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If you are thinking of ways to finance a property purchase in your home country or overseas either to eventually retire there or to diversify your investment portfolio, personal loans are one of the best options to do so.
Personal loans are a flexible way to meet personal expenses as lenders tend not to put any restrictions on how to use the loan. Once the lender approves, you are free to use the fund for almost any expenses including debt consolidation, home renovations, weddings, vacations, or buying a foreign property.
It is possible to qualify for personal loans in the United States (U.S.) as immigrants. Yes, the options can be limited but as long as you meet the minimum requirements to borrow, you can get approved for the loans to fund buying property in your home country or overseas.
They are typically unsecured loans, meaning you don't have to provide any collateral such as a home, vehicle, or assets as security for the loans. Secured personal loans where the collateral is required are also provided by lenders.
Personal loans are available through banks, credit unions, and private lenders. Applicants may be able to borrow anywhere from $100 to $100,000 with loan terms between 6 months and 7 years. Once approved, depending on the lender, it can take minutes or days to receive the money.
Similar to other loans such as a car loan, home loan, a personal loan is repaid in installments over time, with interest. The interest rates are between 5% and 20%, depending on several factors such as your credit score, your income or having a cosigner, etc. Apart from paying interest, lenders may charge origination and other fees.
Buying a property is an investment that has the potential for growth in the long run. The property value can increase over time as you develop it further. It is also a proven method to diversify your investment portfolio as owning and renting properties in another currency can reduce the risk of your overall investments.
You can retire outside of the U.S. where the cost of living is way cheaper compared to the U.S. That way, your retirement budget can be more than sufficient to cover your living expenses. Also, in case you have to leave the U.S. due to certain circumstances, having a property in your home country/overseas can be a backup plan.
It can be a source of income. You can rent out the property or build a commercial infrastructure or a factory. It not only can be a source of income for yourself but you can also help your family financially who are settled in your home country.
Owning a property abroad also makes it easier for you to get access to financial services abroad. If you hold something of value in that country, it can serve as a security in case you want to apply for loans or any other financial services.
Your banks may be providing personal loans. Do check with your bank first.
Here are some other options.
SoFi
SoFi is a well-known personal loan provider that offers loans with no fees (no origination fees, prepayment penalties, or late fees) with additional perks like the "unemployment protection" program where you can pause your loan repayment in case of unexpected job loss. The catch is you need a good credit score and stable income to qualify for a loan from SoFi.
Although SoFi doesn't charge late fees, you'll accumulate interest on missing payments and your credit report will show any late payments.
Eligibility:
Loan eligibility will also depend on factors such as good credit score, your monthly income vs. expenses, professional experience, financial history, etc. SoFi services are not available in Mississippi.
Features:
SoFi Loan Application Process
The loan application process is entirely online. You can also use the SoFi app to apply for loans, check balances and manage payments.
To check whether you prequalify, create a username, password and provide the required information. You can reach out to their customer service in case of doubt or should you need help. SoFi will do a hard credit check before finalizing the loan.
After you submit the application and approval is underway, you may receive the fund in a few days after the documents are signed and details are verified.
In case the loan gets rejected, you can ask for an explanation for the rejection. It could be as simple as processing errors. So, do check it.
Stilt
Stilt is an online lender that offers personal loans for immigrants and underserved populations in the U.S. Those with no Social Security number (SSN), or green card or credit card history, or bad credit can consider applying to Stilt. There is also no minimum credit score requirement but you will need to provide other details such as your current employment, education, any available financial history to get approval.
Eligibility:
Features:
Note: A cosigner may improve the chances of loan approval or getting a lower interest rate.
Stilt Loan Application Process
The application process is completely online. You can upload all the necessary documents, provide bank links on Stilt's platform. Stilt says you will receive a call within 24 hours of submitting your completed loan application.
After the verification process, you will receive a loan offer from them. Once the documents are signed, you can expect to receive the fund in 2-3 business days.
Lending Point
Lending point is an online loan provider that targets people with less-than-perfect credit (score low as 590). Any immigrant over the age of 18 years with an SSN, income, and valid bank account can apply for a personal loan. However, the company will evaluate your job, income, and financial history when reviewing your application.
The loans are offered in Washington, D.C., and every state except West Virginia. Because of its quick funding, it is ideal if you require quick cash.
Eligibility:
Features
Lending Point Loan Application Process
Similar to other loans, you can start with Lending Point's pre-qualification process, where you provide details like loan amount, the purpose of the loan, basic personal information to check available options.
Lending point will do a soft credit check and give you offers based on the information provided. After choosing your options, you need to submit the application, required documents to get approved. Your loan will get finalized after verification.
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The first step in applying for a personal loan is to determine how much you need. Find out how much the property will cost and how much more you need to maintain it. Do keep in mind that some lenders have fees that will be deducted from your loan proceeds. Make sure the amount you will get after the deduction covers your needs.
You can use a personal loan calculator to gauge the monthly payment you will need to pay. It is ok if you don't know the exact interest rates or repayment terms the lender might offer, you can play around with the numbers to have an idea about the cost and come up with the loan amount and monthly payment you can afford.
Once you know how much you need, it is time to look for lenders. Since there are several lenders offering personal loans, it is best to do research, shop around and compare to get the most suitable one for your specific needs and borrowing profile.
Get the pre-qualification done with two or more lenders and compare the offers including rates, fees. You may be allowed to do a credit check without affecting your credit score. Use a loan comparison tool to determine which offer is the best for you.
Read more on how to negotiate for better a mortgage rate.
After selecting your loan option, submit the full application and the documents required such as proof of income, proof of residency, photo ID, bank statements, professional history, any financial history, etc. Lenders can do a hard credit check before finalizing the loan.
Once the loan is approved and the final offer is accepted, the loan should be disbursed in a few days or as quickly as the next business day depending on the lender.
It is recommended that you carefully read the terms before submitting your documents.
Finally, you can use the money to buy the property of your choice. The only thing left to do is to pay off the loan. Check when is the first payment due (mostly within 30 days). Set up automatic payments from your checking account so that you don't miss any payments. There are interest rate discounts for automatic payments with some lenders.
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Buying property overseas can be tricky. Here are some things to keep in mind before you do so.
Ownership
Each country has its own rules when it comes to foreigners buying land or property in that country. Some countries have no restrictions on owning property while others do. Find out whether you are eligible for owning a property before you make the investment.
Taxes
Foreign countries may require you to pay taxes on the property you own in their country. In case the property is a source of income, you may have to pay additional taxes on it in the U.S. though it is in another country. You will have to be aware of such expenses if you are going to own property overseas.
If you taking a home loan from a bank in your home country to buy a property there, you can take the tax credit for the interest on the home loan thanks to the Double Tax Avoidance Agreement (DTAA). For example, the U.S. and India have signed the DTAA to avoid double taxation.
Exchange Rates
Depending on the country you are planning to purchase a property, exchange rates might significantly affect your budget. The cost can increase or decrease. If the cost increases, your plan will fail.
For international money transfers, set up alerts for the best exchange rates.
Financing
If you are thinking of getting a mortgage in a foreign country for financing a property overseas, there are easier ways such as applying for a personal loan in the U.S. instead. This is because it is riskier for the overseas lenders hence you will need to put in a huge down payment and also get higher interest rates. In addition to this, you may need to get a life insurance policy to secure your mortgage.
As an immigrant in the U.S., getting a personal loan is not without challenges though it is possible. Fortunately, there are many lenders that cater to the needs of immigrants. Funding for any sort of expenses, be it buying property in your home country or overseas is not a far-off dream. After all, owning property overseas has many perks.
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