Choosing the right loan for you is a complex process which requires comprehensive research.
With the recent advancement in the field which include peer to peer lending sites and online cash-advance solutions, alongside traditional lenders, there’s a plethora of options to carefully inspect, and it is imminently more difficult and time-consuming to do it than in the past.
Multinational businesses and overseas property buyers are facing even a more perplexing decision - should they be using a local lender, or should they seek out a loan overseas.
This question consisting of so many different parameters and considerations, that it is literally impossible to address correctly in a “one fits all” form. Instead, we have chosen to give some important points to consider.
Top 5 Tips to Keep in Mind - Overseas Loans
- If you are looking for a short-term loan in the peer to peer fashion, you better stick to USA or UK based companies. Although there are some companies who deal with clients in France, Spain, Estonia, and Finland, they are scarce. In the USA and the UK you have a larger selection of companies to choose from, with longer track record, and assumedly better conditions because the liquidity is higher.
- If you are seeking out for a mortgage loan abroad, you are likely to need the help of a brokerage. The brokerage’s fee can make a substantial difference in costs. In addition to that, the fluctuations in exchange rates can heavily impact your repayment, and it is advisable to use derivatives like Forward Contracts to fix the rates. Buying a Forward has costs of its own which should be factored into the decision.
- Different countries have different rules and procedures when it comes to borrowing. If you will face a problem after borrowing funds abroad, you will need to hire a specialist lawyer who can represent you there, which is likely to be costly. In addition to that, consumer protection bodies like the British Financial Ombudsman or the American FTC won’t necessarily deal with complaints coming in from a non-resident.
- Traditional lenders are known for their exhausting and lengthy procedures, and that it true for anywhere across the globe. If you were to lend money from such lenders abroad, the process will be even more gruesome, as you will be forced to translate and notarize all relevant documents. Because of strict Anti-Money Laundering regulation, an overseas client may face even more questions than the usual.
- Unless you are buying a property abroad, or have a major saving account abroad, or a multinational business, you are not likely to get a loan from neither traditional lenders nor alternative lenders. It is suggested you won’t even bother trying.
We hope these tips will help you make a concise decision on domestic versus overseas loans.