Applying for a Loan in the US as an Expat: Everything You Need to Know

If you’re an expat living in the US, and you need to take out a personal loan, you may be wondering what the process is like. How difficult will it be to get approved? What documents do you need? In this article, we’ll walk you through the entire process of applying for a loan in the US as an expat. We’ll cover everything from start to finish so that you can feel confident and prepared when it’s time to borrow money.

First and foremost, it’s important to understand that the process of applying for a loan in the US as an expat is not significantly different from the process of applying for a loan as a US citizen. The same basic steps apply: you’ll need to fill out an application, provide some documentation, and undergo a credit check. However, there are a few key things to keep in mind if you’re an expat.

Second, before you even consider applying for a loan, you need to build up your credit score. Check out my post about going from zero credit history to a credit score of 720+ in about five months. If you don’t have a strong credit score, your chances of getting approved for a loan are slim to none.

Third, even with a credit score of 740+ after 8-9 months of living in the US, your credit history is likely still poor because your oldest financial account in the US is less than one year old. So that means you will likely be rejected when applying for a loan. Loan application and decision are mostly done online now so it is the algorithm that will determine your approval, not a human (with subjective feeling).

There is just not enough history about you (or high quality signals) as an individual for the algorithm to do an assessment.

So what did I do? Knowing that the algorithm/machine needs more data points, and more signals so that it can evaluate my creditworthiness, I purposely keep many of my financial assets and financial activities with a single financial institution. This way, they will have a lot more information about me than normal. Basically, I try to feed more data to the algorithm/machine than what it normally has access to.

What type of financial assets or financial activities we are talking about here? Below is my answer based on common sense.

  • Direct deposit of your salary.
  • Credit card usage and on time full balance payment.
  • etc…

So what was the result? As expected, when I applied for a loan, a typical financial institution said no because of the lack of credit history. However, the financial institution that I purposely tried to give more data, more signals to say Yes.

Before you agree to the loan, make sure you understand the interest rate and fees associated with each loan. Read the fine print before signing any loan documents. This is especially important if you’re an expat, because there may be some clauses in the contract that you don’t fully understand. If you have any questions, ask the loan officer before you sign anything.

Taking out a personal loan as an expat doesn’t have to be complicated or stressful. Just follow these simple steps and you’ll be on your way to borrowing money in no time. Good luck!



P.S: I recently created a group on Facebook called Asian Expats in the US so that we can share/discuss more tips directly. Feel free to join.

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