Personal loans in UAE today are the preferred means of short term credit. People prefer taking personal loans to use their credit cards for large expenditures like travel, purchasing large business assets, meeting expenses like weddings, college tuition, etc.
Banks that offer personal loans in the UAE do so on the basis of two types of interest rates – flat rates and reducing rates.
A flat rate of interest on a loan refers to when the interest and sum payable is calculated at the start of the repayment schedule and does not change until the loan has been paid off. For example, A loan of AED 12,000 taken for a period of 12 months, means payments of AED 1,000 every month (without interest). Add to this the flat rate of interest at 5%, which equals AED 1,050 per month (with interest), for 12 months, which adds up to a total interest payment of AED600.
Reducing rate of interest on a loan takes into consideration the fact that, after each installment, the principal amount reduces. The interest percentage (which remains the same) is charged on the reduced amount, every month. Thus resulting in different installment amounts each month.
Best Personal Loan Offers – Interest Rates/Profit rates in UAE
Below is a comparison of the rates of interest/profits* offered by major banks in UAE
Personal Loan Comparison Table
Bank
Personal Loan
Minimum Salary
Reducing interest rate
Flat rate
Dubai Islamic Bank Al Islami Goods Finance for UAE Nationals
AED 3,000
10.97%
6.00%
Dubai Islamic Bank Al Islami Salaam Finance for UAE Nationals
AED 3,000
10.97%
6.00%
RAK Bank Personal Loan
AED 5000
9.99%
5.43%
Citibank Personal Instalment Loan
AED 8,000
17.99%
2.63%
Citibank Salary Transfer Loan
AED 8,000
8.00%
4.99%
ADIB Personal Loan For UAE Nationals
AED 5,000
6.75%
3.72%
ADIB Personal Loan for Expats
AED 5,000
6.99%
3.85%
ADCB Personal Loan for UAE Nationals
AED 5,000
5.49%
2.90%
ADCB Personal Loans for Expats
AED 5,000
5.49%
3.03%
HSBC Personal Finance
AED 7,500
5.99%
3.3%
Commercial Bank of Dubai Personal Loan for Expats
AED 12,000
5.99%
3.27%
Commercial Bank of Dubai Personal Loan for UAE Nationals
AED 12,000
5.75%
3.14%
*Interest Rates are subject to change at any time.
The aforementioned parameters help you make an assessment of the personal loan market in the UAE including the several benefits offered by most banks. Take an informed decision based on your personal financial requirements and not compromise on the little joys of life.
Top UAE Banks with Personal Loan Product Offers
Abu Dhabi Commercial Bank (ADCB)
ADCB Personal loan
Abu Dhabi Commercial Bank offers made-to-measure personal loan packages for UAE Nationals as well as expatriates residing in the UAE. The personal loan offers come with low-interest rates, higher salary multiples, and flexible eligibility criteria.
Some of the other features and benefits of ADCB personal loans are
Free credit life insurance
Longest repayment period
Consolidation of loans available
Simple documentation
Free ADCB credit card
Up to 3 times salary overdraft for UAE nationals and 2 times for expatriates.
Abu Dhabi Islamic Bank (ADIB)
ADIB Personal Loan
The Abu Dhabi Islamic Bank offers instant approval and provides personal loans of up to one million Dirhams at a highly competitive profit rate. ADIB personal loans can be used to settle conventional finance and credit cards as well and offer repayment periods of up to 48 months.
Some of the other features and benefits of ADIB personal loans are:
Freedom of trading with the shares at your will (after purchasing them from ADIB)
1% Processing Fees (Min AED 500 and Max AED 2,500)
The Dubai Islamic Bank offers personal loans at an excellent profit rate of 8.82% and a high finance amount and is considered one of the best in the UAE at present. DIB offers an upfront cash payment to the customer with no early settlement fees and a maximum loan repayment period of 48 months.
Some of the other features and benefits of DIB personal loans are:
Fixed arrangement fee ranging between AED600 and AED800
Maximum finance amount of 2 million Dirhams for UAE nationals and 1 million Dirhams for expatriates.
Emirates NBD
The Emirates NBD offers personal cash loans at competitive interest rates, low monthly payments and long repayment periods of 1 – 4 years. One of the main features of this loan is that it offers financial assistance to even those who are employed by companies that are not on the Emirates NBD approved list.
Some of the other features and benefits of Emirates NBD personal loans are:
Minimum loan amount up to AED 350,000
Loan repayment period of 1- 4 years.
Effective rate of 5.38% per annum.
Emirates Islamic Bank
EIB personal Finance
Emirates Islamic Bank offers personal Finance based on a Murabaha arrangement through the trading of Shari’a-compliant instruments like shares or Wakala certificates. EIB personal Finance comes at very competitive profit rates and is available to both salaried and self-employed customers.
Some of the other features and benefits of Emirates Islamic Bank personal Finance offers are:
Financing up to 3 million for UAE Nationals and 1 million for Expatriates.
Approvals in 24 hours
Preapproved credit card and 100% discount on first year’s annual fees
Nominal processing fees
Exclusive policy terms on buyout loans/finances
Certificate of Takaful / Insurance Cover
RAKBANK
RAKBANK is the trading name of the National Bank of Ras Al-Khaimah PJSC. It offers high personal loan amounts at low-interest rates with flexible repayment periods of up to 48 months for both UAE nationals as well as expatriates and 60 months for the staff of the Armed Forces.
