One of the biggest challenges expats face is raising a personal loan from a bank in their new country. When faced with new residents that have new jobs and no credit history, many banks can be reluctant to lend, unless the expat has proof of substantial funds – which is a catch 22. After all, if you have substantial funds, chances are, you have no need of a personal loan! Added to this many of the foreign banks operate under very different rules to the banks you are familiar with in your home country.
So how do you go about raising a personal loan? Well here are some tips that could help smooth the process.
Tips for expats looking to obtain a personal loan:
- Do your research: The first step is researching carefully to find out what the laws and bank rules are in your new country. You might be pleasantly surprised to discover they may be in your favour and offer lower interest rates or lower lending limits.
- Do your homework: When applying for a loan, it is safe to say the bank will want to look at the purpose of the loan and how much you want to borrow. So make sure you have an amount in mind that is in line with the asset or purpose for the loan. You will also need to supply your regular income and have proof of your outgoing expenditure so they can see if you can afford the repayments.
- Do not borrow to pay off debt: Most foreign banks will not offer you a personal loan to help you pay off your existing debt. In today’s tough economic climate, it is viewed as throwing good money after bad.
- Do make a good impression: Many foreign banks won’t just provide a loan as a result of an online on printed application. They will want to meet you in person to form an impression of whether you’re responsible and trustworthy.
- Do have money to put down: Many banks will only raise a loan if you can prove you also have a substantial down payment to make on the purchase.
- Do establish good track record: Many banks demand at least six months of permanent employment in your new country, a letter from your employer and a good banking track record with the bank before they will agree to any personal loan or home mortgage.
- Do be patient. Don’t expect a quick decision. Raising a personal loan can take some time as banks tick all the boxes. So don’t rush into a bank expecting to receive your loan tomorrow or even within a week.
If you’re busy planning on immigrating and need advice about your financial migration, contact us today and we’ll help you on the path to financial freedom in your new home.
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