Australia 457 visa changes
The Australian Government recently announced plans to do away with the 457 visa program. Esaias Tan via Unsplash

The Australian Government recently announced plans to do away with the 457 visa program. An estimated 95,000 foreign employees currently utilise this work visa, many from India. Prime Minister of Australia Malcolm Turnbull has stressed that this is not designed to target Indian workers in any way.

The 457 visa program is currently being modified to ensure that Australian permanent residents and citizens are prioritised when it comes to any employment offered to foreign workers. This visa program is largely directed at the information technology sector, since most of the Indian workers in Australia are on the 457 visa. New visa requirements state that all foreign workers will have to comply with additional requirements, notably with requisite job skills and proficiency in English.

Why will the cancellation of the 457 visa program affect personal loans in Australia?

Any changes made to an existing temporary residence permit or work visa program naturally affects the people that are currently in Australia using that visa, Economic Times says. Since the 457 visa is regarded as a stepping stone towards Australian permanent residence, it has far-reaching implications across the board. Many temporary workers in Australia use the 457 visa to apply for lines of credit such as personal loans.

By next year, the 457 visa program will be eliminated and replaced with something entirely different. This will affect the applicants’ ability to get a personal loan in Australia. Since these workers are not permanent residents, they are rather limited in the options available to them. Presently, workers on a 457 visa must be at least 18 years old with a bona fide address in Australia. Whatever loan term the borrower is applying for must coincide with the duration of time permitted on the work visa.

What the 457 visa will be replacing

There will be 2 unique types of visas for temporary workers in Australia in 2018. These include the medium and long-term strategic skills list visa, which is valid for up to four years. This visa is preferred among candidates as it can be renewed many times.

The other visa is known as a temporary skills shortage visa. It is valid for just two years and is only renewable once. These visas have yet to be introduced in the Australian immigration system. Until that time, workers who are currently in Australia on a temporary work visa such as the 457 visa are still able to apply for personal loans. It should be remembered that lenders have their own set of criteria when it comes to approving personal loans for foreign workers. As it stands, Australian permanent residents have a much easier time getting a personal loan than temporary workers on the 457 visa.

What are some of the requirements for personal loans with the 457 visa program?

Banks and non-bank lenders vary in their approach to approving personal loans for temporary workers in Australia. Sometimes it may be necessary for foreigners to be sponsored on a long stay work visa, while other banks are quite happy to approve loans for 457 temporary visa workers. Many Australian banks require foreign workers to come into their branch to apply for a loan. The online option is rare. There are various restrictions on the loans, meaning that a loan term will expire before the work visa expires. Banks want to be sure that workers will repay loans before they are required to leave the country. Other restrictions for loan eligibility include being an account holder at the bank in question, and providing a comprehensive set of documents to confirm eligibility to live and work in Australia.