A personal loan is basically every average human’s requirement at some point-of-time and so it’s rules, requirements and guidelines may vary from place-to-place and from person-to-person, therefore, here’s a quick beginner’s guide to personal loans in UAE.
A personal loan is unsecured in nature and so you do not require any guarantor or collateral to avail it. Due to which personal loans are procured for various personal requirements, some of which may be weddings, trips, higher education or even starting a new business. But ever thought of availing them and wondered about the basic requirements and the procedure to get one? Well, here’s a quick guide to get a personal loan in UAE. Read below…
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What is the maximum amount for a personal loan in UAE?
Personal loans can be availed in UAE to a maximum of 20 times the monthly salary, within a repayment period of 48 months. The personal loan amount in UAE, as well as the interest rate, is decided on the basis of several factors, some of which are:
- Employment status (of the applicant)
- Credit history
- Source of income
- Age
What is the personal loan interest rate in UAE?
The interest rate can be defined as the rate which determines the additional charge that is levied upon the principal loan amount. In UAE, personal loan interest rates are of two types:
- Flat interest: Flat interest remains constant throughout the loan tenor. It is charged on the entire principal loan amount.
- Reducing interest: On the other hand, the rate of reducing interest changes after every payment. Every time the loan borrower pays the installment, the rate of interest is reduced. This particular type of interest is only charged on the remaining loan amount.
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What is the personal loan tenor?
The personal loan tenor is the length of time until the loan is due. In UAE, personal loans can be classified as short-term or medium-term, but generally come with a shorter tenor for repayment. The repayment period starts from a minimum of 6 months and can be extended up to a maximum of 48 months.
What are the eligibility criteria for a personal loan in UAE?
The most commonly-asked requirements for personal loans in the UAE can be categorized as:
- Age limit: The requirements for a personal loan in UAE usually include a minimum age of 21 years and a maximum of anywhere between 60-65 years.
- Employment history: To avail a personal loan, it is mandatory to be employed. For some banks, the requirement is to be employed under a UAE employer, which is not the case with others. However, in either case, getting a personal loan without a company listing is impossible.
- UAE residency aka Citizenship: To apply for a personal loan in Dubai or any of the other Emirates of the UAE, the borrower must be a resident of the UAE.
- Minimum salary: Applicants must also fulfil the requirement of a minimum salary to apply for a personal loan in the UAE. This criterion, however, changes from bank-to-bank and from lender-to-lender.
What are the documents required for a personal loan in UAE?
To apply for a personal loan in Dubai or any of the other Emirates of the UAE, you would be required to submit the following documents:
- Application Form: – The first required document is the application form for the personal loan.
- ID Proof: Applicants are mandatory to have valid ID proof, that is, a passport, visa, and an Emirates ID.
- Residency Proof: To avail a personal loan in the UAE, you will also be required to present valid proof that you are a resident of the UAE.
- Bank Statement: Lenders usually ask for a bank statement of last 3-6 months to track your earning potential.
- Salary Transfer Letter: A salary transfer letter is optional and is only required by personal loans that mandate salary transfers.
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How to apply for a personal loan in UAE?
You can apply for a personal loan in the UAE either through bank branches or through the online portal. The step-by-step methods of both of the processes are:
Through bank branches
To apply directly through a bank branch, the steps are:
- Visit the branch of the bank of your choice
- Fill in the application form for the personal loan
- Make sure that you take help from a bank representative to know more about the personal loan interest rate in UAE and other factors
Through the online portal
- Online platforms are convenient and quick
- Online platforms can generally offer more generous personal loan rates in UAE
- You can use online portals to quickly compare online portals
- You are recommended to use the Personal Loan EMI Calculator
- Thus, this is the easiest way to find the lowest personal loan interest rate in UAE
Why should you opt for personal loans in UAE?
Over the last year, UAE has witnessed an enormous surge in financial lending as a result of the numerous benefits of personal loans. Go through the advantages listed below to know why we recommend you to opt for personal loans in the UAE.
- Personal loans are unsecured. You do not require collateral to obtain these loans.
- If you make regular payments for your pre-existing loans, you can enjoy the benefit of top-up loans. The borrowers can also enjoy low-interest rates, high loan amounts, and high tenures with the top-up loans.
- Some of the personal loan lenders in the market offer free credit cards and debit cards. In most cases, these cards are free for the first year as well.
- The borrowers can also postpone their monthly installments for a personal loan in case of an emergency. They can do so for a fixed period in Dubai or any of the other Emirates.
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Things to keep in mind before applying for a personal loan in UAE
If you keep the following points in mind, you can avoid rejection of your application for a personal loan in the UAE
- Keep your employment history stable.
- Maintain a good credit score.
- Make sure that you make the payments on time.
- Do not miss an installment.
- Do not apply for a new loan before you clear the outstanding loans.
Our Take…
If proceeded with caution, personal loans can be the easiest way to go forward in UAE. They do not require any security for disbursal and are generally disbursed within a few weeks. They can, thus, be your best bet in times of several personal needs.
