If you’re a temporary Australian resident or non-resident in need of a cash injection, it is possible to apply for a personal loan with some lenders.
Living in a foreign country can get pretty expensive by the time you’ve paid for your flights, accommodation, and all the other costs that come with relocating overseas.
To help you with some of those costs, you can apply for a personal loan.
In the market for a personal loan? The table below features personal loans with some of the lowest interest rates on the market.
Personal loans for temporary residents in Australia
Looking for a low-rate personal loan? The table below shows a selection of personal loans for 457 visa holders, sorted by the advertised interest rate (lowest to highest).
Can temporary or non-residents get personal loans in Australia?
The short answer is yes, although you may have to meet extra criteria to be eligible, such as meeting a higher minimum income requirement. Many lenders also require you to hold an eligible visa, and the length of your loan term can’t exceed the length of your visa. So if you have two years remaining on your visa, you will generally only be able to take out a personal loan with a two-year loan term.
A personal loan for a temporary resident or non-resident works in the same way as it does if you’re an Australian citizen, with a few key differences. One of the biggest differences is that lenders in Australia generally do not have access to your overseas credit history, so your credit history in your home country is irrelevant. That means you’re a blank slate in terms of credit history, so you’ll need to prove that you’re a trustworthy borrower. This is why some lenders require non or temporary residents to meet additional criteria to determine your ability to repay the loan as their first port of call of checking your credit history isn’t an option.
Other eligibility criteria you may have to meet includes:
Providing proof of employment
Holding an Australian bank account
Or in some cases being employed in a certain profession.
You may also need to provide a cash deposit to reduce your loan amount.
How to apply for a personal loan as a temporary resident
Consider your budget
Before applying for a personal loan you need to consider how much you can reasonably afford to borrow. Use a personal loans repayment calculator to work out the cost of a potential loan and what your repayments could look like. You may improve your chances of being approved for a personal loan by only applying for an amount you can comfortably afford to repay.
If you’re a temporary resident living in Australia and you haven’t previously applied for a loan, you won’t have a credit history and lenders won’t be able to access your overseas credit history. You should factor this in when applying for a personal loan as it could make it more difficult for you to get approved for a loan.
You may have to supply additional documentation to prove you’re a responsible and trustworthy borrower, such as the examples listed above.
Compare personal loan options
A competitive interest rate can make a world of difference to the overall cost of your personal loan. Your interest rate is determined by many factors, including your risk as a borrower and whether you take out a secured or unsecured personal loan. You may potentially have to pay a higher interest rate because you have fewer personal loan options to choose from and because the lender may view you as a riskier borrower due to your residency status.
According to Savings.com.au’s research, the lowest interest rate we could find for a personal loan for visa holders hovers around the 8% mark. Compared to Australian residents, the lowest personal loan rate is below the 4% p.a mark.
Compare: low-rate personal loans.
Check the lending criteria
Not all lenders offer personal loans to visa holders, so it’s definitely worth checking the eligibility requirements with your lender first. Even if your lender does offer personal loans for eligible visa holders, they will still assess each application on a case-by-case basis.
All the big four banks in Australia (Commonwealth Bank, NAB, ANZ and Westpac) offer personal loans for eligible visa holders. If you are considering taking out a personal loan with a smaller lender, check their eligibility criteria too.
Submit your application
Now it’s time to apply for your personal loan! Make sure you have all the necessary documents ready to go before submitting your application, remembering not to apply for too many personal loans at once. Wait until you hear back from the lender before submitting any more applications.
If you get rejected for a loan application, this will get marked on your credit report and too many loan applications are a big red flag for lenders.
Pros and cons of personal loans for temporary residents
No access to your overseas credit history: Lenders in Australia generally don’t have access to your credit history overseas, so if you’ve got bad credit you don’t need to worry about it following you and preventing you from taking out a loan.
Access to cash: Moving overseas can get pretty expensive, so if you’re approved for a personal loan you’ll have access to cash when you need it most.
Less choice: Because not all lenders offer personal loans to temporary residents, you’ll have fewer options to choose from.
More eligibility requirements to meet: You will also have to meet tougher eligibility requirements than you would if you were an Australian resident, because of the higher risk involved in lending to a temporary resident. For example, even if your personal loan term ends before your visa expires, there is still the potential for your visa to be cancelled if you breach the conditions of your visa. Lenders will factor this added risk in when considering your application.
Your good credit history overseas won’t help you: If you have a good credit score in your home country it won’t assist you when applying for a personal loan here. You will have to prove that you’re a responsible and trustworthy borrower from scratch.
Savings.com.au’s two cents
When applying for a personal loan as a temporary resident, all the normal advice applies: compare your options, make sure you can comfortably afford the loan repayments, look for a competitive rate, and don’t apply for too many loans at once.
Photo by Spencer Davis on Unsplash