If you’re a little strapped for cash in your adopted home there’s good news regarding access to personal loans; it is possible. However, there are special conditions that apply that are worth noting before you commit to taking out a loan and they vary from lender to lender.
When you apply for a loan Australian lenders won’t be able to access your credit history from overseas so the good news is, if you’ve had a rocky past that doesn’t limit your chances of being accepted.
There are of course other restrictions and most lenders won’t look at your application unless you have secure employment in Australia, an income of $50,000 p.a or more, an Australian bank account and the ability to repay the loan before your visa expires. You may also be limited in your choice of loan as non-residents are not eligible for all financial products and the interest rates are generally higher for the ones that are available unless you’re securing the loan against an asset like a car.
But don’t let this discourage you. If you meet the requirements of the lender taking out a personal or car loan can be quite easy. Some of Australia’s biggest banks have loans on offer for visa holders from the Commonwealth Bank to St George and if you’re visiting from England ex-pat forums seem to have their money on Westpac for approving 457 visa holder loans in a fast and easy way.
Failing acceptance of a loan directly by a bank there are still options available to you. Using a third party consultant could be an option in securing the extra cash you need. Company’s such as FastLane Finance or Gold Vision Financial Services offer to approach lenders for you and use their experience and connections in the finance industry to secure you a loan with a reasonable interest rate.
The advantage of going through a third party lender is that they can approach multiple lenders and take the hard work out of searching for a loan. The downside is that you will be charged a fee for their services so make sure you clarify up front how much the fee will be so you can calculate it into your total costs.
Keep in mind also that these companies generally work on a commission basis. While it is illegal for them to offer you a product that is unsuitable to your needs it is still important to be wary of the loans being offered to you. If the interest rate seems ridiculously high and they are charging exorbitant fees then those are clear signs to stay away. As a guide the average interest rate for an unsecured loan in 2015 was 13.79 per cent.
Alternative credit providers are also available, such as Fair Go Finance, who can finance a loan of up to $5000 which can be applied for online. As the name suggests they are willing to assess all requests, including those of visa holders, and have criteria that can be considered more lenient than banks. This may be a good option for some visa holders if you meet the basic requirements of having an income of $500 a week and can repay the loan during the life of your visa. Depending on the amount you borrow and the risk you are deemed to be interest rates can vary quite a bit. The site says interest rates can range from 0 per cent to 29.9 per cent and monthly fees can be anywhere from $5-$80.
Build up your credit history in Australia
If you’re having trouble getting a loan from scratch, try building up your credit history while you’re here to give you a better chance of being accepted for a personal loan. While they might not be counting your credit history from home it will be important to show that since you’ve come to Australia you’ve been keeping on top of things. An easy way to do this is to show that you can keep a regular payment commitment. Paying off something small like your mobile phone bill on time and consistently is a good start.
Staying in the same job for a while will also show you have a stable place of employment and are less of a risk for lenders. Another suggestion could be to take out a credit card with the bank you wish to borrow from. Pay off your total debts on time each month and you will have more of a bargaining chip when it comes to requesting a loan.
No matter which loan you choose to get you on your feet during your time in Australia it is always important to make sure that it is a competitive one. Don’t feel pressured into taking on a high interest rate loan without first comparing what’s on the market for visa holders and making some enquiries.
Here are some loans listed on RateCity that you may wish to look into to start your search for a personal loan. Keep in mind that approval for these loans is at the discretion of the provider.