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I am a Canadian citizen starting work in the USA under a F1 OPT extension (one year). After the OPT extension is up, I'll probably be seeking an H1-B visa.

I'm looking for an auto loan. I have a decent US credit record. An online application with a big bank was insta-rejected due to my non-permanent status.

Advice I have seen online:

  • Ask the dealer for help, they will know all the local lenders and might know which one will deal with non-permanent residents.
  • Apply for the loan with a US citizen (presumably someone with whom you have a long-term relationship).
  • Don't worry about it, lenders care about work history and credit score, not citizenship (this advice seems to be not universally true, as I have found).

I've heard that getting a loan offer independently from the car dealer is an advantage in negotiating. Let's assume I don't want to co-apply with a US citizen. And I don't want to try a dozen online loan applications, because all those applications will bring down my credit score.

Are there lenders who have a reliable track record of extending auto loans to non-permanent residents?

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  • If the company where you are working has a credit union, try that. I suspect that there might not be a national data base of lenders who make auto loans to people on student visas and the like. Local lenders are more likely to make a loan to you than national lenders. – Dilip Sarwate Sep 2 '12 at 2:43
  • I wondered whether it might be possible to get the loan in Canada and then use the money effectively to be a cash purchaser of the car in the US. – Vicky May 15 '13 at 13:03
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I don't think that they ask you for your citizenship status when you apply in a dealership. At least I don't remember being asked. I know of at least 3 people from my closest circle of friends who are in various immigration statuses (including one on F1) and got an auto loan from a dealership without a problem and with good rates.

They have to ask for your immigration status on online applications because of the post-9/11 law changes.

Chase and Wells Fargo have a reliable track of extending auto loans to non-permanent residents.

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  • Loans through the dealership where you are buying the car should be a last resort assuming you cannot get a loan elsewhere. Lots of games are played, and especially that low interest rates to entice the buyer but the selling price is jacked up so that ultimately you end up paying much more. In fact, even mentioning to the salesman that you want to finance the purchase through the dealership will change the price negotiation considerably. – Dilip Sarwate Sep 2 '12 at 22:08
  • @Dilip, that might be true. But I don't play games with dealerships, I decide what car I want and how much I want to pay for it, and that's it. Then, you don't need to worry about negotiations and such. Usually, I get what I want, for the price I want it for, even if some dealerships show me the door when I lay out my terms. Last one not only gave me the car I wanted for the price I decided to pay for it, but also matched the interest rate to the preapproved rate I got from the bank. Did they earn money on me? I sure hope they did. I got what I wanted on the terms I waned, so why would I care? – littleadv Sep 2 '12 at 23:15
  • You are negotiating from a position of stregth: you have a pre-approved loan from the bank; the OP is wondering where he can find financing. So I think your response to my comment is not a very helpful contribution to this discussion. – Dilip Sarwate Sep 2 '12 at 23:21
  • @Dilip neither is yours, because following the same logic, the OP doesn't have much choice. So what's the point bumming him down? – littleadv Sep 3 '12 at 0:30
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    The key piece of information that made me accept this answer was "online apps need to ask for citizenship due to post-9/11 legislation". – andrewtinka Sep 11 '12 at 22:57
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I took @littleadv 's recommendation that online apps only ask for citizenship due to post-9/11 legislation. I applied to 2 banks in person (one big, one small), and at the dealership.

None of my in-person applications ever touched on the issue of citizenship. I even applied in person at the same bank that insta-rejected me online, and told them up front, "I applied online but you rejected me because I'm not a permanent resident." The banker nodded, said "that shouldn't matter here", and continued processing my application.

I did find it very hard to get a loan. I have a credit score in the "excellent" range, but have only 1 open credit card (for 5 years). Apparently, most lenders want to see more open credit before writing an auto loan. The big bank said outright "We want to see 3-5 credit cards open". However, the dealership did find a bank willing to extend me a loan.

So: The most reliable way for a non-permanent resident alien to get an auto loan in the US is to avoid online applications. Also, if possible, establish a wide credit history before you try.

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You have figured out most of the answers for yourself and there is not much more that can be said. From a lender's viewpoint, non-immigrant students applying for car loans are not very good risks because they are going to graduate in a short time (maybe less than the loan duration which is typically three years or more) and thus may well be leaving the country before the loan is fully paid off. In your case, the issue is exacerbated by the fact that your OPT status is due to expire in about one year's time. So the issue is not whether you are a citizen, but whether the lender can be reasonably sure that you will be gainfully employed and able to make the loan payments until the loan is fully paid off. Yes, lenders care about work history and credt scores but they also care (perhaps even care more) about the prospects for steady employment and ability to make the payments until the loan is paid off. Yes, you plan on applying for a H1-B visa but that is still in the future and whether the visa status will be adjusted is still a matter with uncertain outcome. Also, these are not matters that can be explained easily in an on-line application, or in a paper application submitted by mail to a distant bank whose name you obtained from some list of "lenders who have a reliable track record of extending auto loans to non-permanent residents." For this reason, I suggested in a comment that you consider applying at a credit union, especially if there is an Employees' Credit Union for those working for your employer. If you go this route, go talk to a loan officer in person rather than trying to do this on the phone. Similarly, a local bank,and especially one where you currently have an account (hopefully in good standing), is more likely to be willing to work with you. Failing all this, there is always the auto dealer's own loan offers of financing. Finally, one possibility that you might want to consider is whether a one-year lease might work for you instead of an outright purchase, and you can buy a car after your visa issue has been settled.

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From personal experience (I financed a new car from the dealer/manufacturer within weeks of graduating, still on an F1-OPT):

  1. Only after negotiating on the price of the car, ask the dealer for their financing offer. Most times, the manufacturer offers lower interest rates.
  2. Ask for incentives surrounding their "recent college graduate" program. There are several car makers that throw in, either their top tier credit offer, or an additional cash incentive.
  3. Finally, like the other posters said, you need to express a lower risk for the underwriter to ignore (or discount) your immigration status. In my case, I had an almost 25%-30% down payment on the car. The advantage of this, if you can afford it is (a) you will almost always be approved, (b) the interest rate will be low and (c) the monthly payment will be more manageable (always good for a relatively lower paying first job).
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