You all know that the rudimentary conditions to qualify for a loan include being a citizen of a country, an adult, and having an income source. Not until you meet these conditions will you be able to get the nod for a loan. Unfortunately, emergencies do not evaluate whether you are a citizen or an immigrant of a country before knocking on your door.

Unfortunately, applying for a loan as an immigrant is no duck soup. A real challenge is to prove your credibility. Since you are an immigrant, you may not have a permanent address. Your lender will certainly check your credit score to know whether you have been committed to your past payments.

However, the fact is that your credit history cannot be transferred from one country to another. There are a few reasons why this does not work. The law of the county where you have moved does not permit the transfer of your credit history and score across borders.

Further credit reporting procedures vary by country, so it is possible that an immigrant country may not comply with that reporting. Every country uses different details to determine your credit score. It is likely that some of the details are not factored into by your immigrant country that your home country considers while determining your credit rating.

What kinds of loan options are available for you as an immigrant?

Here are some of the loan options you can think of considering when you are an immigrant:

  • Refugee integration loan

Refugee integration loans are government-backed loans in the UK that can be applied either by yourself or with your partner if you need money to pay for rent, rent deposit, household items, education, basic living costs, training for work and other unforeseen expenses as well. Still, these loans cannot be used to pay off debts and travel costs.

To apply for these loans, you should have come of age and be a refugee or have humanitarian protection or a dependent of a refugee or someone with this protection. You are not eligible for these loans if you have already had these loans before.

These loans are interest-free, which means you will only pay back what you borrowed. You can borrow between £100 and £500, while the maximum borrowing sum can go up to £780 if you are applying with your partner.

Once the application is approved, the money will be sent directly to your bank account, which you can use only for a reason you state in your application. Bear in mind that you can be asked how you spend money. If you do not use it for the reason you state, you will have to pay it off in full. However, in normal circumstances, you do not have to start paying back the debt until 6 weeks.

Your repayments will be decided on your financial circumstances. The size of monthly instalments can go up if there is a change in the structure of your benefits or you start working.

  • Private loans

Seldom do private lenders sign off on small loans to immigrants. There are several reasons why lending money involves a very high risk. However, there are a few private lenders who provide small personal loans to immigrants to help them meet their small emergency expenses.

It is quite obvious that your credit rating will not play a major role in deciding whether to approve your loan application or not, but your lender will look over your work history. Whether you are a part-time employee or a full-time employee, your current employment should be at least 6 months old. Your chances of approval are even higher when your work history is long, and you prove that you do not switch jobs frequently. Your stability can make it or break it.

Apart from that, you will need a fixed address in the UK. There is no possibility of getting the nod for a small loan from a lender if you do not have a fixed address. Lenders generally require council tax bills in your name at that address. Note that the size of instant cash loans offered by direct lenders will hardly be beyond £500 due to very high risk.

  • HSBC credit cards

HSBC is the first international bank in the UK to permit immigrants with no UK credit history to apply for credit cards. There is no doubt that opening a credit card is a must as it gives you a chance to build your credit rating, which you will need to set up essential services. You cannot apply for a loan unless you have a credit history, and you cannot build your credit rating unless you apply for a loan. It is a catch-22 situation.

Therefore, HSBC Bank leverages your credit history built up overseas to help you open a credit card. The bank hinges on Nova Credit Passport, which is responsible for collecting credit data of immigrants from their countries and calculating equivalent credit scores that lenders and other financial service providers in the UK can use.

How to build a credit score as an immigrant in the UK?

Though there are options you can consider when you need money for small emergencies even if you are not a permanent resident in the UK, it does not mean that you do not have think of building your credit history. Remember that the aforementioned loans are not guaranteed at all. Chances are you fail to get the green light for your loan. You may need to apply for big loans down the line and that time you will face hurdles to get approval for unsecured loans for bad credit. Here are the tips to help you build a credit score:

  • Register to vote. Having your name on the electoral roll will improve your chances, as this is what a lender must look at before giving the approval.
  • Open a bank account and pay off all your bills on time.
  • A credit card comes in handy when you keep making small purchases and paying off the balance in full.
  • Make sure you maintain a low credit utilisation ratio. It must not be more than 30%.
  • Check your credit report regularly, as you might be the victim of identity theft. This can take a toll on your credit score. Keep an eye on false accounts and information as well. Get them rectified if you spot any.

You will have to be patient when it comes to building a credit history.

The bottom line

Applying for a loan as an immigrant is not so easy. Though there are a few options, there is no guarantee that you will get approval. You should always try to build your credit score. If your finances are tight, you should try to get extra work. A part-time job or freelancing can help you make some money.

Look around your house and see if you have any items that have seen better days. Cash-out them. This extra money can help make ends meet. Consider claiming government benefits if you are eligible.