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Mortgage loans are available for foreigners without permanent residency! Learn how and recommended loans.

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Illustration of a man explaining a mortgage.

For foreigners who are thinking about living in Japan for the long term and investing in housing or real estate, some may wonder if they will be able to obtain a mortgage without a permanent residence visa. Some may be concerned that they may not be able to obtain a mortgage without a permanent residence visa.

But don't worry. In fact, it is possible for foreigners to obtain a mortgage loan in Japan even without permanent resident status. Nevertheless, there are various points to note when foreigners take out a mortgage loan, such as different screening standards from those for Japanese nationals and more documents required.

This article provides a detailed explanation of key points for foreigners without permanent residency to use a mortgage loan in Japan with peace of mind. It also introduces the types and characteristics of mortgage loans, key points for screening, and the application process, etc. Please refer to this article for more information.

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Obtaining a loan is a possibility for foreigners without permanent residency!

It is not impossible for foreigners to obtain loans in Japan. In fact, even if you do not have permanent resident status, you may be able to take out various loans, including mortgage loans, if you meet certain conditions.

In recent years, the number of foreigners living in Japan for extended periods of time has been on the rise, and financial institutions have accordingly expanded their services for foreigners. Increasingly, mortgage loans are becoming available to foreigners as long as they meet screening criteria such as a certain status of residence, stable income, and credit history.

Let's take a closer look at the specific types of loans available and their characteristics.

For Foreigners in JapanTypes of Loans and Recommended Financial Institutions

Loan options in Japan are diverse. Below are the main types of loans that foreigners should consider when taking out a loan in Japan, as well as recommended financial institutions.

1. mortgage loan

Although it is possible to apply even if you do not have permanent resident status, some financial institutions may require a certain length of stay or a higher down payment. In addition, stable income, employment status, and history of residence in Japan are also key points in the screening process.

Some of the recommended financial institutions include

  • SMBC (SMBC): If you have a long history of residence and a stable income, your application may be considered even if you do not have permanent resident status.
  • Bank of Yokohama: Foreign nationals can apply for a mortgage loan if they can prove employment and income in Japan.

Although not a financial institution, there is also a mortgage consultation service for foreign nationals called "Foreign Nationals' Mortgage Loan Erabi by Sumimoyo! My Home" is a mortgage consultation service for foreign nationals, allowing them to compare and consider mortgage loans.

For more information, visit ▶︎ Mortgage Loan for Foreign Nationals - Let's live in Japan! My Home

2. car loan

For car loans, permanent residency is also basically not required, but stable income, sufficient period of residency, and credit history in Japan are important.

The recommended financial institutions are as follows

  • ORIX: Foreigners can also apply for a car loan by submitting proof of residency and income.
  • JACCS: We also accept car loan applications from foreigners, subject to stable income and a certain period of residency.

Foreigners who are considering purchasing an automobile should compare car loans from these financial institutions.

3. credit card loans and cash advances

Permanent residency is not required for credit card loans and cash advances either, but length of stay, income, and credit history are key factors in the screening process. Also note that some credit card loans and credit cards may not be offered to foreigners with short-term residency status.

Major financial institutions offering card loans and cash advances include

  • Consumer Finance:
    • AIFUL: Period of stay, income status, and place of employment are the main points of examination.
    • Promise: Foreign nationals can apply by submitting a residence card and proof of income.
  • Major banks:
    • Sumitomo Mitsui Banking Corporation (SMBC Mobit): Foreigners can also apply, and their length of stay, income, and credit information are key factors in the screening process.
    • Mizuho Bank: Foreigners with a certain period of residency and stable income can apply for a card loan.
    • Resona Bank: features relatively low interest rates and high loan amounts, and also accepts applications from foreigners.

While consumer credit card loans and cash advances are fast and easy to process, their interest rates are often higher than those of banks. In contrast, bank card loans are more reliable and supportive, but the screening process may be more difficult. However, once you pass the screening process, interest rates are often lower than those of consumer loans, and the credit limit is often sufficient.

It is important to understand the features of each type of credit card loan in order to choose the one that best suits your needs. For more information on types of credit card loans and recommended loans, see the "Card loans are also available for foreigners! Types (bank-based, etc.) and recommended loans.Please check out the article "The first two articles" for a more detailed explanation.

Loan Selection and Lifestyle in Japan

When choosing a loan in Japan, it is important for foreigners to choose one that fits their lifestyle and future plans.

For example, if you plan to stay in Japan for an extended period of time, you may consider taking out a mortgage to own your own home. Although properties in central Tokyo are more expensive, they may offer advantages in terms of long-term asset value.

On the other hand, if you are coming to Japan for a short stay or for business purposes, we recommend that you choose a loan that meets your more short-term financial needs, such as a car loan or a card loan.

The loan's interest rate, repayment period, and difficulty of approval are also important selection criteria. Consider your financial situation and choose a loan with a reasonable repayment plan.

