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How to pay off an overseas debt

Here’s everything you need to know to pay off an overseas debt after moving to Australia and get your personal finances back in the black.

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By

Tim Falk

Edited by

Joelle Grubb

Updated

Fact checked

For most of us, taking on a certain level of debt is simply a part of life. Whether it’s credit card debt or a mortgage, most people will borrow money and need to pay it back at some stage.

The quicker you pay the money back the better off you’ll be, but debt can become even more complex when you move abroad to Australia. Let’s take a look at how overseas debt works and how you can pay your creditors as quickly and easily as possible.

Compare international money transfers to pay off your overseas debt

Our table below lets you compare services you can use to send money abroad. Compare fees, exchange rates and discounts from different money transfer services, and when you have made your choice, click Go to site.
1 - 20 of 25
Updated regularly
Name Product Filter Values Fastest Transfer Speed Fees (Pay by Bank Transfer)
TorFX
TorFX
24 hours
$0
TorFX sends money overseas in 40+ currencies, with competitive rates for transfer amounts over $2,000.
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Xe Large Transfers
Xe Large Transfers
Within minutes
$0
Xe has fast transfers with low fees and a range of foreign currency tools.
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OFX
OFX
24 hours
$0
OFX has no maximum limit transfers, with competitive exchange rates for 50+ currencies.
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Send Payments
Send Payments
24 hours
$0

Send provides fee-free transfers via its 24/7 multi-currency payments platform with real-time quotes.
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Revolut
Revolut
Within minutes
$0
Send money with great rates and low fees in 30+ currencies.
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Xe Money Transfers
Xe Money Transfers
Within minutes
$0
Xe has fast transfers with low fees and a range of foreign currency tools.
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Instarem
Instarem
Within minutes
From 0%
50% off first transaction fee from any country in APAC (outside India).
Minimum transfer of $250 and max transfer of $500,000
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Wise (TransferWise)
Wise (TransferWise)
Within minutes
From 0.41%
Wise uses the mid-market rate and transparent fees to help you send money in 50+ currencies.
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TorFX
TorFX
24 hours
$0
TorFX sends money overseas in 40+ currencies, with competitive rates for transfer amounts over $2,000.
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Remitly
Remitly
Within minutes
From $0
Remitly has quick, affordable transfers around the world, with both express and economy options.
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WorldRemit
WorldRemit
Within minutes
From $0.99
Use promo code 3FREE and pay no fees on your first 3 transfers. Conditions apply.
WorldRemit sends money to 110+ countries for bank-to-bank deposits, cash pick-ups or mobile top-ups.
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Rocket Remit
Rocket Remit
Within minutes
From $0 to $5
Send money instantly to friends and family in over 45 countries using just your mobile number.
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MasterRemit
MasterRemit
Within minutes
From $0
Get your 1st and 2nd money transfer for free with promo codes FIRSTFREE and MASTERFINDER!.
Send money in minutes at competitive exchange rates to the Middle East, Africa and South Asia.
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MoneyGram
MoneyGram
Within minutes
From $1.99
MoneyGram has fast cash pick-up transfers to more than 350,000 agent locations worldwide.
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SingX
SingX
Within minutes
From 0.5%
SingX offers the real exchange rate every time you make a transfer and can help you send money across the world.
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CurrencyFair
CurrencyFair
Within minutes
€3
CurrencyFair has bank-beating exchange rates and fast transfer times on 15+ popular currencies.
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OFX
OFX
24 hours
$0
OFX has no maximum limit transfers, with competitive exchange rates for 50+ currencies.
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View details
Send Payments
Send Payments
24 hours
$0
Send provides fee-free transfers via its 24/7 multi-currency payments platform with real-time quotes.
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View details
Western Union
Western Union
Within minutes
From $0
Western Union sends money online to friends and family in 200+ countries around the world.
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Qantas Business Money
Qantas Business Money
Within minutes
$0
Earn 1 Qantas Point per every AUD$10 equivalent you transfer into foreign currencies. T&Cs apply.
Set up accounts in 11 different currencies and get rewarded for global business payments by earning Qantas Points.
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Common overseas debts

It’s not unusual for people to owe money back home when moving overseas. Below are some of the most common debts Australian people have include:

  • Credit card debt
  • Student loans and education fees
  • Car loans
  • Personal loans
  • Home loans
  • Tax debt

Whether it's for your career, romance or even a simple desire for adventure, you can still do so even if you are in debt.

Can I leave my debts behind?

In many cases, your debt won’t stop you leaving your home country and heading to Australia, but that doesn’t mean you’ll be able to leave those old debts behind and start life Down Under with a clean slate. Of course, what will happen to your debt (and to you) will vary depending on a range of factors, including the amount you owe, who you owe it to and the laws in your home country surrounding debt repayment.

There are several potential outcomes, including:

Arrest

If you owe money to the government in your home country, you could be arrested at the airport before you even depart. Alternatively, you may be refused permission to head overseas and have your passport seized.

You may face legal action

Your creditors may take legal action against you to recover their debts, and this action may continue regardless of whether or not you're in the country and able to attend court. While an overseas court may not be able to force you to pay your debt from overseas, it could allow creditors to go after whatever assets you still have in your home country.

