How Foreigners Can Obtain Loans in South Africa

If you’re a foreigner living in South Africa and in need of a loan, you may have encountered challenges due to the lack of a South African identity document. While it can be frustrating, there are ways for foreigners to successfully apply for loans in South Africa. In this article, we will explore the hurdles faced by foreigners, the importance of building a credit record, and the steps you can take to improve your chances of loan approval.

The Hurdles Faced by Foreigners

Foreigners seeking loans in South Africa often struggle due to the absence of a credit history. Lending institutions are cautious about granting loans to individuals without a proven track record of responsible borrowing. While having a solid employment contract and confirmation of employment can help, it is still challenging to convince lenders to approve your loan application.

The Importance of Building a Credit Record

A credit record plays a crucial role in loan approval. It demonstrates your ability to manage credit responsibly and gives lenders confidence in your repayment capabilities. Unfortunately, as a foreigner, you may not have an existing credit record in South Africa. However, there are steps you can take to build a good credit record and increase your chances of loan approval.

How to Attain a Good Credit Record in South Africa

Open a Bank Account

The first step for foreigners is to open a bank account with a reputable bank in South Africa. Seek advice on the best banks that offer competitive rates and excellent customer service. Having a bank account is essential for establishing your financial presence in the country.

Apply for a Credit Card

Once you have a bank account, consider applying for a credit card. This allows you to make purchases and build a credit history. Use your credit card responsibly by making timely payments and keeping your balances low.

Open a Clothing Account

Another avenue to build credit is by opening a clothing account. Many retailers offer credit facilities that allow you to make purchases and pay them off over time. Similar to a credit card, ensure you make timely payments to demonstrate your creditworthiness.

Take Out a Mortgage or Car Loan

If you’re in need of a mortgage or car loan, consider applying for one. These types of loans involve significant amounts and can help establish a solid credit history. Make sure to meet your repayment obligations diligently to strengthen your credit record.

Maintain Timely Repayments

The key to building a good credit record is maintaining timely repayments on all your credit accounts. Pay your bills in full and on time every month, ensuring that you never fall behind. Consistency in repayment behavior will show lenders that you can be trusted with credit.

Allow Sufficient Time

Building a credit record takes time. The longer you have a positive credit history, the more likely you are to be approved for larger loan amounts. Therefore, it’s important to start building your credit as soon as possible, even if you don’t currently need a loan.

Understand Exchange-Control Policies

It’s important to familiarize yourself with the exchange-control policies enforced by the South African Reserve Bank (SARB). These policies govern the credit awarded to foreigners. If you possess a valid work permit in the country, you have the right to apply for a personal loan. While the process may be challenging, it is not impossible.

Policies of Various Banks

Different banks in South Africa have varying policies when it comes to loan applications from foreigners without a valid ID document. It’s crucial to understand the differences between these policies to choose the right bank for your specific situation. Let’s take a look at how some banks handle loan applications from foreigners:

  • Nedbank: Nedbank follows the rules of the SARB exchange policy. If you have a valid work permit and repay the loan in full before leaving the country, they will lend you the money.
  • FNB: FNB does not provide loans to individuals without a South African ID number. It’s advisable to avoid FNB if you’re a foreigner seeking a loan.


While obtaining a loan as a foreigner in South Africa may have its challenges, it is possible to navigate the system and secure the credit you need. By following the steps outlined in this article and building a credit record, you can increase your chances of loan approval. Remember to choose the right bank that aligns with your specific circumstances and repayment capabilities. With patience and perseverance, you can overcome the hurdles and achieve your financial goals in South Africa.

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