It is also important to consider revising your loan as your life stages change. Financial needs change at milestones in life, such as marriage, childbirth, and career changes. It is wise to regularly consider refinancing or early repayment of loans to choose the best plan.

Choosing a loan is an important decision that will play a major role in your lifestyle and future plans. Take enough time to find the loan that is best for you.

How and what points a foreigner can obtain a loan in Japan

Obtaining a loan in Japan is a big step for foreigners. There are many procedures and information required, and knowing what the key points are and how to proceed will make the loan application process smoother. Here we will explain in detail the methods and key points for foreigners to obtain a loan in Japan.

(1) Obtain credit information in Japan

One of the most important points for foreigners to know when obtaining a loan in Japan is their credit information. In Japan, it is common to obtain personal credit information from credit bureaus such as CIC and JICC (Japan Credit Information Corporation), and financial institutions use this information to determine whether to grant a loan.

It is important for foreign nationals to have a good grasp of their credit history before applying for a loan, as they may not have sufficient credit history in Japan, which may make the loan application process more difficult.

In addition, if you have been in Japan for a long period of time and have paid your rent and utility bills on time, this may have a positive impact on your credit report. If you check these information in advance and are able to present them to financial institutions, the screening process may go smoothly.

(2) Income Proof Documents Required for Foreign Nationals Applying for a Loan in Japan

Another important factor when a foreigner applies for a loan is proof of income. Many financial institutions require a stable income as a condition for loans. Foreign nationals are often required to submit documents proving their income in Japan.

Specifically, pay stubs, tax certificates, and bank book records may be required in some cases. If your employment status is full-time, there is no problem; however, if you work part-time or part-time, the stability of your income may be a key factor in the screening process. If you are a freelancer, you may be asked to submit documents showing the income and expenditure of your business.

Proof of income is one of the factors that can greatly affect the success or failure of a loan application. It is important to prepare the necessary documents in advance and to consult carefully with the financial institution's staff.

(3) How to choose the right loan plan for foreigners and what to look out for

When choosing a loan, it is important for foreigners to choose the right plan for them. Some financial institutions offer loan plans for foreigners.

For example, in the case of housing loans, some plans for foreigners have relaxed loan conditions or offer assistance in English. In addition, there are various special features of car loans for foreigners, such as plans that allow applicants to apply even if they have only been in Japan for a short period of time.

On the other hand, some plans may have different terms and conditions from loans for Japanese customers, such as higher interest rates or the need for a guarantor. It is important to compare products from several financial institutions and understand the features of each in order to choose the plan that best suits your needs.

(4) Preparing a down payment for a loan

One of the most important aspects of taking out a loan is the down payment. In most cases, a down payment of about 101 TP103T to 301 TP103T of the property price is required, especially in the case of mortgage loans.

The down payment has a significant impact on the terms of the loan; the larger the down payment, the more likely it is that the loan will be approved smoothly. Therefore, it is important to systematically save funds before taking out a loan.

If you have difficulty making a down payment, you may also want to consult with your financial institution's representative. They may be able to negotiate a reduced down payment percentage or suggest an alternative financing plan.

When taking out a loan, be sure to plan ahead, taking into consideration the preparation of a down payment.

Points foreigners should know before applying for a loan in Japan

When a foreigner applies for a loan in Japan, there are several important points to understand. This section details such points that you should know before applying for a loan.

(1) Japanese language skills to accurately understand loan agreements

The importance of Japanese language skills goes without saying when applying for a loan in Japan. In particular, since all loan agreements and related documents are written in Japanese, it is extremely important to understand the exact content of these documents.

A high level of Japanese reading comprehension is essential to read and understand loan documents, which often use technical and legal terms. If you are not confident in your Japanese, we recommend that you have someone you trust who understands Japanese check the contents.

Communication with the financial institution's staff is also important during the loan application and screening process. If you can smoothly communicate in Japanese about loan terms and conditions and required documents, the process should proceed quickly.

(2) Understanding the Japanese loan system

When a foreigner applies for a loan in Japan, he/she should also have a good understanding of the Japanese financial system and business practices. In many cases, Japanese loan applicants are required to have a joint guarantor, a system that may not be familiar to foreign nationals.

In many other cases, Japanese financial institutions have a strong "hanko culture" and require a stamp on documents. A better understanding of this uniquely Japanese system will help you proceed smoothly with your loan application.

(3) Expert support for loan applications

Applying for a loan in Japan may present various obstacles for foreign residents, such as language barriers and time-consuming document preparation. In such cases, we recommend that you seek professional support. Advice from specialists such as administrative scriveners, tax accountants, and financial planners should make the loan application process smoother.

There are also organizations that assist foreigners in applying for loans. For example, the aforementioned "Let's live! My Homeoffers advice on mortgage selection for foreign nationals. You may also want to take advantage of this type of service.

(4) Interest rates and repayment terms for foreign loans

Interest rates and repayment terms are also important factors when choosing a loan. In some cases, especially for foreign nationals, different terms and conditions may apply than for loans for Japanese nationals, so care should be taken.

