Do foreign nationals qualify for loans in South Africa?

Foreign nationals – non-South African citizens living or working in South Africa – may, at times, need to borrow money. However, getting a loan from a reputable institution can be challenging without a local credit history.

We find out what it takes for foreign nationals to qualify for loans in South Africa, highlight important factors to consider, and explain the application process.

Tip: Check whether you qualify for a personal loan through JustMoney.

Can a foreign national get a loan in South Africa?

The short answer is yes – but some providers have stricter lending criteria than others. 

Most lenders require proof of a valid residency visa and/or work permit, stable income, local bank account, and local credit history.

If you’re a non-South African resident applying for a loan, Standard Bank, for example, requires you to:

• Be between 18 and 64 years old
• Have a valid passport and proof of South African residency
• Have a valid work (or residency) permit
• Have proof of stable income (three months’ payslips) and ideally be employed for at least six months
• Have a salary paid directly into your bank account

Key considerations for foreign nationals applying for a loan

When applying for a loan as a foreign national, the following factors will come into play.

• Your credit history: Providers prefer lending to applicants with a financial track record in South Africa.
• Visa validity and expiry date: You may be offered a shorter loan term, depending on your visa expiry date.
• Interest rates: Some providers charge higher rates or require larger deposits to reduce their risk.

What can foreign nationals expect in their interactions with banks?

Banks must treat you, as a foreign national, the same way they would treat any other customer, without discrimination.

As with any other applicant, you’ll need to prove your identity and source of funds. Additionally, you’ll have to show documentation proving your residency and employment status in South Africa.

Banking regulations for foreign nationals

As a foreign national, you have the right to access South African banking services, but key regulatory bodies and structures will be involved, as follows.

• The Financial Intelligence Centre Act (FICA) will require the bank to verify your identity and report any suspicious transactions.
• The Currency and Exchanges Act controls the movement of money in and out of the country.  
• The Protection of Personal Information Act (POPIA) protects private information and sets rules for how banks handle your data.
• The National Credit Act (NCA) regulates lending in South Africa.

Home loans for foreign nationals

As a foreign national, you may apply for a home loan in South Africa, but lending institutions will look at various factors when they consider your borrowing risk.

Absa’s home loans department, for example, lists the following criteria:

• Proof of income (an employment contract or salary slip), which is verified to determine your ability to repay the loan. 
• The terms of your residence in South Africa. This could lead to a shorter repayment period, and, consequently, higher repayment amounts and/or a higher initial deposit.
• The renewal of your residency permit may not be guaranteed, affecting your future employment and, hence, your ability to service your debt.
• Regulatory requirements, such as South African Reserve Bank approval, FICA verification, and exchange control regulations, as well as anti-money-laundering legislation and proof of your funding sources, all affect your loan eligibility.

As with other loan applications, you’ll have to show a valid passport, employment contract, and work permit if you’re a non-South African living in the country on a visa. Other requirements specific to a home loan application include:

• A completed, signed copy of an offer to purchase – that is, a document of intent to purchase a property.
• Proof of income – three months for full-time employment, or six months if it includes overtime/commission.
• If applicable, marriage or divorce certificates, verified by an attorney.

Bear in mind that there’s a difference between foreign nationals who are residents and have the necessary documentation to live in South Africa, and non-residents who are not working and living in South Africa.

Non-resident foreign nationals may obtain home loans under certain circumstances, but can only qualify for a loan of 50% of the purchase price. They must finance the other 50% of the purchase price with an upfront deposit, transferred to South Africa from a foreign source.

Stanton Govender, FNB executive head: foreign nationals and non-resident banking, says non-South Africans face the same loan approval process as South African applicants.

As with any other prospective homeowner, make sure you meet your chosen bank’s minimum income requirement before applying for a home loan. In FNB’s case, you must earn at least R25,000 a month.

When all criteria are met, FNB will offer non-resident foreign nationals home loans amounting to up to 50% of the property value, with a 50% deposit originating from foreign funds. This only applies to new properties.

Vehicle financing for foreign nationals

As a foreign national in South Africa, you may apply for vehicle financing if you are permanently employed.

The terms of your loan will depend on the duration of your work permit. For example, if your work permit is valid for five years, the repayment period can be a maximum of five years.

Vehicle financing terms are also limited by the expiry dates of passports, visas, and employment contracts, which can make it more challenging to secure long-term financing.

Required documents include:

• Passport
• Verified, valid work permit/residency visa
• Signed employment contract
• Proof of address
• Offer to purchase
• Proof of income
• Valid driver’s licence

Even if you have all these documents, approval is not guaranteed.

Lebogang Gaoaketse, WesBank’s head of marketing and communication, says applicants must meet affordability criteria and have a good credit record. WesBank does not permit balloon payments, which involve paying a large sum at the end of the loan period, for foreign nationals.

Credit cards for foreign nationals

Apart from qualifying for loans, foreign nationals living and working in South Africa are eligible to apply for credit cards from the main South African banks.

You’ll need a good credit history to qualify, and income requirements vary by bank – for example, the minimum at Nedbank is R5,500 a month.

