The short version
- Some lenders lend to people on temporary visas, usually with at least a year left on the visa.
- The loan term usually has to end before your visa does.
- Expect more checks on income and visa conditions.
Can temporary residents get a personal loan?
Yes, but most banks and lenders only lend to citizens and permanent residents. The ones that accept temporary residents usually list which visa subclasses they take. It may take a little more paperwork and patience.
Expect a possibly higher rate, as lenders can't see your credit history from overseas and price for the extra risk.
How your visa affects the loan
Terms usually run from one to seven years, but most lenders want the loan repaid before your visa ends, so the time left on your visa can limit the term. A shorter term means higher repayments, which can also limit how much you can borrow.
What lenders look for
- A visa with enough time left to cover the loan term. Long-term work visas, such as skilled visas, are the most widely accepted.
- Steady employment and income in Australia. Most lenders don't lend to temporary residents who aren't working.
- An Australian bank account.
- Some Australian credit history, such as a phone plan, credit card or overdraft. Lenders can't check your credit history in another country, but you can build one here.
- Age, usually 18 or over, though some lenders ask for 21.
What you'll need
Most lenders take applications online. Have these ready:
- Your passport and visa details.
- Recent payslips or bank statements.
- Proof of your address in Australia, such as a utility bill, bank statement or rental agreement.
- Your Australian bank account details.
- Proof of any savings.
Pros
- Many lenders decide within hours and pay soon after approval.
- Repaying on time builds an Australian credit history, which helps if you later apply for permanent residency or a home loan.
- Most lenders let you repay weekly, fortnightly or monthly.
- Many loans have no early repayment or exit fees.
- Some variable rate loans have a redraw facility, so you can take out extra repayments if you need them.
Cons
- There are fewer lenders to choose from, so it's harder to shop around.
- Rates may be higher than for a citizen or permanent resident in the same position.
- You'll need more documents, and the loan term is limited by your visa.
Alternatives
- Saving first. If the cost can wait a few months, saving for it costs nothing in interest, and a high interest savings account pays you instead.
- A secured car loan, which some lenders find easier to approve for temporary residents.
- A low rate or interest free credit card. For a smaller amount you can repay within a year or so, a card's interest free period can cost less. Pay it off before the period ends, as the rate afterwards is usually higher.
How to apply
Applying for a personal loan on a temporary visa usually takes 15 minutes online. Most lenders give a decision within a day or two, and some within the hour.
- Check your rate first. Many lenders show the rate you'd get with a soft check, which doesn't show as a credit enquiry, before you formally apply.
- Have your details ready. Lenders ask for ID, payslips or tax returns, your spending, and the debts and credit limits you already have.
- Apply to one lender at a time. Each formal application is recorded on your credit report, and several close together can make lenders more cautious.
- Read the contract before you sign. Check the comparison rate, every fee, and what happens if you repay early or miss a repayment.
- Have your passport, visa grant notice and payslips ready.