Your credit history will suffer

If you try to skip out on your debt or fail to make repayments on time, your credit file will take a battering. This could have devastating consequences in the future if you ever plan to return to your country of origin. Your credit history could also catch up with you overseas – it all depends on whether any lender you approach for financing asks for details on your credit history in your home country.

You could lose some of your salary

If you work overseas for a company based in your home country, your pay could be garnished or withheld. For example, if you’re a US expat who works in Australia for an American company, that company is subject to US laws and may be required to dock your wages to pay off your debts.

Your creditors could catch up with you in Australia

There are plenty of other ways your creditors might seek to reclaim the money they are owed. For example, the ATO has agreements in place with tax and revenue services in many other countries around the world to force debtors to pay their bills. Banks or credit card providers may also send debt collectors after you in your new country of residence to try to reclaim their debt.

How to deal with overseas debt collectors

Dealing with debt collectors can be a worrying and intimidating experience for many, but it’s something you have to do to get your finances back on track. The best approach is to get on the front foot and work out a reasonable agreement to pay back the money you owe. By showing that you are willing to work to pay off your debt as quickly as possible, you will take some of the sting out of the situation.

It’s also important to remember that you have rights when dealing with debt collectors to ensure that you are not harassed, intimidated or treated unfairly.

How to pay off an overseas debt

The hard part of paying off an overseas debt is saving enough money to repay what you owe; the act of sending money overseas to your creditors is actually quite easy.

To get the necessary funds back to your home country you will need to send an international money transfer. There are 3 main ways to do this:

Through your bank

You can send the money from your Australian bank account to an account in your home country. This is usually the most convenient option (because you will already have an account set up and ready to go) but in many cases will also be the most expensive.

Through a cash transfer provider

Companies such as Western Union and Moneygram offer fast cash transfers from Australia to hundreds of thousands of agent locations around the world. This is a good option if cash is an accepted form of payment and if you need to pay off your debt as quickly as possible.

Through an online transfer provider

These companies, such as OFX and Wise, specialise in sending international money transfers. They tend to offer the best exchange rates and lowest transfer fees.

If you're looking for the cheapest way to transfer money overseas, online money transfer specialists will usually win out. However, you’ll need to compare international money transfer providers to find the best exchange rates and lowest transfer fees.

Example: Debbie's debt

Debbie moved to Australia from the UK in mid-2019, leaving behind a £1,500 personal loan debt. After a couple of months working in Australia and getting her finances in order, Debbie has saved enough money to pay off the amount she owes. She initially plans to send the funds straight from her account with a major Australian bank back to her old bank account, but she decides to compare her options and see if a money transfer company can offer a better deal.

The results of her comparison are shown in the table below. As you can see, Debbie can save $138.30 if she sends the transfer via an online money transfer company rather than from her bank. This shows just how important it is to shop around for the best exchange rate and lowest transfer fees.

* This is a fictional, but realistic, example.

BankOnline money transfer provider
Exchange rate1 AUD = 0.5599 GBP1 AUD = 0.5935 GBP
AUD needed to convert to £1,500$2,680$2,546
Transfer fee$22$17.70
Total cost of transfer$2,702$2,563.70

How to choose a money transfer provider

There are several factors you need to consider when choosing a company to handle your international money transfer, including:

Exchange rate

As Debbie’s example shows, a minor difference in the exchange rate can make a huge difference to the affordability of your transaction. Shop around for a company that always offers the best exchange rates, but make sure those great rates don’t come with high transfer fees attached.

Transfer fee

Compare the fee that each provider charges per transfer. Fees could be as high as $60 or $70, depending on the amount you send and where you are sending it, or as low as a few dollars. Some providers will also waive their fees on large transfers.

Transfer options

Can you lodge your transfer online, over the phone and/or by visiting a branch? Is there a smartphone or tablet transfer app?

Transfer methods

If you need to make regular repayments to your creditors, check to see whether the transfer provider allows you to set up a recurring payment schedule. Other transfer options, such as forward contracts and limit orders, can also be used to help you save time and money.

Processing time

Compare how long it will take each provider to complete your transfer. Some companies, such as Western Union, offer cash transfers that are completed within minutes, while other transfer options can take as long as 5 days.

Available currencies

Hopefully you will only have overseas debt to be repaid in one country, but if you owe money in multiple countries then you will need to make sure that your transfer provider offers support for all the relevant currencies.

Customer support

If you ever have a problem with a transfer or need help, will you be able to access the assistance you need over the phone, via email or through a live chat service?

Top tips for paying off an overseas debt

Keep an overseas bank account open

Consider keeping your existing bank account open when you move to Australia. This will give you a destination for your international money transfer and then allow you to manage debt payments via Internet banking.

Try to pay off debt before you leave

No matter which money transfer provider you choose, paying off overseas debts will still lead to additional expenses due to exchange rates and transfer fees, not to mention the added pressure of interest charges. With this in mind, take whatever steps you can to pay the debt off before you leave your home country – for example, could you use the proceeds from the sale of your house, furniture or car?

Debt collection agencies aren’t limited to one country

Moving overseas won’t help you escape your debt. Many debt collection agencies operate internationally, while other agencies can “outsource” your debt to other collectors.

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