South Africa has a large international immigrant community that lives and works there, and they, like most foreign nationals, typically experience challenges in obtaining money because most lenders are afraid to lend to them.
Because most nationalities have work permits that are only valid for a limited period, establishing a dependable or established credit record is challenging.
For example, if you have a 4 or 5 year work visa, you may have trouble obtaining loans for more than 5 years because lenders may not have access to records demonstrating that you repaid a previous obligation of the same term.
However, this is not the end of the road, as there are numerous institutions that provide loans to foreign immigrants working in South Africa, which can include personal loans, vehicle loans, home loans, and so on.
Personal Loans
Many organizations are willing to provide personal loans to foreign individuals, and depending on the length of your work visa, you are more likely to earn higher interest rates than South African nationals.
Most of the big banks, such as ABSA, FNB, Nedbank, and Standard Bank, can provide personal loans to foreign nationals, but these will be subject to certain conditions, such as lower loan amounts, shorter repayment terms, and generally much higher interest rates, especially for those with work permits.
Foreigners having permanent residency may be eligible for lengthier and more flexible loan terms because their permits allow them to stay in South Africa eternally and qualify for the maximum loan amounts allowed by these banks.
Vehicle Loans
Since most vehicle loans are mostly for 5 years, foreign nationals can qualify as long as their permit remains valid when the loan expires. There are other options for decreasing the payback period, but they will result in much higher repayment payments and insurance premiums.
Home Loans
According to South African exchange control legislation, foreign buyers who are not working in South Africa are not entitled to more than half of the purchase price, and the balance must be paid in cash.
Foreigners with residency or work permits who have been in the country for four years or more may be eligible for further money. The deposit must be deposited into a South African bank account via the Reserve Bank.
You can apply for a home loan as a foreigner directly at any bank or through the services of a mortgage broker. If you’re new to the South African property market and are unfamiliar with the country’s property laws and financial regulations, having a mortgage broker on your side can be beneficial.
If you can establish that you have a South African resident or work visa, the terms tend to ease slightly, however this varies per bank. If you don’t have a bank account in South Africa, certain lenders may need you to obtain one so that your mortgage payments can be debited.
Various banks, including ABSA, FNB, Standard Bank, and Nedbank, offer house loan packages that can assist foreign nationals in purchasing property in South Africa.
Loan requirements for Foreign Nationals
When applying for loans as a foreign national, most lenders will require you to provide your payslip, employment contract, three months of bank statements, evidence of address, and maybe an income-expense breakdown.
