Today, while living in United States, you can completely decide to seek a foreign bank in order to obtain a loan. Thus, a foreign bank can finance the purchase of real estate in United States, or a consumer credit. If you choose a European bank, be aware that since 2008, the banks of the European Union have adapted a standardization in the presentation of banking offers. As the APR is the same, it will be much easier for you to compare the different offers. However, you can very well apply for a loan in a country that does not belong to the European Union.
You can apply for a loan from a foreign bank, however, they may impose certain clauses on you. First of all, to get this loan, you will need to open an account in this bank. Then, in order to grant you the credit you request, the bank will ask you to produce proof of income, real estate… Indeed, banks want to know your assets, your income, in order to ensure that you can repay.
If you acquire your property through a mortgage from a foreign bank, French law requires you to have a mortgage on the property. This mortgage must have been issued by a French notary.
What are the risks?
However, before doing so, there are a number of criteria that you need to take into account. First of all, if you borrow in a foreign currency, with the fluctuating exchange rates, you might find yourself in a difficult situation. If exchange rates go up, your maturities could also increase significantly. To remedy this, we advise you to require a reassessment clause.
Next, check the foreign exchange commissions. Indeed, if your current account is in United States, and you have to make transfers every month to pay your credit maturities. Check that for each transfer, you would have neither fees nor exchange commission.
The legislation is different from one country to another. Find out in particular about prepayment clauses. If you are borrowing in Germany, be aware that you will not be able to make a prepayment during the first ten years of your loan.
What are the reasons for borrowing abroad?
When you are on the bank of United States, whether it is in the check file, or in the file of credit incidents, borrowing abroad is possible. Indeed, these files are only accessible in United States, foreign banks will not have access to them.
Cross-border workers who work in a foreign country, while living in the United States, may have an interest in borrowing abroad, in order to guard against currency risk. Because he works in this country, the frontier worker will more easily obtain his loan from a foreign bank.
If you wish to borrow abroad, we advise you to consult the unique register of intermediaries in insurance, banking and finance. This will allow you to verify that the professional you are addressing, whether in the United States or in the European Union, has an authorization.