When I was surfing the internet on the other day, I happened to find a question asking how to lend money in Japan from “Quora”.
I’m a foreigner working in Japan and I want to borrow 1,000,000 yen in Japan. Is this possible?
Referred from “Quara”
Converting 1 million yen into dollars, it is about 90,000 dollars. Speaking of 1 million yen in Japan, it is a worth amount of 3 or 4 months salary of the majority of general full-time workers.
There might be a considerable number of foreigners who need money suddenly at some point of living in Japan. For those who are in trouble with lack of money and think about a credit card loan of Japanese financial institutions, I would like to explain,
- Screening conditions for foreigners in Japan
- Acceptable visa status type
- Documents or certificates to be prepared for application
The stance of Japanese financial institutions about the nationality of applicants is “if an applicant satisfies the required conditions, it doesn’t matter which country an applicant is from.”
Actually, the facotr considered preferentially because of non-Japanese is just how long you have continued to live in Japan. Your age, income, savings and other factors included in the conditions are screened in the same way as other Japanese applicants’
However, the conditions of a credit card loan by banks are way stricter than that of consumer finance companies. Because major banks in Japan make a loan only for non-Japanese applicants with permanent resident status.
If you have a stable income but no permanent resident status, consider consumer finance companies’ credit card loan.
Contents
- 1 Things you pay attention to before thinking about a credit card loan
- 2 Is it possible for foreigners to take up a credit loan in Japan?
- 3 Things you prepare for prior to application
- 4 Is it possible for foreigners without permanent resident status to take up a credit loan?
- 5 The conditions of a credit card loan
- 6 Try not to approach black-market lending
Things you pay attention to before thinking about a credit card loan
In terms of borrowing money, you are always required to have a well-conceived repayment plan. It is important for anybody who borrows money to think about the balance of income and outgo because solvency for repayment is the main point of the credit card loan screening in Japan.
When you decide how much you borrow, you have to set your standard of loan value in terms of how much percent of your income you would take up a credit card loan as remaining solvency for repayment of the debt principal and its interest rate.
Generally, it is said that loan value which is from 10 to 20 percent of your income should be the maximum line that you can still remain solvency after the payment of your living costs.
For example, if you earn 300,0000 yen annually, your loan value maximum standard should be 600,000 yen a year. When you take up a credit loan, you just keep this value as one of your criteria in your mind.
In token of that, Japanese financial institutions that provide a credit card loan mostly set maximum limitation to the loan amount as 30% of annual income.
When you really want to take up a credit loan from a Japanese financial institution, you just review how much is your income and how much is your outgo.
Is it possible for foreigners to take up a credit loan in Japan?
- Gain stable income
- Live in Japan
These conditions are the basic one that requires entire foreigners living in Japan fairly. Any Japanese financial institutions providing a credit card loan individually set detailed screening points on the basis of conditions.
For example, some financial institutions set the conditions of duration of stay and visa status type and length of service derived from the condition of “live in Japan”
If living in Japan for 20 years, working for a Japanese company for 15 years, earning 5 million yen per year is the 90 percent of trustworthy factors for Japanese financial institutions to be willing to make a credit loan, how much percent do you achieve at now?
Things you prepare for prior to application
- Resident card
- Special permanent certificate
You are required to prepare your ID card or a certificate that proves you are non-Japanese.
Actually, your ID card as a resident in Japan is sometimes not needed depending on the financial institution. But the major bank or consumer finance company that can be seen on TV require a resident card as the most basic certificate you prepare.
Depending on the loan value, you are also required to submit a copy of your employment certificate. Depending on the situation, a person who handles your loan may make a call to your company to make sure if you work there.
Is it possible for foreigners without permanent resident status to take up a credit loan?
The most important point for non-Japanese without permanent resident to take up a credit loan in Japan is how long you can stay in Japan from now. You should calculate the rest of your duration of stay remains sufficient time to make a repayment.
The repayment period for a credit card loan is basically 6 years and 9 months. The number of repayment is 80 times. If you can’t complete repayment within this period, your repayment period is automatically extended.
However, as long as you have the restriction of the duration of stay in Japan, you may have to raise monthly repayment amount within the range of solvency in order to complete repayment until the day you return back to your country.
Estimating the risks if you can complete payment while you are in Japan, it is one of screening point that a Japanese financial institution makes a loan.
Japanese financial institutions want to have evidence that you live in Japan for as long a time as you have potential to complete repayment until you return back to your country if you don’t have permanent resident status.
Credit card loan contract term is generally from 1 to 2 years. It is difficult for a non-Japanese who move out of Japan within 1 year to pass through the loan screening. If you need money urgently during short term stay in Japan, you should use cash advances from your credit card.
If you are a student abroad, income gained by a job permitted by “Permission For Other Activity” is only regarded as a criterion of the loan screening in terms of “stable income”.
The conditions of a credit card loan
Banks
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Consumer finance comapnies
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As I told, just because a financial institution that you plans to take up a loan set no condition of visa status doesn’t mean anybody can take a credit card loan easily.
Don’t forget that there is screening before they make a loan. Who wants to make a loan to a non-Japanese who only stay in Japan for 3 months? Before thinking about a credit card loan, think if your situation is worth having a consumer finance company or a bank made a loan.
Try not to approach black-market lending
Does your company issue tax return and pay slip for all employees? It seems to be very natural that all workers have the right to receive those certificates. But, there are some companies that don’t give those certificates to employees for some reasons to hide. Non-Japanese people who work for a company that has slapdash HR management may possibly not receive those.
However, tax return and pay slip are very important certificates to process screening when you take up a credit loan. But applicants who don’t satisfy the conditions are attracted to a fishhook with a bait of birdlime that a loan can be made without submitting those certificates.
There is no case that a legal consumer finance company omit necessary procedure. This is a common maneuver for black market lenders to scheme lending money illegally with an extraordinary high-interest rate. Don’t be interested in an advertisement with self-serving information.
There are no legal financial institutions that set no condition for making a loan. If you don’t know if a financing company you found is a legal consumer finance company or a black market lender, you ask your Japanese friend for advice first.