A loan is sometimes the quickest option to get cash when you need money. As a foreigner living in the UK, you might have once asked yourself if you could get a loan in the UK.
A non-UK citizen can get a loan from lenders within the UK if the borrower has resided in the UK for an extended period and meets all the lender’s requirements.
We’ll discuss all the significant things lenders require from non-UK residents below. So we urge you to pay attention to all the information in this article because the information here will help you discover many things about loan eligibility.
Can a Foreigner Get a Loan?
Your citizenship status isn’t a significant factor that lenders use to determine your eligibility for a UK loan. Hence, Non-UK citizens can get a loan in the UK. However, you should note that your period of stay in the UK will determine whether you are eligible for a loan or not.
Foreigners who haven’t lived in the UK for at least a year can’t obtain a loan. A lack of credit history is the primary reason this category of people can’t get a loan in the UK. Agencies known as Credit Reference Agencies (CRAs) keep a record of every UK resident who borrows money. \
The purpose of the record is to identify people who pay back the money they borrow. The CRAs have a record of almost everyone in the UK except those who recently moved into the UK. Since the CRAs don’t have a record of new residents, lenders also don’t have any records to refer to when a new UK resident wants to get a loan.
What Loans Can a Foreigner Get in the UK?
As earlier said, non-UK residents can obtain a loan in the UK. Here are the examples of loans a foreigner can get in the UK:
Refugee integration loan
UK lenders understand that refugees are usually not financially buoyant, so they give them a chance to get a loan even when the immigrant hasn’t stayed in the country for a long time. This kind of loan aims to help refugees afford the cost of rent, household bills, or formal and informal education.
£ 500 is the highest amount you can obtain when you apply as an individual. Kindly note that you must be 18 years or older and be a refugee or have humanitarian protection to qualify for this loan.
Personal loan
Non-UK residents can get a personal loan from lenders if they have resided in the country for at least a year. A high credit score, high monthly income, and low Debt-to-Income (DTI) ratio will increase your chance of getting a personal loan.
Mortgage
A very few UK lenders give mortgages to non-UK citizens. Your chance of getting a mortgage loan will increase if you do the following:
- Register a UK bank account with a UK address
- Use a UK credit card
- Reside in the UK for at least one-year
Loans from specialist lenders
Specialist lenders have flexible requirements and sometimes give loans to individuals who don’t qualify for mortgage loans. Non-UK citizens ineligible for mortgage loans may be eligible for specialists’ loans.
Short term loan
A short-term loan is another kind of loan non-UK citizens can get. As a non-UK citizen, you must have lived in the UK for a long time to be eligible for this loan.
While most lenders expect you to have lived in the UK for at least three years, a few will give you a loan if you have lived in the country for just a year. No lender will give you a loan if you haven’t stayed in the UK for at least a year.
You shouldn’t hesitate to contact a dependable team of immigration lawyers like total.law if you don’t know how to prove your duration of stay in the UK.
What Credit Scores Do You Need to Get a Loan in the UK and How to Improve It?
One of the main things lenders consider before giving a loan is the credit score. You must note that a single person can have up to three credit scores simultaneously since the UK’s three main Credit Reference Agencies use different scales. The table below summarizes the minimum credit scores a borrower must have to get a loan in the UK.
| Equifax’s scale | Experian scale | TransUnion scale |
| 671 or above | 881 or above | 604 or above |
Meanwhile, if you notice that your credits score is low, you should do the following to improve your scores:
Register to Vote
Your credit score will improve significantly when your name appears on the electoral roll. Kindly note that only people from commonwealth countries can register to vote in the UK. So if you aren’t from one of the commonwealth countries, you should try only the other options below.
Get a permanent UK address
Having a permanent UK address will go a long way to improving your credit score. It will allow you to open a current bank account in the UK.
Use credit builder cards and apps
Credit builder cards and a few credit builder applications can improve your credit score if you use them consistently.
Get a good job
Your credit score will improve if you provide proof of employment and high income. Your income is significant to lenders, especially when no collateral is involved in your loan. So, if you want a lender to believe you are a low-risk borrower, you need to prove that you can pay back the money at the right time.
Will the Credit Score You Have in Your Country Count in the UK?
The credit score you have in your country doesn’t count in the UK. The CRAs don’t have access to the credit history built outside the UK. Consequently, CRAs will have to build a new record for you, and it may take a while to create such a record.
Can International Students Get Loans in the UK?
International students from EU countries or European Economic Area can get student loans in the UK. If you are an international student not from EU country, you should seek alternatives like grants, scholarships, and work-study programs instead of student loans.
Conclusion
Non-UK citizens can get a loan in the UK if they meet all the conditions attached to the loan they are applying for. So if you are a foreigner, you can apply for a loan once it has been verified that you meet all the necessary conditions for the loan.
