Loan when moving overseas

bairn7

Hi all

I think I know the answer to this, but thought I would ask.

I'm moving permanently to Canada at the end of the year. Unfortunately, credit history doesn't transfer so I'm starting again from scratch. I will need a car so I'll either have to buy a banger with cash or get a loan.

Loans are available to new immigrants with no credit history but the APR is in the region of 10-12%.

I'm guessing I couldn't take out a loan here, with my good credit history, for a lower rate and pay it off partly with a reserve left here (to cover a couple of years of repayments) in the UK and after a couple of years with a transfer from my Canadian salary (when I get a job!)?

If I take out a loan or credit card, and leave the country permanently, will the lender generally require full repayment when I leave?

jonesMUFCforever

So as it stands now you do not have a job in Canada - no salary = no loan anywhere.

bairn7

jonesMUFCforever wrote: »

So as it stands now you do not have a job in Canada - no salary = no loan anywhere.

As it stands, I have a full time job in the UK.

I do not have a job lined up in Canada (despite my continued efforts) although I am confident of obtaining a job once in Canada, and I am allowing around 3 or 4 months for this as a 'worst-case'.

Several Canadian banks (including RBC and Scotiabank) specifically offer car loans to new immigrants with no credit as an incentive to become a customer. But the rates are 10-12% as I have already said.

So, relying on Canadian lenders, that is my only immediate option. I could of course take out a UK loan now at c3-4% in anticipation of moving to Canada and needing a car. I don't know if I can legitimately do this though (although my guess is that I can't). That is my question.

Kentish_Dave

You are going to need to rely on your savings, or start saving now, as you can’t borrow in the UK.

Why is paying 12% a problem? Borrow four thousand dollars over a year and you’ll pay around $250 in interest, or $20 a month.

jonesMUFCforever

bairn7 wrote: »

As it stands, I have a full time job in the UK.

I do not have a job lined up in Canada (despite my continued efforts) although I am confident of obtaining a job once in Canada, and I am allowing around 3 or 4 months for this as a 'worst-case'.

Several Canadian banks (including RBC and Scotiabank) specifically offer car loans to new immigrants with no credit as an incentive to become a customer. But the rates are 10-12% as I have already said.

So, relying on Canadian lenders, that is my only immediate option. I could of course take out a UK loan now at c3-4% in anticipation of moving to Canada and needing a car. I don't know if I can legitimately do this though (although my guess is that I can't). That is my question.

One of the questions you may be asked on a loan application will be something like 'are there any change of circumstances due in next 12 months' or something similar. If you answer honestly you will be declined - if you don't you will be making a fraudulent application.
If you have savings to repay 1-2 years repayments do you actually need a loan? Can you not use the savings?

bairn7

I have the money for a car but the issue is I only have a set amount to last me until I find a job and buying a car outright would use up a significant amount of the savings I have. That's why I want to spread out my costs.

Another alternative is to do a money transfer from my credit card now (I have a promotional rate).

My main question is would I have to repay any UK loan or credit card balance when I move abroad? Are UK lenders likely to insist on full repayment?

foxy-stoat

bairn7 wrote: »

My main question is would I have to repay any UK loan or credit card balance when I move abroad? Are UK lenders likely to insist on full repayment?

Arrrrr I get it now....You want to know if you can borrow money with the intention of moving abroad and not paying it all back.

I am pretty sure if you take out a loan with the intention of moving abroad you are still liable to repay the debt, I am also pretty sure that would be classed as fraud if you are intent on doing this.

Must be a wind up though.

bairn7

foxy-stoat wrote: »

Arrrrr I get it now....You want to know if you can borrow money with the intention of moving abroad and not paying it all back.

I am pretty sure if you take out a loan with the intention of moving abroad you are still liable to repay the debt, I am also pretty sure that would be classed as fraud if you are intent on doing this.

Must be a wind up though.

Sadly, you're nowhere close to getting it.


I currently have a UK job and good credit history. I will have no credit history when I arrive in Canada. Therefore, I'm wondering if I can take out a loan just now in the UK and use it when I move to Canada. Doing so will allow me to have a loan at a decent rate rather than a penal rate of a Canadian loan (assuming I can get one with my Canadian bank).


I FULLY INTEND TO REPAY ANY AND ALL DEBTS IN THE UK.


I'm wondering whether moving abroad will cause any UK lender to require immediate repayment in full (eg if no longer being a UK resident causes a breach of the credit agreement or something along those lines). If not, taking a UK loan (or balance transfer) now would make sense from a money saving perspective (that is what this forum is about afterall). I would then make minimum payments, or what I can, at regular intervals until such time as I have a job in Canada and can repay the loan.


I don't see how it would be fraud unless they ask me to declare that I will remain a UK resident for the duration of the loan or if I'm asked about any upcoming material changes to my position. In which case I will not proceed.


For example, I can currently do a money transfer of up to £6000 from my credit card at a rate of 0% until March 2021 (with a 1.9% transfer fee). The only requirement appears to be that I have a UK current account in my name (I've gone through the process of inputting the information right up to the 'confirm transfer' and there are no other references or links to other terms. If I do this now, is it likely that the credit card company will require me to repay this amount in full when I leave the country? I know it will depend on the specific lender but I'm wondering if this is perhaps a standard term.


Sadly, people always seem to think the worst of people on here.

eddddy

bairn7 wrote: »

My main question is would I have to repay any UK loan or credit card balance when I move abroad? Are UK lenders likely to insist on full repayment?

Equifax say:

If you’re moving abroad temporarily, for example, for a couple of years, it might not necessarily be the case that you need close all of your accounts. If you can keep them open and active, they’ll continue to be part of your credit history. This includes bank accounts and credit cards. If you are using a credit card abroad, however, you should notify the card issuer to avoid any problems with suspected identity theft.

Link: https://www.equifax.co.uk/resources/loans_and_credit/what-happens-to-credit-history-when-moving-abroad.html

So maybe, you're going temporarily for a year or two in the first instance, to see how things pan out.

If all goes well, you might change your mind, and decide to stay permanently (and maybe close your UK accounts at that point).

FWIW, a number of years ago, friends of mine went to live and work in Paris for a year, and kept all their UK accounts active.

I recall that Barclaycard were sending statements etc direct to the Paris address - so they knew that the cardholder was living outside the UK. (That was before online statements were a big thing.)

But things may have changed.

Kentish_Dave

You’re doing well to get enough points to emigrate if you don’t have a job lined up, are you sure that you qualify?

bairn7

jeepjunkie wrote: »

Do the obvious and ask the lender then formulate your plan...

But, as you are in full time employment why cant you save more?

Loan repayments/savings come from the same source only one costs you more in the longer term.

I can, and will, save until the end of the year. But it doesn't change the fact that having to buy a car outright (especially one that will get me through the winter) will use up a significant amount of my savings.


Chances are all will be fine and I'll get a job within a few months. But I'd rather keep as much of my savings as possible to give me the biggest buffer I can manage until a job is secured.