Taking out a personal loan to complete the immigration process

[Basil1]

Hi All,

 

My wife and I have been chatting about various ways of speeding up the process.  I would like to ask your opinions on taking out a personal loan in order to immigrate.  Does anyone have first-hand experience or at least know anyone who has done it that way? 

 

I believe that we would still need an SA bank account with enough money to pay the debit orders each month.  Our intention is to pay the loan off ASAP from Oz using AUS$.

 

Our plan going forward is to save as much money as we can this year to pay for the admin stuff (IELTS, Medicals, My assessment with EA, police clearance etc.) to get the ball rolling and then use the loan to pay the way to get over to Oz/subsidise the balance required.  (We're obviously not keen to take out a personal loan and have debt in SA when we leave, but if it means getting into Oz sooner, we're willing to do it!)

 

Any information would be appreciated.

 

Many thanks,

 

BMDJ

[ottg]

Immigration is a long process - treat it like a project. The next step is to do your monthly project expenses against your monthly savings (plus any lumpsum savings available) on a month-to-month base. As mentioned elsewhere you don't need all the cash at the same time. Calculate the monthly net and then a rolling accumulated value that shows your monthly shortfall. Move your big ticket items around to improve the cashflow eg application payment, furniture removalists, flight tickets. See if you can get big-ticket items paid on an installment plan. Decide when you will sell some goods at a fair value with a possible windfall. Add that to your monthly statement.

Now you have a plan. Mitigate your risks as you cannot assume you will get a job offer soon (obviously, you will keep on trying). Add in extra funding for a few months on this side etc. Now you will know better which months you will be tight and which months arent doable. On the latter make, a short-term plan like using an "expensive"' credit card as a buffer. Obviously, you will look for a cheaper one or cheaper money (eg your family)

 

 

[ottg]

36 minutes ago, Basil1 said:

your opinions on taking out a personal loan

 

I will need to be direct here. For someone asking to be sold on a financial level and then to ask about a personal loan to finance the immigration process?

Simple, don't do it. It's not an asset which appreciates in value.

What are all the other financing options you have looked at and what does the cashflow look like for each scenario, over x months/years?

Make a few assumptions and calculate the payback period and breakeven points.

Look at the effect if you delay your actual departure dates etc

[Tntaglia]

I would also suggest that you look at all your current assets and liabilities. Do you have money tied up in your house/car/anything else? It may be better to sell your house, free up cash that way, and then rent until you leave. Sell your car and use public transport. Whatever assets you have, rather liquidate those (since you will probably have to do that anyway) and use it to pay for your immigration. Consider selling things that have some value but that you don't use often - rather build up your collections again slowly once you are in Oz. Downgrade your medical aid to a hospital plan, reduce any expenses that you can.

 

In terms of total costs, ours to date was: 2 x Pearson academic tests (R2645 each), 1 x Vetassess (R7000-ish, can't find the invoice now), visa lawyer fees total R26,000 paid in two instalments (I think it's AUD1,250 x 2), NSW nomination application R3000, visa fees R75,000 (family of 4, 190 visa), and the quote for our 20ft container move is just over R70,000. Medicals were about R5000 for the 4 of us if I remember correctly. PCCs are cheap, just over R100 each. I don't think there were other biggies. So before flights and some other random expenses (customs inspection when our container arrives, costs for unabridged certificates etc) our total cost is on just under R200k. I expect the flights to be another R30k or so one-way allowing for extra baggage. So you may get away with less than R320k but your mileage may vary.

[iambrettstar]

To throw my 2c in.... we decided against shipping a container, and were quoted for a medium movecube only (in which we put some precious trinkets, books and toys). We also did the process ourselves, without an agent. Our costs:

ACS Skills Assessment = R5000

Pearsons English Test =  R3500 (wife had letter from school + varsity showing courses were taken in English, to prove functional English)

Medicals =  R5000 (including daughter under 2)

Lodgement = R75000 (might change slightly with improved exchange rate)

Medium Movecube, CPT - MEL = R12000

Bringing the total cost just over R100K.

