If you are wondering ‘Can I repay my personal loan from abroad?’ you are not alone! Britons are increasingly seizing opportunities to live, study, work or retire in another country. Personal Loans Now offers advice on how to make sure that you still meet your financial commitments.
- Notifying your bank before leaving the country
- Whether you can move abroad to avoid debts
- How you can make loan repayments from abroad using a UK bank account
- Using a foreign bank account
- Using international or off-shore bank accounts
- Money transfer services
- Conclusion – Repay my personal loan
Repaying a Personal Loan from Abroad
If you intend to go abroad either for businsess, to study or retire, there are many options available to you to repay your loan.
Before Leaving the Country: Notify Your Bank
Unlike the United Arab Emirates, owing money in the UK won’t present a problem if you wish to leave the country and settle somewhere else. However, you should contact all your financial institutions and explain your plans. You should make sure that you leave them a forwarding address so they can contact you. If your plans haven’t been finalised yet, let them know an email address and a contact number (perhaps of a close family member) until you’ve found permanent accommodation.
It’s a good idea to pay off any outstanding debts you have before you leave. Doing so will make your finances less complicated and reduce the risk of you losing money on transactions because of currency fluctuations. This might not always be possible, however.
Moving Abroad to Avoid Debts
On their side, financial institutions prefer customers to settle their loans in full before they go to live abroad. This is because it’s more difficult for them to chase up defaulters outside the country. Although there’s a popular misconception that people owing money can flee the UK leaving their debts unpaid, this isn’t what happens in practice. Lenders can use the services of local debt collectors to recover money owed. In this case, they would follow the law of the country of residence rather than UK law, so it isn’t always beneficial for UK citizens.
Even the popular fictional device of just varnishing and leaving behind all debts unpaid wouldn’t work in the real world. In such cases, lenders could issue a CCJ (County Court Judgement) at the borrower’s last known UK address. If all communications from the bank are ignored, then any UK assets such as property could be at risk.
Will I be able to Repay My Personal Loan From Abroad?
If you are wondering whether I can repay my personal loan from another country, Personal Loans Now offers a variety of ways for you to arrange for your long term loan to be paid from outside the UK. Let’s look at some of them.
Using the Services of a UK Bank Account
Using the Services of a Foreign Bank
Using International or Off-Shore Bank Accounts
Money Transfer Services
Although you need to be a UK resident to open a new current account, you can keep your account open when you settle in another country. This is especially crucial if you will be receiving a state pension as it can only be paid into a UK bank account. If you have a regular income being paid into your account in sterling, you should set up a direct debit before you leave the country. In this way, your loan instalments will be paid automatically without you having to keep track of dates or arranging transfers of cash.
If you are earning a salary in your new country of residence, you’ll need to open a local bank account. Documentation for opening a current account vary from country to country, but you’ll usually need a valid UK passport, proof of legal residency (such as a permit or visa), proof of your address such as a utility bill and an employment contract. Once you’ve opened an account, you can make arrangements to transfer your personal loan instalment every month. Most banking systems can set up a direct debit for you. But you should allow at least a working day for the transfer to go through. Don’t forget to take into account local and UK public holidays. Alternatively, you could ask about internet banking so you can make your own arrangements.
As the amount you’re transferring won’t be in sterling, make allowances for fluctuations in the exchange rate and err on the side of caution. Also, don’t forget to allow for any transfer and exchange fees. Although there’s no limit on how much money you send into the UK, some countries do have restrictions on how much you can send out of theirs. Make sure that you abide by these banking regulations.
Recent changes in banking regulations mean that very few UK banks now offer international banking facilities for UK citizens living abroad. This is because low-interest rates and little demand make the service less lucrative for parent banks. The banks that still offer this service (notably HSBC International Services and Barclays International Banking) have strict criteria about the size of the balance in the account which put them out of the reach of most ex-pats. UK citizens would face a similar problem if they wished to open off-shore bank accounts. Such services aren’t available in all countries either.
You don’t have a local bank account and wondering how can I repay my personal loan from another country. Don’t worry! There are a number of companies which transfer funds from a foreign country to the UK. This is the most costly choice but is the only solution if you’re unable to open a local bank account. Before choosing a firm, check both their transfer and conversion fees as they might not be transparent about how much it will cost you. Also, check the company with the best exchange rate and whether there is a minimum amount that you must send.
What Can I Conclude About How to Repay my Personal Loan?
Making a fresh start in another country is exciting, and new experiences await you. However, it isn’t a reason to neglect any pre-existing financial commitments you have in the UK. There are alot of options available so that you can continue repaying your loan instalments from another country.