Compare personal loans for temporary residents in Australia

A personal loan can often come in handy when you’re a little strapped for cash, particularly when you’ve been hit with unexpected expenses such as medical bills, emergency travel costs or even a reduction to your regular income. 

Many of these sorts of unforeseen outgoings not only affect Australian residents, but also non-residents and visa holders. So, you might be wondering whether those living in Australia on a visa are eligible for personal loans.

While the lending criteria might be more stringent, there are still a number of banks and lenders that would consider a personal loan application from certain temporary residents.

One of the biggest reasons visa holders might find it more difficult to get a personal loan than permanent residents or Australian citizens is because banks and lenders will generally see them as more of a risk. Much of this perceived risk comes from the uncertainty of whether a temporary resident will be able to pay off their loan before their visa lapses.

Even if your loan term ends well before your visa’s expiry date, there is still a potential risk your visa could be cancelled for one reason or another. For example, if a temporary resident breaches their visa’s conditions, they could be sent home early. As unlikely as this may seem, banks and lenders take all of these scenarios into consideration when determining the level of risk you pose as a potential borrower.

Due to the fact that temporary residents are generally seen as riskier borrowers, lenders may also require you to pay a higher interest rate on your loan. This is, however, dependent on your individual financial situation and can differ between lenders.

Eligibility criteria for temporary resident personal loans will tend to differ from one lender to the next. But for most, applicants must:

• Be 18 years of age or older
• Have permanent employment (and often a minimum income)
• Have proof of temporary visa documents

Lenders may also require you to have an Australian bank account for the funds to be transferred into if your loan application is approved. For information specific to your personal situation, consider reaching out to your preferred personal loan lender, or a personal loan broker.

The personal loan application process is largely the same for temporary residents as it is for permanent residents and citizens, with a few key differences. Here are six steps to follow when applying for a personal loan as a temporary resident: 

1. Consider your credit history: Unless you have already been approved for a loan or other finance during your time in Australia, you won’t have an Australian credit score. Lenders also won’t be able to access any international credit history. This means it can be difficult to prove whether your past credit behaviours have been positive. You may alternatively be assessed on your current financial situation, visa history, value of assets and other factors, so it’s worth being prepared with any documentation that may assist with this process.
2. Assess your budget: Using a personal loan calculator to get an estimate of the total cost of a potential loan, and what your loan repayments might be, could help you make a more informed decision. You may generally have a better chance of getting your loan approved if you apply for a loan amount that you can comfortably afford to make repayments on. It could also be a good idea to consider a loan term that ends well before your visa’s expiry date, as long as it works with your budget.
3. Search and compare personal loans: RateCity allows you to easily compare a wide range of personal loan options so you can find one that best suits your individual needs. Consider whether a secured or unsecured personal loan better suits your requirements, and compare other factors such as interest rates, comparison rates and extra features.
4. Check the lending criteria: Once you have compiled a shortlist of potential personal loans, check to see whether you meet all of the eligibility requirements, particularly those that are specific to temporary residents. Keep in mind that these can differ from one loan to the next. Consider reaching out to the lender if you have any questions, prior to submitting your application.
5. Prepare your application: If you’re comparing personal loans on RateCity, you can click straight through to the lender’s website where you can conveniently submit an online application for your preferred loan.
6. Wait for a decision: Once you submit your application and the documentation required, it’s just a matter of waiting for your loan approval.

As with any financial decision, it’s worth considering both the benefits and disadvantages involved when it comes to applying for a personal loan as a temporary resident.

Pros:

• Access to cash: If you are approved for a personal loan, you’ll have access to money when you need it most, potentially making challenging or unexpected financial situations more manageable.
• No bad credit history: Since international credit scores are not taken into consideration, any bad credit history won’t affect your application.
• Competitive finance: Doing your research and comparing your options can assist you with finding the most competitive loans that may be available to you.

Cons:

• Higher rates: Temporary residents may be faced with higher interest rates as lenders generally consider them to be riskier borrowers.
• No good credit history: Again, international credit scores are not taken into consideration, which also means any good credit history won’t be able to assist with your application.
• Strict lending criteria: Tougher eligibility criteria can sometimes mean you might have to earn a higher income or have bigger assets than other borrowers.