Some of the other features and benefits of RAKBANK personal loans are:
Quick approvals
Top up loan after 1 year
Hassle-free takeover from other banks
Free Debit Card and personalized cheque book
Free Credit Card with no annual fee and low-interest rates
Mashreq Bank
mashreq bank Personal loan
Mashreq Bank offers personal loans of up to 1 million Dirhams with a 24-hour loan disbursal. A major feature of their personal loan is the cashback the customer will receive at the time of disbursal, which amounts to an extra 1% of the loan amount. Mashreq Bank also offers a loan repayment period of up to 4 years with an easy and straight-forward documentation and application process, with an option for Islamic Finance as well.
Get a Personal Loan without Salary Transfer from Citibank in UAE ,Citi personal Installment loan process is fast, easy, and hassle-free and online, Get a Loan Approval in 1 Day.
Some of the key features and benefits of Citi Bank personal loans are:
Loans of up to AED 250,000 (Salary transfer to Citibank required)
Loan amounts of up to 20 times of your salary
Competitive interest rates from 6.99%
Types of Personal Loans
Personal Loan for UAE Nationals
Personal Loan for Expatriates
Personal Loan for Self-employed professionals
Personal Loan without salary transfer
Islamic Personal Finance
Debt settlement / Liability consolidation loans
Salient Features and Benefits of Personal Loans
Some of the salient features of personal loans offered by banks as listed below
High loan amounts (i.e. AED 500,000 to 2 million for UAE nationals) based on monthly salary and length of employment of the customer.
Several banks offer attractive reducing interest rates starting from 4.99% or 2.63% flat p.a. depending on customer income and loan amount.
Different packages for salaried and non-salaried customers, Emiratis and Expatriates.
Several banks offer loan tenures of up to 48 months.
Most banks offer optional insurance coverage.
The minimum salary required is AED 5000 depending on the customer’s profile and income.
Several banks offer a free lifetime credit card.
Life takaful coverage is offered by various banks.
Customers can opt for top-ups depending on salary hike or as per their requirements.
Several banks offer maximum loan amount up to 20 times of monthly gross salary of their customers.
Some banks offer no payment option for the first two months.
Most banks offer the option of Islamic finance to customers.
Pull-over finance from other banks is offered in some cases.
Several banks offer value-added banking services apart from installment deferred option.
Most banks offer maximum financing for up to 4 years.
A free debit card is offered by several banks to expatriates.
Most banks also offer enhanced credit life coverage.
Customers can also avail of the loan return option is offered by some banks.
Personal Loan eligibility for UAE Nationals and Expats:
Loan eligibility in the UAE can differ from one bank to another, but the general eligibility criteria for most banks in the UAE is:
The applicant must be a minimum of 21 years of age
The length of service can range from one month to six months
The applicant must be drawing a minimum salary ranging from AED 3,000 to AED 5,000, and in some cases it may rise up to AED 15,000.
Salary transfer is generally a requirement
At the time of maturity, the maximum age for UAE nationals is 60 years and for expatriates 65 years.
Personal Loan documentation required:
The documentation required to avail of personal loans in the UAE can vary from bank to bank as well. However, the general documentation required usually consists of the following:
Completed loan application form
Identity documents (Passport copy, VISA copy, Emirates ID)
Copy of valid passport with valid UAE residence visa for expatriates (Original required for verification)
Salary transfer letter/salary certificate (For salaried employees)
Bank statements – 3 to 6 months
Trade license (For self-employed customers)
The banking sector in UAE
The banking sector in UAE is, by and large, protected, albeit, the presence of foreign banks has gradually been on the rise in the recent past. There are about 46 banks (including foreign banks) operating in the UAE. Banks incorporated in Dubai and Abu Dhabi contribute almost 90% of the total domestic assets.
Islamic banking in the UAE was legalized in 1985. As per Islamic banking, banks cannot charge fixed interest rates on loans or deposits. There is a view that the central bank of the UAE can only play a limited role in terms of setting interest rates and the monetary policy of the UAE currency is pegged to the US dollar.
Expatriate population
There is a view that most UAE banks, by and large, are wary of becoming dependent on a personal loan market share (most banks do not have robust credit reports) owing to an expatriate workforce which, more often than not, does not have long-term residency status. Expatriates in UAE can, therefore, open a bank account or avail any service only after they furnish a guarantee letter from their employers in addition to other guarantees.
Personal Loan in UAE – FAQ
Will the death of the personal loan applicant affect the family?
Personal loans taken from banks like Emirates NBD are automatically insured at a nominal fee and in the event of an untimely death the partner insurance company covers the entire loan amount, protecting the family from financial risk.
Do I need to provide security for my loan?
Assets are not required as security against your loan
Are there any advance costs involved when applying for a personal loan?
Generally, the only advance costs pertaining to a personal loan are processing and insurance fees
What is Murabaha?
Murabaha is the sale of goods as ordered by the customer with a price consisting of cost-plus promised profit margin paid on deferred installment payment.
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