Because loans to foreigners are considered high-risk, some loans to foreigners have higher interest rates or shorter repayment terms.

Therefore, it is important to carefully check the terms of the loan and choose a plan that is appropriate for your repayment ability. It is important to calculate your monthly repayment amount and take out a loan in an amount you can afford.

How foreigners can buy a home in Japan with a mortgage loan

There are several important steps for foreign nationals to obtain their dream home in Japan using a mortgage loan. Here we will explain in detail how to purchase a home using a mortgage loan, step by step.

Credit information and required documents to be verified before applying for a mortgage loan

Preparation is extremely important when applying for a mortgage. In particular, it is essential to check your credit report and required documents.

First, credit information, as mentioned above, can be obtained from credit bureaus such as CIC and JICC. If there are any past delinquencies or non-payments, it is important to resolve them in advance.

You will also need to prepare the necessary documents for your mortgage application in advance. In general, the following documents are often requested

  • Residence card or other identification
  • passport
  • certificate of residence
  • Proof of income (withholding tax certificate, tax payment certificate, etc.)
  • a copy of the bankbook
  • Information about your employer (e.g., certificate of employment, pay stubs, etc.)

Preparing these documents in advance should make the loan application process smoother. If you have any questions, please consult with your financial institution's staff.

Japanese Real Estate Market Research and Property Selection Tips for Foreigners

Property selection is one of the most important aspects of obtaining a mortgage loan. The real estate market in Japan varies greatly from region to region. There are also many different types of properties. After understanding the characteristics of each type of property, such as condominiums and single-family homes, choose the property that best suits your needs.

Market research is also essential when selecting a property. Use Internet real estate information sites or visit the actual site to confirm the property's market price and surrounding environment. It is also important to take into account any future increase or decrease in property value.

Key points to consult with an expert for a secure home purchase.

Expert advice is a reassuring ally for foreigners who often feel uneasy due to language barriers and cultural differences. When consulting with an expert, clearly communicate your needs, budget, and life plan. It is also important to be honest about your level of knowledge about purchasing a home and your Japanese language ability.

We also recommend that you compare multiple options when consulting with a specialist. Check each specialist's experience, areas of expertise, and support services, and choose the specialist who can provide the most appropriate support for you.

The difference is that when applying for or signing a mortgage loan, you can not only prepare the documents and proceed smoothly, but you can also trust us to handle any problems that may arise.

The Importance of Mortgages and Long-Term Life Planning

Long-term life planning is another important factor when taking out a mortgage. Mortgages are generally set up for long-term repayment periods spanning several decades. Therefore, it is important to establish a reasonable repayment plan with future life planning in mind. Specifically, you need to anticipate major life events such as marriage, childbirth, and children's education funds.

Also consider future increases or decreases in income. A variety of factors can affect your repayment plan, including increased income due to career advancement and increased or decreased expenses due to lifestyle changes. While long-term life planning cannot be done overnight, it is important to periodically review and adjust your repayment plan as your circumstances change.

Useful information and support for living in Japan

Living in Japan is fascinating, but it is not uncommon to face many challenges due to language barriers and cultural differences. For example, you may encounter difficulties in all aspects of life, from using keigo (honorific expressions) in everyday and business situations, to difficulties in finding housing, using public services, preparing for the JLPT exam, and even meeting new friends and loved ones.

At such times, Goandup Salon will be your reliable partner!

Our community provides support and information to help foreign residents in Japan to make their life in Japan richer and more comfortable.

  • Japanese Language Studywill meet the needs of all levels, from daily conversation to the use of keigo in business situations, to efficient Japanese language learning methods and preparation for the JLPT exam.
  • livingaspect of the program provides concrete advice and information on how to establish a foundation for living in Japan, including explanations of Japanese culture and rules, finding housing, and how to contract public services and living infrastructure.
  • Jobs & CareersRegarding the "what if" section, we can help you find a job, change jobs, and understand Japanese business etiquette and workplace culture, which are key to a successful career in the workplace.
  • Travel & Dining Guidewill introduce you to hidden gems in Japan, must-try gourmet information, and other unique local attractions to help you experience Japan more deeply.

If you have any questions or concerns about life in Japan, Goandup Salon is here to help you! We will wholeheartedly support you to make your life in Japan smoother and more enjoyable.

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How was it? In this article, we explained how foreigners without permanent resident status can get a mortgage loan in Japan and the key points to consider.

When a foreigner applies for a mortgage loan, it is important to prepare the necessary documents such as credit report and proof of income. Japanese language skills and cross-cultural understanding are also key to the screening process.

In selecting a property, it is important to choose one that fits your lifestyle while taking into account your budget and market research. In addition to purchasing a home, it may also be for real estate investment purposes. Utilizing the support of an expert will help you purchase a property with greater peace of mind.

Buying a dream home or investing in real estate is possible even for foreigners with proper preparation and planning. We hope this article will be of some help.

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