in the first place.

3. Non-US Citizens Apply for Loans Without a Co-signer

When a person doesn’t have an established credit history, US banks will not loan to that person. In order to overcome this issue, some people will apply for a loan with a co-signer. Should the borrower fail to make payments on the loan, the lender is legally allowed to go after the co-signer. But this option is difficult for non-US citizens. Often times, foreigners need a loan immediately, like in the case of international students. Finding a creditworthy American who is willing to co-sign a loan is difficult for non-US citizens who have just arrived.

4. Non-US Citizens Don’t Have the Required Paperwork

There are certain rules and regulations for foreign nationals seeking loans in the United States. Those with permanent resident status will find it much easier to be approved for a loan by a US bank. But the rules are different for non-permanent resident aliens. Generally, foreigners with non-permanent resident status must provide proof of work eligibility and authorization, usually with either Form I-766, Form I-765 or Form I-797A with an attached Form I-94. Larger loans become even more complicated and require long-term employment and down payment. Often times, non-US citizens lack the proper documentation for a loan from a US bank.

About Stilt:

Stilt provides loans to international students and working professionals in the U.S. (F-1, OPT, H-1B, O-1, L-1, TN visa holders) at rates lower than any other lender. Stilt is committed to helping immigrants build a better financial future.

We take a holistic underwriting approach to determine your interest rates and make sure you get the lowest rate possible.

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