Personal loans for 457 visa holders in Australia

Personal loans for 457 visa holders in Australia

If you’re a little strapped for cash in your adopted home there’s good news regarding access to personal loans; it is possible. However, there are special conditions that apply that are worth noting before you commit to taking out a loan and they vary from lender to lender.

When you apply for a loan Australian lenders won’t be able to access your credit history from overseas so the good news is, if you’ve had a rocky past that doesn’t limit your chances of being accepted.

There are of course other restrictions and most lenders won’t look at your application unless you have secure employment in Australia, an income of $50,000 p.a or more, an Australian bank account and the ability to repay the loan before your visa expires. You may also be limited in your choice of loan as non-residents are not eligible for all financial products and the interest rates are generally higher for the ones that are available unless you’re securing the loan against an asset like a car.

But don’t let this discourage you. If you meet the requirements of the lender taking out a personal or car loan can be quite easy. Some of Australia’s biggest banks have loans on offer for visa holders from the Commonwealth Bank to St George and if you’re visiting from England ex-pat forums seem to have their money on Westpac for approving 457 visa holder loans in a fast and easy way.

Failing acceptance of a loan directly by a bank there are still options available to you. Using a third party consultant could be an option in securing the extra cash you need. Company’s such as FastLane Finance or Gold Vision Financial Services offer to approach lenders for you and use their experience and connections in the finance industry to secure you a loan with a reasonable interest rate.

The advantage of going through a third party lender is that they can approach multiple lenders and take the hard work out of searching for a loan. The downside is that you will be charged a fee for their services so make sure you clarify up front how much the fee will be so you can calculate it into your total costs.

Keep in mind also that these companies generally work on a commission basis. While it is illegal for them to offer you a product that is unsuitable to your needs it is still important to be wary of the loans being offered to you. If the interest rate seems ridiculously high and they are charging exorbitant fees then those are clear signs to stay away. As a guide the average interest rate for an unsecured loan in 2015 was 13.79 per cent.

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Alternative credit providers are also available, such as Fair Go Finance, who can finance a loan of up to $5000 which can be applied for online. As the name suggests they are willing to assess all requests, including those of visa holders, and have criteria that can be considered more lenient than banks. This may be a good option for some visa holders if you meet the basic requirements of having an income of $500 a week and can repay the loan during the life of your visa.  Depending on the amount you borrow and the risk you are deemed to be interest rates can vary quite a bit. The site says interest rates can range from 0 per cent to 29.9 per cent and monthly fees can be anywhere from $5-$80.  

Build up your credit history in Australia

If you’re having trouble getting a loan from scratch, try building up your credit history while you’re here to give you a better chance of being accepted for a personal loan. While they might not be counting your credit history from home it will be important to show that since you’ve come to Australia you’ve been keeping on top of things. An easy way to do this is to show that you can keep a regular payment commitment. Paying off something small like your mobile phone bill on time and consistently is a good start.

Staying in the same job for a while will also show you have a stable place of employment and are less of a risk for lenders. Another suggestion could be to take out a credit card with the bank you wish to borrow from. Pay off your total debts on time each month and you will have more of a bargaining chip when it comes to requesting a loan.

Starting point

No matter which loan you choose to get you on your feet during your time in Australia it is always important to make sure that it is a competitive one. Don’t feel pressured into taking on a high interest rate loan without first comparing what’s on the market for visa holders and making some enquiries.

Here are some loans listed on RateCity that you may wish to look into to start your search for a personal loan. Keep in mind that approval for these loans is at the discretion of the provider.

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Learn more about personal loans

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

Is a personal loan a variable or fixed-rate loan?

Depending on the personal loan lender, you may be able to choose between a fixed and a variable interest rate. But, there are a few distinct differences between the two, so it’s important to weigh up the pros and cons before deciding on what’s right for you.

A fixed interest rate loan gets you the convenience of knowing exactly how much you need to repay each fortnight or month. On the other hand, you generally won’t be able to make lump sum or advanced payments to close your personal loan early - or at least not without a penalty.

With a variable interest rate personal loan, you may be able to get a longer loan repayment term, with the option of paying off the loan early. You typically won’t need to pay any additional charges for an early full repayment either. The potential disadvantage with an interest rate that can change is that your repayment is not entirely predictable, as it can fluctuate with the market. However, you’ll likely have more options as more lenders offer a variable interest rate personal loan.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

Can I merge my personal loan with my home loan?

Yes, you can refinance your home loan and, in the process, merge or consolidate your personal loan and home loan. By doing so, you can lower the number of debts you have, and you may also reduce the total interest you have to pay.

However, you should consult a financial advisor or a mortgage broker to confirm that you are decreasing your total outstanding debt, including interest payments. The repayment term for a home loan can be much longer than that for a personal loan, and by merging the two, you could be repaying a higher amount over the full term.

Does refinancing a personal loan hurt your credit score?

Personal loan refinancing means taking out a new loan with more desirable terms in order to access a more competitive interest rate, longer loan term, better features, or even to consolidate debts.

In some situations, refinancing a personal loan can improve your credit score, while in others, it may have a negative impact. If you refinance multiple loans by consolidating these into one loan, it could improve your credit score as you’ll have only one outstanding debt liability. Your credit may also improve if you consistently pay the instalments on time.

However, applying to refinance with multiple lenders could negatively affect your credit if your applications are rejected. Also, if you delay or default the repayment, your credit score reduces.

What is an unsecured bad credit personal loan?

A bad credit personal loan is ‘unsecured’ when the borrower doesn’t offer up an asset, such as a car or jewellery, as collateral or security. Lenders generally charge higher interest rates on unsecured loans than secured loans.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

What do credit scores have to do with personal loan interest rates?

There is a strong link between credit scores and personal loan interest rates because many lenders use credit scores to help decide what interest rates to offer to potential borrowers.

If you have a higher credit score, lenders will probably classify you as a lower-risk borrower. That means they’ll be keen to win your business, so they may offer you a lower interest rate if you apply for a personal loan.

If you have a lower credit score, lenders will probably classify you as a higher-risk borrower. That means they might be concerned about you defaulting on the loan and costing them money. As a result, they might protect themselves by charging you a higher interest rate.

Are there alternatives to $2000 loans?

If you need to borrow $2000 or less, alternatives to getting a personal loan or payday loan include using a credit card or the redraw facility of your home, car or personal loan.

Before you borrow $2000 on a credit card, remember that interest will continue being charged on what you owe until you clear your credit card balance. To minimise your interest, consider prioritising paying off your credit card.

Before you draw down $2000 in extra repayments from your home, car or personal loan using a redraw facility, note that fees and charges may apply, and drawing money from your loan may mean your loan will take longer to repay, costing you more in total interest.