Getting a car loan Japan foreigner is possible – and you don’t need permanent residency.
Many foreigners think they must pay cash for a second hand car in Japan. That’s wrong. Japanese banks and dealers offer car loans to foreigners – you just need to know which ones approve non-residents and what documents they require.
This guide shows you exactly how to get a car loan in Japan as a foreigner, which banks approve expats, real interest rates, and step-by-step how to apply.
Can Foreigners Get Car Loans in Japan?
Yes, car loan Japan foreigner approvals happen every day. But it’s harder than for Japanese citizens.
Banks see foreign residents as higher risk because there’s a chance you might leave Japan without finishing payments. This means:
- Stricter approval requirements
- Sometimes higher interest rates
- Shorter loan terms (tied to your visa length)
- Often need a guarantor
But don’t let this discourage you. Thousands of foreigners finance cars in Japan every year. You just need the right approach.
Which Banks Give Loans to Foreigners?
Not all banks in Japan lend to foreign residents. Here are the ones that do:
Banks That DON’T Require Permanent Residency
Suruga Bank offers special auto loans for foreigners. You can borrow up to ¥3 million without permanent residency. According to Suruga Bank’s foreigner loan program, you can complete everything online – no branch visit needed.
SMBC Prestia (formerly Citibank Japan) is foreigner-friendly. They understand international banking and have English-speaking staff.
Shinsei Bank sometimes approves foreign residents without guarantors. They’re worth checking if you have stable employment.
Banks That Work Better With Permanent Residency
SMBC (Sumitomo Mitsui Banking Corporation) offers competitive rates but usually requires permanent residency or a Japanese guarantor.
MUFG (Mitsubishi UFJ Financial Group) has good rates (1.5%-5%) but stricter requirements for foreigners.
Mizuho Bank similar to MUFG – better rates if you have permanent residency.
Regional banks in your area might be flexible, especially if you already have an account with them.
What Interest Rates Can Foreigners Get?
Interest rates depend on your situation. Here’s what to expect:
Bank auto loans: 1.5% – 5.0% per year
- Best rates if you have permanent residency
- Lower rates with Japanese guarantor
- Requires good credit and stable income
Dealership financing: 0% – 6.0% per year
- Sometimes promotional 0% rates on new cars
- Usually 2% – 6% on used cars
- Easier approval but watch for hidden fees
In-house dealer financing: 4.0% – 12.0% per year
- Higher rates but more flexible approval
- Good option if banks reject you
- Read contracts carefully
Personal loans used for cars: 4.0% – 15.0% per year
- Not specifically for vehicles
- Higher interest but fewer restrictions
- Faster approval process
Bottom line: Foreign residents typically pay 2%-8% interest depending on visa status, income, and guarantor availability.
Requirements for Car Loans in Japan
Banks want to see you’re reliable. Here’s what you need:
Visa and Residency Status
Your visa type matters a lot.
Best chances:
- Permanent residency (永住者) – easiest approval
- Spouse of Japanese national – good approval odds
- Highly skilled professional visa – strong position
- Long-term resident visa – decent chances
Harder but possible:
- Work visas (engineer, specialist) with 1+ year remaining
- Student visas (usually need guarantor)
Very difficult:
- Tourist visas – basically impossible
- Short-term visas under 6 months
Your visa must extend beyond the loan term. If you want a 3-year loan, your visa should have at least 3 years remaining. Otherwise, banks limit your loan to your visa length.
Income Requirements
Banks typically want:
Minimum annual income: ¥2,000,000 – ¥3,000,000
Employment status:
- Full-time employees preferred
- Self-employed need business records and tax returns
- Part-time workers face tougher approval (but Suruga Bank accepts them)
Length of employment:
- At least 1 year with current employer is ideal
- Some banks accept less if income is strong
Time Living in Japan
The longer you’ve lived in Japan, the better.
Banks feel more confident if you:
- Lived in Japan for 2+ years
- Renewed your visa multiple times
- Have a Japanese bank account with history
- Pay bills on time (phone, utilities, rent)
Japanese Guarantor
Many banks require a guarantor (保証人) – someone who promises to pay if you don’t.
Good guarantors:
- Japanese citizens aged 18-65
- Stable employment and good credit
- Family members or close friends
- Your Japanese spouse (if married)
No guarantor? Try Suruga Bank, SMBC Prestia, or Shinsei Bank. They sometimes approve without one.