 

You only need the skills assessment and pearsons test to submit an expression of interest, and you have I think 60 days after receiving your invite in which to lodge. You can then wait to do medicals until after your CO requests them.

 

So, you need +- R10K to do an expression of interest, 2 months after your invite you need another 75K (assuming you're a family of 3, like us), and another 5K when your medicals are requested. Add in your agent's fees, if you decide to go with an agent.

 

You only have to enter Australia by the date stated in your visa, which is usually the earliest of a year from your PCC or medical.

 

You can put your stuff into storage if you intend on shipping it, and ship it later once you've paid off your loan / saved up some cash.

 

I'm not necessarily advocating that you take out a loan, but I'm stating that it can be done for a lot less than R320 000.

 

(edit): don't forget the flights of +- 30K!

Edited February 1, 2018 by iambrettstar
Forgot to add flights cost

[RedPanda]

19 hours ago, Basil1 said:

Hi, @iambrettstar thanks for your post.  appreciated. 

 

We have looked into Move cubes, they are certainly being considered from our side!  That is the next project of mine - to compare selling the bulk of things here and then ship the important things.  Budgeting for +/-R17k rather than +/-R70k would be great!  We are contemplating using an agent, however, we know that it is not rocket science.  We are going to do an initial consult with the agent we have in mind, Ruth Settlars (Durban North), and post her detailed report following the initial assessment we'll decide if we're us to it ourselves or not.  the assessment with Engineers Australia seems simple enough and with all of the information that we have on this forum/youtube and just general browsing, I think that we could save the agent fees.

Thanks for mentioning the average timeline as well.  It's important that we start the process at the right time.

Look, depending on how difficult your application is (points claim, medical issues with family etc), you can easily do it yourself. I did our application myself, engineer with spouse, excellent English, correct age, no work experience...just collect all the documentation, fill in all the forms, to the T. Submit and wait.

If, however, you have possible issues to make up your points claim, please go see an agent. The visa application fees are way too much to lose on a misunderstanding.

Good luck!

Edited February 2, 2018 by RedPanda

[LM17]

I have to agree with @ottg , its not cheap or easy to immigrate , but I am not sure a personal loan is the answer. Keep in mind the cash outflow is not all at once ,

You will pay 30K - 40k upfront if you use an agent (you can do it yourself and save this)  , then dribs and draps over the next 6 months for IELTS, EOI etc,

the next big payment is once you have been accepted  and you invited to apply. (3800 AUD per person I think)

Long story short, I would start saving now, or sell your cars and get cheaper ones etc.....try and avoid the loan if you can

 

Assuming you will resign before you go over , so you will have some prov fund cash to helps pay for the move (not cheap)

 

[Basil1]

@ottg @LM17 Thanks for your honest replies.  I know that asking this question after asking my question about "selling" me on a financial level seems quite contradictory!  To be honest, I am just trying to research all of our options.  But thanks for warning me against it.  Given the profession that I am in, a simple cash flow should have been the first thing on my to-do list!  However, admittedly, I hadn't done one (besides a very rough budget).

 

I have done a cash flow and compared it to the loan option - so anyone with the same question who possibly reads this in the future, see below. ( @ottg you're already in Oz, @LM17 I know that you have an activation trip next month (as per a previous conversation we had) so, with your knowledge of the process, please correct  anything below for the sake of others who may read this!)

 

This is based on my estimation of about R320k to complete the process for my family.

 

With some stringent savings (and a lot of self-control) we can hopefully save that amount in about 3.5 years (3 years is the target that we have set ourselves)

 

We were researching the option of saving R100k this year (2018) and then take out a personal loan to subsidise the balance required. (R100k saving, for us, is quite ambitious, but we are practicing living well below our means)

However, to compare apples with apples, I'll look at saving the total R320k over 42 months (3.5 years) vs taking a R320k loan, paid back over 7 years (84 months) (Based on a quick call with ABSA!)

 

To save R320k over a period of 42 months = R7 619.05/month savings.

