Russian legislation does not prohibit lending to foreigners. But without access to information about previous financial transactions, it is quite difficult to check the borrower’s payment discipline to a bank or an MFI. To reduce their risks, they may require the client to provide collateral and / or attract guarantors or co-borrowers. Consider the complexity of the loan in the Russian Federation for a foreign citizen on a specific example.
What is known about the borrower
Situation: a citizen of Ukraine moved to Russia, received a residence permit and wants to take a loan. He has no official place of work and experience. Since the credit history in his previous country of residence is corrupted, he decides to begin to issue several small loans in order to form positive entries in it. But MFIs and banks refuse to issue money, and shops do not sell goods on an installment plan.
The main questions of the hero:
- Do Russian financial institutions have access to data from the credit bureaus (BCH) of Ukraine?
- Is there a way to get a loan in the current situation?
Do Russian banks and Ukrainian banking institutions share information
Banks registered in Russia are not formally able to send a request to the Ukrainian Bureau of CI . This procedure is available only to financial organizations with foreign authorized capital. They will be able to request a credit history formed in the country of location of their head office. That is, the hero of the article needs to worry about previous delays only if he turns to the Russian branch of the Ukrainian financial institution.
What about informal ways to check payment discipline? The manager can bypass the standard procedure and ask the client to bring a report from the CIB . Then you have to take it in the Ukrainian bureau independently or refuse from financial services.
Why are foreigners difficult to get loans
Russian banks are afraid to give money to foreigners, because such transactions are not secured . If a Russian took a loan and evades paying it, then sanctions may be applied to him. He will be sued, and bailiffs will decide to repay debts through the sale of property or deductions from salaries and other income. It is more difficult with a foreign citizen, in Russia nothing holds him. The lender will have to spend financial and labor resources to return the funds if the client suddenly decides to leave the country and forget about the obligations.
For this reason, a citizen of Ukraine is not given consumer loans and credit cards. They are not secured by any collateral. Banks do not want to risk money in exchange for the prospect of receiving a small percentage of their use . Even microfinance organizations that differ in very loyal requirements for borrowers, indicate in mandatory conditions the citizenship of the Russian Federation.
But does it follow from the above that if there is security, a foreigner can still count on approval of the application? Yes, if you lay some property, then you can get the money. That is why he has a chance to take a car loan or a mortgage. Let’s talk about this in the next section.
What should a borrower from Ukraine try?
The hero of the article may try to apply for a credit transaction with a pledge. As security, you can offer your own apartment, car and other expensive objects. It is important to understand that in case of non-compliance with the terms of the refund, the bank has the right to sell the pledged property and repay the debt with the proceeds. Since the lender has a way to protect their financial interests, there is a chance for approval of the application from a foreign citizen.
As a hero from Ukraine, to increase the chances of getting money from a bank or an MFI:
- Provide all possible documents requested by the manager. It is important to help the lender to believe that the client is not going to deceive anyone. He is ready to cooperate and timely repay payments. You need to prepare your passport, residence permit and employment information. If the hero works informally and cannot bring in a 2-NDFL form for income confirmation, then he should ask the employer to fill out a certificate in the form of the bank. If there are additional sources of income, you can tell about them. In this situation, it is important for the manager to assess the solvency, and not the order and legal justification for the employment of the client.
- To attract co-borrower or guarantor to the transaction. The first borrows money together with a foreigner and is jointly and severally liable to pay the debt. His income and credit history will also be checked. But if a mortgage is issued, the co-borrower will also have rights to the apartment. The guarantor is not checked, and he does not claim the mortgaged property. The bank will turn to him for payment if the main borrower hides from his duties.
- Ask someone familiar with a good CI and official work to get a loan in your name. This is the most inconvenient option, and not the fact that a foreign citizen there is a person who can help him in such an important financial issue. In addition, the information will be reflected in his credit history, and we remember that a citizen from Ukraine wants to form records in his own.
What to do if you do not need a mortgage and a car loan, but an ordinary consumer loan or loan? Pledge existing property to enter into a contract. But most likely there will be many demands. For example, to provide as collateral real estate only in a particular city. Dramatically change the situation of obtaining Russian citizenship. Then it will be possible to take loans from MFIs to systematically form a positive credit history. So far, there are only options to take a loan on bail or with the assistance of co-borrowers and guarantors.