Documents You Need to Apply
Gather these before visiting the bank:
Identity documents:
- Valid passport
- Residence card (Zairyu Card) with address
- Japanese driver’s license (if you have one)
Income proof:
- Last 3 months of pay slips
- Employment certificate from your company
- Tax returns or withholding slips
- Bank statements (3-6 months)
Car purchase proof:
- Vehicle quotation from dealer
- Car registration details
- Purchase agreement or contract
If you have a guarantor:
- Guarantor’s ID and seal registration
- Guarantor’s income proof
- Guarantor’s residence certificate
Additional for self-employed:
- Business registration documents
- Last 2 years of tax returns
- Profit/loss statements
Dealer Financing vs Bank Loans
You have two main options when buying a second hand car in Japan. Let’s compare:
Bank Loans
Advantages:
- Lower interest rates (1.5%-5%)
- You own the car immediately
- Can negotiate better car prices (cash equivalent)
- No dealer markup
Disadvantages:
- Harder approval process
- More paperwork
- Takes longer (1-2 weeks)
- Usually need good credit
Dealer Financing
Advantages:
- Easier approval
- Fast process (same day sometimes)
- Convenient (everything at dealership)
- Sometimes promotional rates
Disadvantages:
- Higher interest rates (2%-8%)
- May have service fees
- Dealer owns car until paid off
- Less room to negotiate price
Which is better? If you qualify for a bank loan, go with that – you’ll save money. If banks reject you, dealer financing is a solid backup.
Step-by-Step: How to Get a Car Loan
Step 1: Check Your Visa Status
Look at your residence card. How much time remains? This determines your maximum loan length.
If your visa expires in 2 years, banks won’t give you a 5-year loan.
Step 2: Choose Your Financing Route
Decide: bank loan or dealer financing?
Bank loan route: Better rates but more work Dealer financing: Easier but costs more
You can try both. Apply for a bank loan first. If rejected, use dealer financing.
Step 3: Find a Guarantor (If Needed)
If you don’t have permanent residency, start looking for a guarantor now.
Ask:
- Your Japanese spouse
- Close Japanese friends
- Coworkers you trust
- Family members in Japan
Be honest about the commitment. They’re responsible if you can’t pay.
Step 4: Gather All Documents
Collect everything from the documents list above. Missing papers slow down approval.
Make copies of everything. Keep originals safe.
Step 5: Get a Vehicle Quote
Choose the car you want from a car dealer or a car listing site.
Get an official quotation showing:
- Car price
- Registration fees
- Insurance costs
- Any other charges
Banks need to know the exact amount you’re borrowing.
Step 6: Apply for the Loan
At a bank: Visit the branch and tell them you want a car loan. Bring all documents.
If your Japanese isn’t strong, bring a friend who speaks Japanese or ask if they have English-speaking staff.
Online (Suruga Bank): Fill out the online application and upload documents. Easier if you speak limited Japanese.
Step 7: Wait for Approval
Banks take 3-10 business days to review your application.
They might:
- Call your employer to verify employment
- Check your credit history
- Contact your guarantor
- Ask for additional documents
Step 8: Sign the Contract
If approved, you’ll sign the loan agreement.
Read everything carefully. Key things to check:
- Total interest you’ll pay
- Monthly payment amount
- Loan term length
- Penalties for late payment
- Rules about early repayment
Don’t understand something? Ask. Don’t sign until you’re clear.
Step 9: Complete Your Car Purchase
Once the loan is approved and money transferred, finish buying your car.
You’ll also need:
- Parking certificate (shakoshomei)
- Car insurance
- Vehicle registration
Many English-speaking dealers help with all this paperwork.
How Much Can You Borrow?
Loan amounts depend on:
Your income: Banks typically lend up to 40% of your annual income for car payments.
Example: If you earn ¥3,000,000/year, your maximum yearly car payment is ¥1,200,000 (¥100,000/month).
Car value: Usually you can borrow 100% of the car price for new cars, and 80%-100% for used cars.
Down payment: Some banks require 10%-20% down payment. Others offer zero down (but with higher rates).
Maximum amounts:
- Suruga Bank: Up to ¥3,000,000
- Most banks: ¥500,000 – ¥5,000,000
- Luxury car loans: Up to ¥10,000,000+
Loan Terms and Monthly Payments
Standard loan terms: 1 to 7 years
For foreigners: Often limited by visa length. If your visa expires in 3 years, your maximum loan term is 3 years.
