Can I get a personal loan on a visa?
Most lenders prefer to lend money to Australian citizens or permanent residents, but there are some that consider providing loans to temporary visa holders. However, you may run into challenges because visas have a limited duration, and lenders want to make sure you can repay the loan within that time. Factors like the length of your visa, your savings and expenses and income can affect your eligibility.
If you've just moved to Australia to work or study and don’t have the funds to purchase something upfront, you might be wondering if a personal loan is a viable option.
Although most lenders will only loan funds to Australian citizens or permanent residents, there are some who will provide personal loans to people on temporary work visas such as 457.
Visa duration
The challenge that most 457 visa holders face is that their visa duration may only allow them to stay 2 – 3 years in the country. Lenders will assess your ability to repay the personal loan within the period of your visa. Generally, the loan term will end at least three months before the expiration of your visa. Depending on your income and other factors, repaying the personal loan in just 2 or 3 years could make the loan unaffordable.
Even if you believe your visa will be extended after the initial period, the lender will only take into consideration the current visa status as approved by the Department of Immigration. Lenders won’t take into consideration any visa extensions that are awaiting approval. Similarly, provisional visa holders are unlikely to be approved.
Will I be approved?
As a temporary resident, you are unlikely to have a significant credit history in Australia. Instead, lenders will consider a range of other factors to assess whether you are a ‘safe’ borrower.
These factors include:
- Visa length. Is your visa valid for longer than the duration of the loan applied for?
- Visa type. Lenders may only offer a personal loan to temporary residents holding certain types of visas. You have a better chance of success if your visa is sponsored by an employer.
- Visa validity. If you are working multiple jobs, you could be in breach of your visa.
- Income and profession. Can you show that you have regular income and a stable employer? Lenders will also take your profession into consideration.
- Savings. If you can show that you have saved a deposit, or save money regularly from your income, lenders are more likely to view you as a safe borrower.
- Expenses and debts. Lenders will consider your everyday expenses and other debts to determine whether you can afford to make repayments on the personal loan without falling into financial difficulty.
- Loan guarantor. If a close relative with a good credit report co-signs your loan, you may have a higher chance of being approved. Your loan guarantor accepts responsibility for the repayments if you default for any reason. Keep in mind, your loan guarantor will need to be an Australian citizen or permanent resident.
Special requirements
Depending on your profession and visa status, some lenders may require you to provide a cash deposit to reduce the amount you need to borrow
Can I get a personal loan if I am an international student?
Applying for a personal loan as an international student can be challenging. Not all lenders will offer personal loans to international students and those that do are likely to include restrictions and conditions on the loan.
It’s a good idea to spend some time researching your options to find out which lenders are willing to offer personal loans to people who hold your specific visa. You can do this by speaking with a loan specialist who is experienced in finding personal loans for people in a wide range of situations.