Compare personal loans for Canadian expats
You can take out a loan if you're travelling or living overseas – but not every lender will allow it.
Unexpected opportunities and expenses often arise while you’re living or travelling abroad, and it’s not uncommon to need just a bit more cash to get by. While you could attempt to borrow money in the country you now reside in, some Canadian personal loan providers will allow you to take out a loan – but you’ll need to have an active Canadian bank account, proof of income and still be a Canadian citizen or permanent resident.
Can I get a loan when living or travelling overseas?
If you’re just travelling overseas for a few weeks or months, it’ll be much easier to get a loan from a Canadian bank, credit union or online lender since you’ll still likely have a permanent Canadian address, a working bank account and Canadian citizenship or residency.
But if you’ve moved overseas and have given up your Canadian address or bank account, you’ll have a much harder time. Having a working Canadian bank account will be necessary, and having a permanent Canadian address will also likely be a requirement. Since you’re living overseas, some lenders may require that you provide collateral that you own in Canada to secure your loan, such as a vehicle or your home.
There will be other eligibility criteria that you need to meet too, including minimum income, age and credit score requirements.
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Before applying for a loan, contact the provider and notify them of your situation. Not every lender will allow you to take out a personal loan if you’re travelling or living overseas. Factors such as how long you’ve been gone for, when you plan to return to Canada, whether or not you still have a Canadian address and your residency status will play a big role in whether or not you’re eligible.
Financing options when living or travelling overseas
You can get a loan from a Canadian provider while you’re travelling or living overseas – but your options will be limited. Depending on your circumstances, you could consider:
- Getting an online loan. You will likely need to have a Canadian bank account for this option to work — most online lenders aren’t comfortable sending money to an overseas bank account. You’ll also need to meet the eligibility requirements, and may need to provide collateral to secure the loan – especially if you no longer have an address in Canada. Before applying with an online lender, contact the lender in question and notify them of your situation. You can’t usually find out online whether or not you’re eligible for a loan product when living overseas – so you’ll need to contact the lender.
- Getting a personal loan from your Canadian bank. You could take out a loan with your Canadian bank, as long as you still have a working Canadian bank account that can be accessed overseas. While not all banks will allow you to take out a loan if you’re not living in the country, some banks will allow it. You’ll need to give your bank a call to see if you qualify, and ask what the process involves. It could take a while to get approved if you’re employed by a foreign company. If your bank offers international banking options, take advantage of them — it could also help you qualify for a loan.
- Getting a loan from a local financial institution. In some countries, it’s possible for a Canadian citizen to take out a personal loan from a local financial institution. Loans typically depend on factors such as the country’s financial regulations, its relationship with Canada and the demand for Canadian expat financing. You won’t want to go for this option unless you’re a legal resident with a bank account or you’re trying to buy real estate — otherwise, you might have trouble qualifying. Even if you do qualify, make sure you fully understand how borrowing money works in that country. Don’t sign anything without running it by a translator unless you’re a native speaker with a firm grasp of financial jargon.
- Using an existing credit card. If you already have a credit card and you have a large enough credit limit to cover your necessary expenses plus the amount you need access to, you could charge it to your card and pay it off as soon as possible. Remember that while you can make as little as the minimum payment each month, you’ll need to pay down the balance in full to avoid paying interest. If you’re living or travelling overseas, it’s best to apply for a no foreign transaction fee credit card – you’ll save 2.5% on every transaction.
- Borrowing money from friends or family. Although this can damage a relationship should you fail to pay back the money, you could turn to friends and family for some quick (and cheap) funding. There are websites and apps that allow you to create a contract with personalized terms and conditions for the loan, which can help to preserve your relationship and ensure you pay back the money.
International bankingLiving overseas is extra expensive if you have the wrong bank account. Among international ATM fees, exchange rates, foreign transaction fees and the inability to deposit paycheques, your Canadian bank account is impractical if you’re staying overseas for a year or longer.
While there aren’t many banks in Canada that are internationally friendly, you could potentially turn to a bank like HSBC. They offer accounts that are of interest to expats moving to certain countries. It’s likely a better option to open a bank account in the country you’re living in, since you’ll be able to receive your paycheque in the local currency and pay your bills.
While it varies between lenders, to get a loan you’ll typically need to:
- Be a Canadian citizen or a permanent resident.
- Be at least 18 years of age, or the age of majority in your province or territory.
- Have an active Canadian bank account.
- Meet any credit score requirements.
- Meet any minimum income requirements.
Getting a loan overseas complicates an already seemingly complicated process. Your best option is to attempt to take out a loan with an online Canadian lender or your Canadian bank. If you decide to look locally in your new country, qualifying can depend on factors like your residency status and employment.
Even though your options are limited, compare different loans and contact a lender to notify them of your situation before applying. You can also look into other financial solutions — such as borrowing from friends or family or using a credit card — before applying for a loan.