Shorter terms mean:
- Higher monthly payments
- Less total interest paid
- Faster car ownership
Longer terms mean:
- Lower monthly payments
- More total interest paid
- Years of debt
Example Monthly Payments
¥1,000,000 loan at 4% interest:
- 3 years: ¥29,530/month (total interest: ¥63,080)
- 5 years: ¥18,400/month (total interest: ¥104,000)
- 7 years: ¥13,600/month (total interest: ¥142,560)
Choose a term you can afford comfortably. Don’t stretch just to get a nicer car.
What If Banks Reject You?
Don’t give up. Try these options:
Get a Japanese Guarantor
This is the biggest game-changer. A guarantor can turn a rejection into approval.
Your Japanese spouse is ideal. No spouse? Ask trusted friends or coworkers.
Try Multiple Banks
Different banks have different criteria. Rejection from MUFG doesn’t mean Suruga will reject you.
Apply to 2-3 banks. Don’t spam applications though – too many rejections hurt.
Build Credit First
If you’re new to Japan, consider:
- Opening a Japanese bank account
- Getting a Japanese credit card and using it responsibly
- Paying all bills on time for 6 months
- Taking a small personal loan and repaying it
Then reapply for the car loan.
Use Dealer In-House Financing
Dealer financing is more flexible. They want to sell cars, so they’re motivated to help.
Yes, you’ll pay higher interest (4%-12%). But you get the car now and can refinance later when your credit improves.
Buy a Cheaper Car
If you’re asking for ¥2,000,000 and getting rejected, try financing ¥1,000,000 instead.
Cheaper cars mean:
- Lower risk for banks
- Easier approval
- Smaller monthly payments
You can always upgrade later.
Save a Larger Down Payment
Putting down 30%-50% shows banks you’re serious and reduces their risk.
If you can’t finance ¥2,000,000, maybe you can finance ¥1,000,000 with ¥1,000,000 down.
Special Situations for Foreigners
Students in Japan
Student visas make financing very hard. But possible if:
You have a part-time job with stable income Your visa has 1+ years remaining You get a Japanese guarantor (almost always required) You save for a large down payment (30%+)
Suruga Bank is your best bet – they specifically mention accepting part-time workers.
Self-Employed Foreigners
Self-employment makes approval harder. Banks want to see:
At least 2 years of business operation Consistent income (not wildly fluctuating) Proper tax filings in Japan Business registration documents
Your income will be heavily scrutinized. Expect to provide detailed financial records.
Married to a Japanese National
This is a strong position. Your spouse can be your guarantor, which greatly improves approval odds.
Some banks see spousal visa holders as lower flight risk since you’re married to someone in Japan.
Short-Term Visa Holders
If your visa has less than 1 year remaining, most banks won’t help.
Options:
- Renew your visa first, then apply
- Use in-house dealer financing (sometimes more flexible)
- Buy a cheaper car with cash
- Wait until visa renewal
Tips to Get Better Interest Rates
Have permanent residency: This is the single biggest factor. Rates drop significantly.
Use a Japanese guarantor: Even without permanent residency, a guarantor lowers rates.
Larger down payment: 20%+ down can reduce your rate by 0.5%-1%.
Shorter loan term: 3 years instead of 5 years often means better rates.
Good credit history: If you’ve had Japanese credit cards or loans with perfect payment history, mention this.
Choose the right car: New cars sometimes get promotional rates. Fuel-efficient cars might qualify for “eco” loan discounts.
Have a relationship with the bank: If you’ve banked with SMBC for years, try their auto loan first. Existing customers get preferential rates.
Hidden Costs to Watch For
Car loans aren’t just the interest. Watch for:
Processing fees: ¥10,000-¥50,000 upfront Guarantor fees: Some banks charge for guarantor services Insurance requirements: Lenders may require comprehensive insurance (more expensive) Early repayment penalties: Some loans charge fees if you pay off early Service fees: Dealer financing often includes hidden service charges
Always ask: “What is the total amount I’ll pay over the loan term?”
This number includes everything. Compare this across different lenders, not just the interest rate.
Should You Finance or Pay Cash?
This depends on your situation.