 

A R320k loan @25% interest = R80 000 Intrest per year

Therefore, total Intrest = R560 000k

Total amount spent R320 000 + R560 000 = R880 000

Monthly loan repayments = R10 476.19

Basically saying that it will cost you R560k to borrow R320k! Not to mention that the monthly repayment amounts for the loan are considerably higher than what one would have to save each month to then make to trip on 3.5 years.

 

Although there are some pros of taking a loan (money right now and therefore migrate to Oz sooner) the proof is in the pudding (figures, in this case!) Some might argue that you will be earning AUS$ and therefore paying off the loan will be easy!? I'd love to hear if that worked for someone, however, I don't think that I will be doing it this way - Maybe I'll re-think it if I get a solid job offer!

 

 Comments welcome!

 

Thanks again Gents.

 

 

 

Edited January 29, 2018 by Basil1
Addition

[TamTam]

I am going to second what @ChrisH said in your other post - if your skill gets removed from the list then it's game over. Plus the costs of emigrating (agent fees, visa fees, container, flights etc) are only going to get more expensive and you never know what the exchange rate is going to do.

 

You do have to weight up the risk of owing money and paying that off versus the risk that the opportunity is taken off the table entirely!

Edited January 29, 2018 by TamTam

[Basil1]

AAAAHHHGG!! Spanner in the works, @TamTam hahaha.  Another massive argument.  People have actually been trying to get engineering removed from the Skills list for ages now. I never thought the decision would be such a hard one to make.  Each camp has its own risk.

Thanks for commenting. 

@ChrisH did rightfully mention this in my other post.

 

At the end of the day, each process is so different.  My wife and I have a lot of soul searching to do and we ultimately need to do whats best for our family.

Edited January 29, 2018 by Basil1
Addition

[TamTam]

Good luck with the decision - it's a rollercoaster!

[Basil1]

Thanks @TamTam It sure is!

[Basil1]

@ottg thanks for the detailed messages, it is much appreciated. I have added future expenses to my cashflow and things are looking good. The way I see it, this is the only way people should look at their finances going forward. (and it can relate to any situation in life. Long or short term).

 

@Tntaglia thanks for your advice. We don't have much in the lines of assets and we are really trying hard already to streamline our spending /living to be able to afford the cost of Immigration. Thanks for adding your figures, it aids me in keeping my cashflow as market related as possible.

[Basil1]

Hi, @iambrettstar thanks for your post.  appreciated. 

 

We have looked into Move cubes, they are certainly being considered from our side!  That is the next project of mine - to compare selling the bulk of things here and then ship the important things.  Budgeting for +/-R17k rather than +/-R70k would be great!  We are contemplating using an agent, however, we know that it is not rocket science.  We are going to do an initial consult with the agent we have in mind, Ruth Settlars (Durban North), and post her detailed report following the initial assessment we'll decide if we're us to it ourselves or not.  the assessment with Engineers Australia seems simple enough and with all of the information that we have on this forum/youtube and just general browsing, I think that we could save the agent fees.

Thanks for mentioning the average timeline as well.  It's important that we start the process at the right time.

[data]

My 2c. If I'd have taken out a loan to complete my application, I would not have been able to pay back the installments when I arrived because I needed every cent I earned to live here.

 

As a professional i'm sure you will be able to pay it back but just make sure you consider how you 

[Basil1]

@RedPanda thanks for the heads-up. After our initial consultation with an agent we'll make the decision based on the points we can secure. 

 

@data thanks for sharing. I keep amending our cashflow to mimic various scenarios. At a push, I really think that we can save enough to leave by the end of 2019/ beginning of 2020.

 

Holding thumbs!

Edited February 3, 2018 by Basil1
Correction

[Tntaglia]

@Basil1 Just make sure you use a MARA-registered agent, even for the initial assessment. I don't know the lady you mention at all so don't know if she's registered, but there are a few agents on the forum here too who could help you.

[Basil1]

Thanks @Tntaglia

 

Being MARA registered - is it just a safety net for us, the clients, or does it actually assist the agent with the process (is it a requirement for them)?

