Personal loans for work visa holders

Can I get a loan if I’m on a work visa?

Yes, there are some lenders who will provide loans to people in New Zealand on a work visa. There are fewer lenders that will do this, and there are conditions involved, but they are out there.

In fact, you can still apply for a range of loans if you’re in the country on a work visa, including personal loans, debt consolidation loans.

If you’re specifically looking for car finance, check out our guide on car loans for work visa holders.

What are the requirements?

All lenders have their own criteria you must meet in order for them to consider you for a loan. For those on a work visa, a key one is the time you have left on your visa.

There is no set time period for this and each lender has its own assessment criteria. Some lenders will request that you have at least one or two years left on your work visa, while others simply specify that the term of your loan must be complete before the visa you hold expires.

These requirements mean it will be easier to get a personal loan on some NZ work visas than others.

This table shows available work visas along with the maximum length of stay of each:

You can learn more about the different NZ work visas and their terms on the New Zealand Immigration website. 

So based on this information, it would be easier for someone in New Zealand who has a few years left on an Essential Skills Work Visa to successfully apply for a loan than someone who just arrived as a Working Holiday Visa holder, for example.

Some lenders also require people work visa holders to put down a deposit on their loans. Exactly how much this required deposit is will vary, but it could be as much as 20% of the total loan amount.

What else do you need to apply for a personal loan as a work visa holder?

Just as each lender has its own rules on how long you must have left on your work visa, they’ll have criteria for other things too. However, there are some fairly standard requirements that NZ lenders will ask you to meet before they’ll consider lending you money.

• Age: You must be a minimum of 18 years old to get a loan, but some lenders will only lend to those aged 21 and over.
• Credit: Lenders like applicants with good credit. There are lenders who will consider you if your credit history is not perfect, but the worse your credit score is, the more difficult it will be to get a loan.
• Income: Almost all lenders will require that you have a steady income and that you will be able to comfortably make repayments for your loan. However, lenders very rarely specify a minimum income. As you’re in the country as a work visa holder, it means you’re employed and meeting these criteria should not be an issue. If you want to check if you can comfortably make loan repayments, try our personal loan repayment calculator.
• Documentation: To apply for a loan you will need to provide valid identification (an international passport or an NZ driver’s licence will be fine) and bank statements covering the last few months. The lender might accept bank statements from banks outside of New Zealand, but it will make it easier if they are from an NZ bank. 

What fees are involved for a personal loan?

When you take out a loan in New Zealand, there are a few fees that may be involved. These can include:

• An establishment fee: It’s fairly common for lenders to charge a fee for arranging the loan in the first place. This is known as an ‘establishment fee’. Establishment fees can vary considerably, from none at all to as much as $950. Some lenders will charge a smaller or larger establishment fee depending on the amount you want to borrow.
• A broker’s fee: Loan brokers are common in New Zealand and a loan broker may help charge a fee for their services. Like an establishment fee, a broker’s fee can vary from $0 to a few hundred dollars.
• An administration fee: Although it’s less common, some lenders may charge an administration fee for each repayment you make on your loan. This is usually around $3 to $5 per repayment.
• A late payment fee: If you take out a loan, the lender will charge a late payment fee. This fee usually varies from around $15 to $25.
• An early repayment fee: If you want to pay off your personal loan before its full term, most lenders will charge an early repayment fee to cover the extra revenue they missed out on. Once again, this fee can vary depending on the lender and it usually takes into account how early in your loan term you want to pay it off.

Bear in mind that these are only fees that may apply when taking out a loan. Depending on the lender you choose and how you manage your repayments, you may not need to pay any of these fees.

Remember also to factor in the interest rate when choosing a loan. One loan may charge more in fees but offer a lower interest rate than the competition which means you could pay more overall over the full term of the loan.

How do I know if a lender is reputable?

There are some legal requirements lenders must abide by in order to operate in New Zealand. It’s important that any lender you choose meets these requirements.

Lenders must be registered on the Financial Service Providers Register (FSPR). To be listed on this register, lenders must provide details of their company and the services it offers. The lender is also responsible for updating this information if it changes.

All people in charge of the company must also undergo a criminal history check and it is possible to run a lending company with specific criminal convictions.

Secondly, lenders must belong to a dispute resolution scheme (DRS). A DRS is designed to help consumers if they think a financial services provider has acted inappropriately, has breached its legal obligations, or has been irresponsible in its lending practices (among others).

These are the four possible schemes a financial services provider can belong to. We have included their contact details for your reference:

• Banking Ombudsman. Phone: 0800 805 950, email: [email protected]
• Insurance and Financial Services Ombudsman. Phone: 0800 888 202, email: [email protected]
• Financial Services Complaints. Phone: 0800 347 257, email: [email protected]
• Financial Dispute Resolution Service. Phone: 0508 337 337, email: [email protected].

Before choosing a lender, make sure they meet these legal requirements as a minimum. Note that on Banked, we only list reputable lenders and brokers that meet these criteria.

5 ways to improve your chances of getting a loan

You can increase your chances of getting a personal loan on a work visa if you minimise the risk to the lender.

1. Secure the loan

A ‘secured’ loan is one that requires you to provide collateral. For car loans, this collateral is usually the car you’re buying, but many lenders can accept different types of collateral.

There is less risk involved for lenders with a secured loan as they can simply use the collateral to cover the outstanding amount. Because it is less risky, lenders are more likely to accept a secured loan application, especially for larger amounts.

Secured loans also have lower interest rates, meaning your loan will be cheaper and you will have to pay back less money.

2. Apply for a joint loan

A joint personal loan is one in which two (or possibly more) people are financially responsible for the loan.

Joint personal loans are also less risky for lenders because they have extra reassurance that the loan will be paid back, even if one person is unable to for some reason. As a result, lenders will be more likely to lend you money if you are applying with someone else.

The person you are applying with can be a partner, a friend, or a family member. Bear in mind that the same loan criteria that apply to individual applications also apply to joint applications. Both must be 18 years old or over, both must have identification and bank statements, and so on.

3. Choose a loan term that ends well before your visa expires

As mentioned earlier, you just have enough time left on your visa to cover the entirety of your loan term. For example, if you want a 2-year loan, you’ll need to have a minimum of 2 years left on your visa for the lender to consider your application.

But the more time you will have left on your visa after the term ends, the more comfortable the lender will be giving you the money.

Even if you expect the visa you hold to be extended, a lender will be less likely to do business with you if your visa is set to expire shortly after the loan is due to be paid back in full.

4. Ask for a smaller amount

It’s likely you will be more successful applying for a small loan than a large one. A larger loan involves more risk for the lender, especially if that loan is unsecured.

If you have already been unsuccessful with a loan application, or you think getting a loan might be difficult, think about applying for the lowest possible amount that will cover your needs.

This is good practice in general as it will minimise your total debt and make paying off the loan easier.

5. Try your current bank

It may be easier to successfully apply for a loan if you already have a relationship with the lender.

Your bank will already have access to your bank statements, will have a sense of your creditworthiness, and it may be more inclined to help an existing customer.

It should be quite simple to arrange a conversation with a representative for your bank about your lending needs, and they may be able to give you a good idea of your personal chances of a successful application before undertaking the formal process.