Finance if:
- You don’t have enough savings
- Your cash is earning good returns elsewhere
- You’re building Japanese credit history
- Interest rates are very low (under 3%)
- You need to keep emergency savings
Pay cash if:
- You have the money available
- Interest rates are high (over 6%)
- You hate debt
- You’re leaving Japan soon
- The car is very cheap
For most foreign residents, financing makes sense. It preserves your emergency fund and helps build Japanese credit.
After You Get Your Loan
Once approved, remember:
Never miss a payment. Late payments damage your credit and can trigger penalty fees.
Set up automatic payments from your bank account. This ensures you never forget.
Keep your visa current. Let the bank know immediately if you extend your visa.
Consider early repayment if you come into money. Some loans allow this without penalties.
Maintain good insurance. If the car is totaled and you’re underinsured, you still owe the full loan.
Refinancing Your Car Loan
If you got stuck with high interest (8%+) because you lacked permanent residency, you can refinance later.
Wait until:
- You get permanent residency
- You’ve made 12+ months of on-time payments
- Interest rates drop
- Your income increases significantly
Then apply for a new loan at a better rate and pay off the old one.
This can save thousands of yen over the loan term.
Common Mistakes to Avoid
Applying without a guarantor when banks clearly require one. Research requirements first.
Not reading the contract because it’s in Japanese. Get help translating. Know what you’re signing.
Buying more car than you can afford. Just because you’re approved for ¥3,000,000 doesn’t mean you should borrow it.
Ignoring the total cost. A ¥1,000,000 car at 8% interest for 5 years costs ¥1,218,000 total. That’s ¥218,000 in interest.
Forgetting about other costs. Car loans cover the vehicle. You still need to budget for parking, insurance, gas, and Shaken inspection.
Frequently Asked Questions
Can I get a car loan with less than 1 year on my visa?
Very difficult. Most banks require at least 1 year remaining. Your best option is dealer in-house financing, which is sometimes more flexible.
Do I need permanent residency to get a car loan?
No. Banks like Suruga Bank specifically offer loans to foreigners without permanent residency. However, permanent residency gets you better rates and easier approval.
What credit score do I need?
Japan doesn’t use credit scores like Western countries. Banks check your payment history with Japanese companies. If you’re new to Japan, you won’t have credit history – that’s okay, but you’ll need a guarantor.
Can I buy a car with no down payment?
Yes, some banks and dealers offer 100% financing. However, a down payment (10%-20%) improves approval chances and lowers interest rates.
How long does loan approval take?
Bank loans: 3-10 business days. Dealer financing: Often same-day or next-day. Online applications (Suruga): About 1 week.
What happens if I leave Japan before paying off the loan?
You’re legally required to pay the full loan before leaving. Options: Sell the car and use proceeds to pay off the loan, or transfer the loan to someone else (rare and complicated). Don’t just leave – this damages your credit and your guarantor becomes responsible.
Can two foreigners co-apply for a car loan?
Some banks allow this, especially for married couples. Both incomes are considered, which can increase the approved amount.
Is car financing cheaper than credit card installments?
Yes. Car loans have much lower interest (2%-8%) compared to credit card installment plans (10%-18%). Always choose a proper auto loan over credit card financing.
Getting Help with Car Financing
The car loan process can feel overwhelming when you’re dealing with:
- Japanese-only documents
- Complex banking terms
- Cultural differences in lending
Many dealers who regularly work with foreign buyers offer financing assistance:
- Explanation of loan terms in English
- Help gathering required documents
- Communication with banks on your behalf
- Guidance on which lenders fit your situation
When shopping for a second hand car in Japan, ask dealers about their financing support services. This can save you hours of confusion and multiple bank visits.
Ready to Finance Your Car?
Now you know how car financing works for foreigners in Japan.
Key takeaways:
- Foreigners CAN get car loans, despite the challenges
- Banks like Suruga and SMBC Prestia work with non-permanent residents
- Interest rates typically run 2%-8% for foreign residents
- Guarantors greatly improve your approval odds
- Your visa status and time in Japan matter significantly
The process requires patience and paperwork. But thousands of foreigners successfully finance vehicles in Japan every year. With the right preparation, you can too.
Looking for a second hand car in Japan? Browse vehicles from dealers who understand foreign buyer needs and can guide you through financing, parking certificates, and all the paperwork.
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