Living in the United States as an expat or visa holder comes all sorts of challenges, expenses and cost — from cultural adjustments to legal paperwork, and perhaps most frustratingly, building credit. If you’re new to the U.S. or haven’t been here long, you’ve probably already learned that getting access to financial services can be nearly impossible. So I wanted to help make that a little bit easier.
When you move, you find that no matter what budget you had allocated for the transition, you'll always be finding ways to overspend. Whether it's legal fees, accommodation, or buying the basics that I told you to leave in your home country all over again—everything adds up and especially for those who don't have a currency that's parity with the US Dollar.
In addition to that, it's also difficult to get access to relatively normal bank accounts, especially credit cards, which means that your ability to budget is frustratingly difficult. So this leads you
What expats generally find when they look for personal loans
In my personal experience, when I went out looking for loans or access to credit, the first response was simply “no”. With no credit history, no credit score, and barely a social security number, the door closes before any real questions are asked.
There's no inquiry as to assets, or income, or stability, it's simply “too risky” for the bank or financial institution to look at you as a recipient.
The problem with this is that getting in the door starts the process that ultimately gets you what they're asking for: a profile and a history. You've entered the financial industry's chicken and egg.
Why It’s Hard for Expats to Get Personal Loans?
To give a quick bit of background, so you understand, the U.S. financial system is heavily based on credit scores — something that many new arrivals simply don’t have. If you’ve just moved from Australia, the UK, or anywhere else, your credit history doesn’t carry over, and the focus on ability to borrow here in the US is much more significant than what you might be used to before.
Access to credit builds your score and is not seen as a negative as it's seen in many countries around the world. So without any access to credit and any history you're in a bind:
- Traditional banks may reject your application outright; and
- Even if they accept it, you may get much less favorable terms — think high interest rates and low loan amounts.
This second point is what we see so many people encounter when they do actually get an offer. Outrageously high interest rates that are unfair.
So what can you do to get access to personal credit as a non-citizen?
Thankfully, things are changing and evolving (but not quickly.) With more expats and more access to information and data, companies are now able to look more broadly at your profile and who you actually are, without needing the traditional credit scores and credit history.
It's crucial though that you keep your wits about you. As more people look for access to these products, there are more companies professing to be in your best interests and ultimately trapping you in the same poor rates that we've seen before—so my tip is to look for organizations that have a clear and direct focus and understand your visa type, work status, international employment history, bank accounts in other countries, and the term of your stay.
Also look out for companies that specifically highlight the visa type you have, as all visa classes are seen differently from a financial institutions perspective.
One option for personal loans
One emerging platform that’s designed from the ground up for expats and visa holders is LendKoi. LendKoi was created to serve the millions of immigrants, expats, and temporary residents in the U.S. who need access to credit — without having a long-established credit score, and without taking advantage of them with terrible rates.
Their main focus is that:
- There's no U.S. credit score required
- It's designed specifically for people on visas like E-3, H-1B, L-1, and more
- There are clear loan terms and repayment schedules
- They're focused on responsible lending, not predatory interest rates
I personally got involved and am working with them on their strategy because I think this is a space that needs some help. We're growing steadily with the support of communities and referrals, and it's working wonderfully.
I'm happy to answer your questions about what we're doing and why I got involved, so leave a comment at the bottom or email me directly.
Checklist for things to look out for in a loan for expats
Finally, here's a good list of things to look out for:
- Transparent interest rates (look for the final rate, all inclusive, and repayments per month and the term of the loan—skip past the “as low as” nonsense
- No requirement for a U.S. credit score (some might say they offer it but read past the headlines)
- Visa-holder-friendly terms and eligibility (look for specific language about non-permanent residents)
- Good customer support and real people (ideally with some knowledge of expat life)
- Ask if there will there be a hard credit pull
- Are there prepayment penalties (can you get out of the loan, early)
- Finally (the best one): What documentation exactly you will need to finalize an application (this one is really telling because sometimes they include documents you don't have as an expat, so it's a great way to test).
