Personal Loans For Temporary Residents
Temporary residency in New Zealand doesn't cut off access to finance. Find out what your options are.
Whether you’re planning to make a permanent home here in New Zealand or just here to work for a few years, you still might find yourself in need of a personal loan. Some banks and lenders may consider you for a loan even if you aren’t a permanent resident. However, it’s important to know what loans you’re eligible for and how to find the right one before you submit an application.
How does a personal loan for a temporary resident work?
A personal loan is a product that allows you to purchase an asset or make an investment. You then pay back the lender with added interest over a set amount of time, usually six months to seven years. For a temporary resident, such as an individual on a work visa, additional criteria may need to be met to qualify.
Most lenders need the details of your visa before you are approved, to ensure the term of the personal loan does not exceed the amount of time left on your visa. You may also need to meet higher minimum income criteria or show extra credentials. It is best to bring evidence of your credit history from your home country, as you will need to provide this before you are approved for a loan, or other credit, in New Zealand.
How to compare your personal loan options
When comparing your options, make sure you consider the following points:
- Interest rates. Interest rates can vary greatly between lenders. Study these carefully, so you understand how much your monthly repayments are, as well as how much you will pay in interest over the life of the loan. A personal loan calculator can help you determine this.
- Fees. Compare the fees between various lenders. Some may charge for processing the application, while others could have a monthly charge.
- Eligibility requirements. While most banks and other lenders will offer loans to people on temporary visas, you will need to meet certain criteria. Some banks require that you have a certain amount of time left on your visa, or that you meet a minimum income amount. Investigate this thoroughly before filling out an application.
- Secured. In some instances, you can qualify for a secured personal loan,where an item of worth, such as a car, is used to guarantee the loan.
What are the benefits and drawbacks to consider?
- Competitive rates. You can find a competitive rate if you compare your options before applying.
- Flexibility. You can choose to pay off the loan over a term of between six months and seven years. This depends on the length of your visa and what term works best for you.
- Higher rates. In comparison to a home loan or refinance, the rates for a personal loan are higher.
- Less choice. As not all personal loans are available to temporary residents, you have less to choose from.
- Documentation. As a temporary resident, you may have to show more documentation than a New Zealand resident or citizen. A copy of your passport and visa is required, along with details of your work history in New Zealand, eg confirmation of employment.
Is there anything to avoid?
- Applying for a higher loan than you need. Only apply for the amount of money you need to make a purchase or fund a trip. Make sure you are not paying interest for something you could have paid for out of your pocket.
- Making too many applications. Compare your options first and only apply for the loan that meets your individual needs and offers the best rates. If you apply for too many loans in a short space of time, your credit history is negatively impacted.
How can I make sure I’m approved?
There’s no way to guarantee you are approved for a personal loan, but the way to give yourself the best chance is to ensure you meet all of the minimum eligibility criteria. Minimum criteria for personal loans usually stipulate:
- Age. You’ll need to be over the age of 18.
- Visa. Check if any specific criteria are mentioned with regards to visas. You need to make sure you have an adequate amount of time left on your visa to repay the loan.
- Employment. You will generally need to be in guaranteed employment and have a minimum level of income.
- Finances. You need a New Zealand bank account that is in good standing.
The right loan will depend on your needs and situation, so starting a comparison using the table above can help you narrow down your choices. You can click through to the review pages from the table above and once you’ve found a loan you’re eligible for and that you want to apply for, click “Go to Site” to submit your application.