After you’ve paid for your flights, accommodation and all the other costs associating with immigrating, you might decide you are in Australia for the long haul, and would like to look into a house, car or just a cash injection to get you started down under.
Personal loans for temporary residents in Australia
To help you kick things off, you can apply for a personal loan.
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).
Personal Loan Unsecured
Unsecured Personal Loan - Average
Secured Medium Loan
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 the lenders eyes, so you’ll need to prove that you’re a trustworthy borrower in other ways.
Some of the alternative criteria lenders may use to assess your ability to pay off the loan may include:
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. Using a personal loans repayment calculator helps you work out the cost of a potential loan and what your repayments could look like. You can improve your chances of being approved for a personal loan by only applying for an amount you can comfortably afford to repay.
Demonstrate you can pay the loan off
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.
Some of the criteria that these lenders may have could include:
Acceptable financial situation (income, assets, cash accounts) suggesting an ability to pay the loan off
Proof of Australian residency
Proof of visa (and a loan term that does not exceed the length of the visa)
Having an Australian bank account
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.
Getting a home loan as a temporary resident
Some lenders offer the same home loan features and interest rates for temporary residents as for permanent residents and citizens. Additional restrictions may apply, like additional supporting documents or reduced maximum loan to value ratio (LVR). Certain types of visas - spousal or interdependency for example - may have less stringent criteria.
As discussed, lenders in Australia are unable to access your credit history in a foreign country, so you’ll need to use alternative means to demonstrate your ability to repay the loan.
If you are buying a house as a temporary resident of Australia, you are classed as a foreign investor. The Foreign Investment Review Board (FIRB) is a non statutory body established to provide advice to the government on foreign investment matters. Prospective buyers can lodge applications with the FIRB. While it’s a non-regulatory body, lenders will tend to look much more favourably upon foreign buyers with FIRB approval.
Savings.com.au’s two cents
When applying for a loan as a temporary resident, you should consider exactly what you need the loan for, and whether it is the best option. If you do not have a secure income, you might not want to wrack up large amounts of debt in an unfamiliar country.
On the other side of the coin, a personal loan could be a great way to quickly get settled, buying yourself furniture for example, and giving yourself some emergency funds to fall back on. If you are confident you will be able to repay the entire loan, it could also be a good way to quickly build your Australian credit history, helping your chances of being approved for a bigger loan in the future.
When it comes to a home loan, you’ll need to assess how likely it is you will remain in Australia long term. Worst case scenario, you need to leave Australia early into your loan term, and have to pay the higher interest rates for an investment property for the remainder of the loan term. If you are confident you are in Australia to stay, and have the financial resources to afford it, buying a house early on could be a great way to establish yourself in your new home.
If you are going to go ahead with a loan, all the normal advice you’ll find throughout Savings.com.au applies. Take the time to 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.
This article was originally published by Emma Duffy in May 2021 and updated by Harry O'Sullivan in March 2023
Photo by Spencer Davis on Unsplash