What we like:
Favorable for nonresidents
|Rates (APR)||7.99% – 35.99%|
|Loan Terms||6 – 36 months|
|Loan Amounts||$1,000 – $35,000|
|Fees||Origination fee: 0% – 5%|
Prepayment penalty: None
Late fee: 4% – 5% of monthly payment
The business of education lending is booming, most notably in the online marketplace environment where companies are giving student loan borrowers more options than they had a decade ago. One of those successful online lenders is Stilt, a unique company built on the vision of providing a transparent, affordable way for international students, visa holders, DACA holders, and refugee and asylum applicants to borrow for their education through personal loans.
In this review:
Founded in 2015 by Columbia University alums Rohit Mittal and Priyank Singh, Stilt is a private loan company catering to expatriates. The company is headquartered in San Francisco, California, and it currently offers unsecured personal loans ranging from $1,000 up to $35,000 without the need for collateral or a cosigner. Stilt also gives loans even if you don’t have a Social Security number or a credit score.
To date, it has dispersed millions in funding to responsible students needing a way to pay for their education in the United States. Stilt does not hold itself out to be a bank, instead, its founders describe themselves as a technology company focused on a niche market where they see a growing need.
Stilt’s founders created the company with the initial purpose of challenging the norms running rampant through other private personal loan lenders. These norms, focused on evaluating borrower risk on past credit history and credit score, do not work as an accurate gauge for international students and their creditworthiness.
While expats may have a well-established credit history overseas, once they come to the United States, their financial past is virtually wiped clean. Without a credit score, history of financial activities, and a track record of on-time payments to creditors, international students are deemed an unacceptable risk for nearly all traditional U.S. lenders – including those offering student loans. Even with the help of a qualified cosigner, long-term visa holders have a difficult time getting the funding they need to attend a U.S.-based college or university.
>> Read More: Where to get a personal loan for H1B visa holders
Like competitors Earnest and Pave, Stilt utilizes technology-based tools to gain a better understanding of the risk a borrower represents to the lender. More weight is placed on educational background or future endeavors, experience at work, current and future income, and other ancillary financial behaviors to evaluate the credit risk a borrower poses to Stilt. For international students, Stilt is currently one company that works in this niche market, helping non-U.S. citizens receive a personal loan to finance their education-related expenses but also build their credit history in the United States.
How Stilt Works
For visa holders and international students, Stilt offers a simple platform to apply for personal loans which can be used for education. While not a full list, Stilt reviews the following information for borrowers seeking a loan through the company to better understand if they are qualified to take on debt:
- Employment Details: Stilt borrowers are evaluated based on their current employment or future employability, as it points to an ability to repay borrowed funds in the future. If a borrower has a job offer or a strong work history, either in the United States or elsewhere, Stilt views that borrower as a lower risk and is more apt to approve a loan request.
- Education: Stilt also reviews an applicant’s educational background, including coursework and GPA. Through distinct data models, the company is able to gauge the strength of an application based on education-related details.
- Financial Behavior: Stilt takes an interesting approach to reviewing the financial behaviors of its applicants by requiring a secure link to bank account information. The company evaluates spending and saving habits to better understand how expenses are managed each month for both credit and debit accounts. The company also looks for insufficient fund fees, overdraft fees, or other derogatory fees when reviewing an applicant’s bank information.
- Visa Status: Because Stilt is focused on international students, visa holders, DACA holders, and refugee and asylum applicants the status of one’s visa is of utmost importance in the application process. Loans are offered to individuals who hold F-1, OPT, H-1B, O-1, L-1, G, and TN visas.
The application process through Stilt is straightforward, and it is housed completely online. Bank links and document uploads are done through Stilt’s platform, and with the help of algorithms and machine learning, most borrowers receive a loan decision in as little as two business days.
Stilt student loans come with no hidden fees and no prepayment penalties, which closely follows the company’s mantra of transparency in lending.
Personal loans offered by Stilt carry an interest rate ranging from 7.99% up to 15.99%, and total funding can reach $35,000 based on the quality of the borrower’s application and financing need.
Potential Downsides to Stilt Loans
Currently, even qualified applicants may not have access to a personal loan through Stilt in the near future.
The company is not a bank but is instead backed by Y Combinator and a group of investors, which led to a lull in funding in the first half of 2017.
Stilt is fairly restrictive when it comes to how much a borrower can finance through the company and when those funds must be repaid. The costs of attending a college or university in the United States is far higher than in other parts of the world, and the $35,000 loan maximum may not be sufficient for a large number of student borrowers.
Also, Stilt Personal Loans must be repaid within two years, which may present a challenge for those who use the funding for education, but have no immediate job prospects or a low level of income immediately after graduation. Stilt loans used for education do not offer the same provisions to borrowers as federal student loans, such as income-driven repayment, loan forbearance, or potential forgiveness.
Although Stilt has a unique position in the private personal loan market by providing an underserved group of borrowers, the current downsides to Stilt loans may outweigh some of the advantages.4.43 Stilt Personal Loans
Author: Jeff Gitlen
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