[Tntaglia]

@Basil1 I think it's a safety net more than anything else - there are many horror stories on the forum about people using a non-registered agent who absconds with their fees or give really bad advice which decreases their chances of successfully emigrating, and you have no recourse in that case. The dept of immigration in Oz recommends that you make use of a MARA registered agent if you choose to use an agent. Honestly I would never consider using a non-registered agent, you may be worse off than doing it yourself.

[Basil1]

@Tntaglia I too have read the horror stories of people losing tens of thousands of Rand due to dishonest "agents". The reason we are meeting with Ruth is because good friends of ours have used her and have been really happy and impressed with her service.

 

We will however proceed with caution. Thanks for your concern. 

[tcmiller]

Just my 2c. I wouldn't take a loan because you'd then be starting over in a new country with a massive debt hanging over you which is not lekker (haven't used that word in a long while).

The loan may prevent you from purchasing property this side (not prohibit you from getting a mortgage because your credit history in SA doesn't impact your credit record in Australia, but if you have to pay off the loan you might not be able to afford to pay a mortgage here). The property prices are eye watering and just get worse with each passing year. If there's any way you can move without the loan then do so at all costs.

[Basil1]

@tcmiller thanks for your addition - we have decided against the personal loan.  It's just not feasible.

[TeeTMI]

On 07/02/2018 at 11:35 PM, Basil1 said:

Thanks @Tntaglia

 

Being MARA registered - is it just a safety net for us, the clients, or does it actually assist the agent with the process (is it a requirement for them)?

 

In Australia it is illegal for a person to provide assistance without being a Registered Migration Agent (we could be fined or sentenced to prison).  Off the top of my head we are required to:

• complete a 6 month course prior to starting practice (this is to be increased to 1 year)
• to undertake regular Continuing Professional Development courses
• to follow a strict code of conduct aimed at protecting the clients interests https://www.mara.gov.au/becoming-an-agent/professional-standards-and-obligations/code-of-conduct/
• to hold professional indemnity insurance
• to have access to the migration legislation
• to subscribe to internal immigration policy relating to the legislation and regulations
• to hold your monies in a separate bank account (similar to a trust account) until work is completed
• compliance is checked on a yearly basis when we re-register

 

[Basil1]

Thanks @TeeTMI. Appreciate the detailed breakdown. 

[HappyIsland]

You might be overcomplicating things. I certainly don't think you need to save up anywhere near 300k upfront to emigrate.

You can start with a migration agent. They're not that expensive. You should get sorted for <40k, and generally, you can pay in phases. So maybe 10k or thereabouts to get started.
Many people can't afford migration agents and do everything themselves, so don't forget about that option.

The first step is generally to get the English exams sorted, so plan on about 6k for 2 PTE exams.
Then, a Skills Assessment will cost about R5000. A Skills assessment will take 2-3 months.

Then, you can launch an EOI at no cost, which can take 1 - 4 months to get an invite.
On the invite, launch your visa application which costs about 70k for a family of 4.

After the visa costs it will take about 4 months for the visa to come through, and then you have an additional 12 months to save for a visa activation trip.

 

Once you do the visa activation trip you have 5 years to save to emigrate.

Edited April 17, 2018 by HappyIsland

[Basil1]

Hi @HappyIsland thanks for sharing.

 

On 4/17/2018 at 8:50 AM, HappyIsland said:

I certainly don't think you need to save up anywhere near 300k upfront to emigrate.

100% agree.  I was looking at a possible overall total, but yes, it is not required from the get-go! Actually, R300k won't be required at all!

 

IELTS booked for 07 July.  Will do Engineers Australia assessment thereafter. Applied for all documents at DHA yesterday (What a mission!) - What I'm trying to say is... the process has started!  By asking about the loan I was looking for a "fast-track" option, but we wont be taking out a loan if we do the process over a three year period.

 

On 4/17/2018 at 8:50 AM, HappyIsland said:

After the visa costs it will take about 4 months for the visa to come through, and then you have an additional 12 months to save for a visa activation trip.

 

Once you do the visa activation trip you have 5 years to save to emigrate

 

We're hoping to emigrate straight (no activation trip) as the s"shutting up shop" process should be quite quick for us.  Hopefully it goes that way!

 

All the best.

 

Basil