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Topics: Loans

Different Types of Japanese Institutions: Public Institutions (Jyutaku Kinyu Kosha (Housing Public Finance Corp., Kokumin Seikatsu KinyuKosha, etc.)

These offer very low interest rate housing and commercial loans, and do not discriminate based on the number of years worked at a specific location. People who have trouble getting a loan from a private bank could go here. Pros: Rates lower than private banks, and conditions also broader. Cons: Takes a long time for loan application to be checked, and requires lots of documentation. Hard to change loan return terms.

Post Office

Allows people to take out loans using their postal savings or holdings of JGBs as collateral. Pros: The "Yuyu Loan" has the lowest interest rates of all, and can easily be applied for at the post office. Cons: Only people with accounts at the post office can use this, and the amount of borrowing offered is usually fairly low.

Bank Loans (Private Banks)

Variety of loans with a number of return options available. Can use savings as collateral. Pros: Wide number of loans to choose from, very free range available with loan conditions. Interest rates still low (2-3% for housing loans now). Cons: Have stricter loan application conditions than the public finance corporations.

There are also several other credit options, including shohisha kinyu (like Promise, etc.) that have very high interest rates. They have very lax credit conditions (anyone can get a loan), but their interest rates are very high (between 6-8% or up to 28% on credit advances).

Also, you can use places like Banner Financial to borrow money in yen for property in Australia, New Zealand, and some places in the US and Canada. The link to English information is here: http://www.bannerjapan.com/Banner/services/Multi-currency_mortgage.htm It is their Overseas Property Credit Service. The rates seem competitive (1.6785% for yen, 2.5% for $).

It is hard to borrow money from a private Japanese bank as a foreigner in Japan, but the above facilities do exist for your help. In particular, many people use the public financing institutions (kind of like Freddie Mac in the US) to get housing loans. Another idea is just to get a loan from home and "repatriate" the money here in Japan. With the yen relatively weak right now, that might work to your advantage.

-- From the Nikkei Woman

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