According to Absa’s credit card division, the following supporting documents are required:

• Valid passport – this is only accepted at certain bank branches
• Work permit/visa for a minimum of two years from the date of application
• Proof of address not older than three months
• Proof of income – this may include bank statements or payslips, not older than three months

The bank will assess your income, expenses, and existing credit to ensure your financial stability.

If you lack a local credit history, consider opening a current account, as it helps build credit automatically and the credit bureaus reflect this information.

You can also apply for a retail store account, as some stores accept applicants with little or no credit history.

To improve your chances, start with an entry-level store card or opt for a lower credit limit – it’s easier to qualify for such products.   

Personal loans for foreign nationals

Different banks or credit providers have varying requirements. Some offer personal loans to foreign nationals, while others require a South African ID.

As a foreign national living in South Africa, you may also qualify for other types of loans, depending on the provider. However, you will generally not qualify for an overdraft or revolving credit.

Absa’s personal loans division, for example, says foreign nationals applying for a loan must:

• Be between the ages of 18 and 64
• Have a valid residency permit
• Have a valid work permit
• Be permanently employed or self-employed
• Have a salary paid directly into their South African bank account

You should also be creditworthy with an overall low-risk profile, says an Absa spokesperson.

Challenges for foreign nationals when applying for a loan

As a non-South African citizen, you may encounter additional challenges that make it harder to secure a loan. These may include the following.

Language and communication barriers

Banks typically require English translations of documents in foreign languages, and it may be difficult to understand unfamiliar or complex financial or legal terms.

In addition, the South African banking and credit systems may not be familiar to you.

Perceived risk and illegal discrimination

You may find that lenders question your financial credentials or charge you higher interest rates due to perceived risk.

A reference letter from your South African employer or your bank in your home country may help to establish your credibility.

Remember that banks need to treat you like any other customer and follow set regulatory processes, which are in your favour if you meet the criteria.

Understanding local financial systems and regulations

As a non-South African, you may find local loan fees, terms and conditions, and other bank requirements, confusing.

Chat with a bank consultant to learn more about local banking practices and loan terms.

It’s a good idea to keep your documents updated and keep organised financial records. Have proof of your foreign banking and credit history on hand, if possible.

To build your financial history in South Africa, open a bank account, deposit your income regularly, build up a local transaction history, and keep good records of rental and other payments.

How banks assess creditworthiness for foreign nationals

Credit history provides banks with information about your creditworthiness, indicating whether you pay in full and on time, and can honour your financial commitments.

The better your credit history, the more likely you are to secure a loan and negotiate better loan terms, such as lower interest rates.

However, if you are a foreign national, South African banks may struggle to access your credit history. This is because national credit bureaus do not share data across countries, and each country has its own credit scoring system. Many countries also have strict data protection laws.

As a result, banks may not have the information they need to assess whether you are financially reliable. Thus, you may be considered a lending risk.

To become creditworthy to South African banks, you should try to build up a local credit history.

This can be done by:

• Opening a current bank account
• Making credit payments on time
• Using credit responsibly and not “maxing out” your limits 

Additional factors to consider when applying for a loan

As already stated, banks will look at your residency visa and work permit validity – loan terms can’t exceed your permit’s duration. They will also consider any risk of you leaving the country without repaying the loan.

In addition, banks will take into account:

• Your job stability. The bank will assess whether your employment is secure.
• Your income. The bank will verify your source of income and consider any currency fluctuations.
• Cross-border asset checks. This is to confirm your financial stability.
• Compliance with FICA and anti-money laundering rules. This is a legal requirement to prevent fraud.

Tips for foreign nationals applying for loans in South Africa

There are some steps you can follow to improve your chances of securing a loan.

How to improve your chances of loan approval as a foreign national

Govender explains that foreign nationals undergo the same credit scoring and assessment process as locals.

“Building a sufficient credit bureau record may assist foreign nationals to qualify for the desired credit products,” he says.

“In addition, foreign national customers must ensure that their FICA documentation (passport, permit/visa) is valid, and that this information is updated with the bank.”

Your chances of success are good if you:

• Open a transactional/current account and make regular deposits to show financial stability
• Keep FICA documents updated with the bank
• Maintain steady employment and pay rent and utility bills on time
• Build a local credit history, starting with a store or low-limit credit card
• Can provide extra documents, such as tax returns, proof of assets, rental agreements, and letters of recommendation

Building credit step by step improves your loan approval chances and helps secure better financial opportunities.

Common mistakes to avoid when applying for a loan 

Avoid these pitfalls to improve your chances of having a loan application approved:

• Not researching the requirements of different banks
• Failing to build relationships with local banks
• Providing expired, incomplete, or untranslated documents
• Missing document renewal deadlines
• Providing inconsistent information
• Not keeping copies of submitted documents
• Providing inadequate proof of income or employment
• Failing to update contact details
• Underestimating deposit amounts and overall costs
• Misunderstanding loan terms and repayment conditions
• Practising irregular banking habits – e.g., infrequent income deposits, poor account management
• Applying for too many loans at once
• Not building a local credit history
• Ignoring exchange rates and currency fluctuations

Remember, every financial institution and loan provider has its own requirements and processes. Do your research and contact your preferred institution or provider for further information.

Tip: Need a cash boost? Check if you qualify, and apply for a personal loan.