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How Do Personal Loans In UAE Work?

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Personal loan is a loan, which establishes consumer credit that is granted for personal use. It is typically unsecured and based on the integrity of borrower and his ability to repay.

Features of personal loans in UAE:

The main feature of personal loan in UAE is that it is unsecured by any collateral, and this applies to even personal loan to those who are not salaried.

Collateral is just any economic resource of fundamental value such as car, boat or house, which can be repossessed by a lender in case borrower forfeits on repayment of the loan.

Let’s check out how do personal loans in UAE work!

Amount needed:

Every bank in UAE stipulates a maximum amount of loan provided to you. After you estimate how much you require, you can compare loans where the maximum pay-out is higher than you require.

Need of minimum salary

Every bank in UAE imposes a minimum level of salary you need to earn if you want to qualify for a loan. When you are searching to compare loans, choose only those with a minimum salary requirement that is less than your monthly remuneration.

Fees for arrangement

Arrangement fees are charged by the bank as soon as you take the loan and are clubbed with your principal loan amount. In some cases, arrangement fees may be offered at 0% interest, but this can rise to AED 600 or 2% of your loan amount.

Early fee for settlement

In case, you are planning to take a loan for 5 years but wish to pay off the loan much before, early settlement fee becomes a crucial factor in your judgment.

This is a fee imposed on you when you want early payoff of your loan.

You must take great care on checking the fine print because early settlement fees apply only if you settle in cash and not in case you are refinancing.

Types of interest rate

The rate of interest is a crucial criterion for raising a personal loan. But this issue is subject to much confusion.

The rate on the personal loan can be estimated in two ways: a flat rate and a reducing rate. Reducing rate is estimated on the outstanding balance of your loan.

In contrast, a flat rate is estimated on the principal amount of your loan, throughout its duration.

Hence a loan at a reducing rate of 8% is equivalent to a flat rate of 4.41%. Take care while making comparisons because one bank may be offering a flat rate loan while the other, a reducing rate loan.

Salary transfer

Banks in UAE have various rates of loan for different customers who wish to open an account and have their salaries transferred to that account on a monthly basis from their employer as opposed to a person who does not transfer his salary.

The customers, who transfer their salary, are regarded as less risky, and the banks offer them loans at very less rate. Some banks do not provide personal loans to customers who do not transfer their salary to them.

Islamic finance

In UAE, some Islamic banks follow the Shariyah Law according to which charging interest rates on loans is forbidden. Thus, you can check out for attractive loans from such banks.

Company that is not listed

In case, your employer is not listed with a bank; this will make it extremely tough to get a loan.

Extending personal loans

In case, you need to extend your personal loan; there are many options. You can get in touch with your bank to explore whether they are happy to extend your current loan. You can even have another bank to buy out your loan, which is called as re-financing.

Consolidating debts

This option helps you by merging all your loans into one loan. So, whether there are overdrawn credit cards or personal loans, there will be an offer by banks to combine these debts into one balance, which you can pay off easily.

These are all some aspects of taking personal loans in UAE. Whatever be the reason for taking out a personal loan, ensure you compare them, their arrangement fees, settlement fees, and rates.

It is also good to grow familiar with customer service level of the bank before taking on personal loans.

Things to consider when choosing credit card in Dubai

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Nowadays, the usage of credit card Dubai is very common. Because of easy transaction procedures, individuals greatly appreciate the reliability of credit cards.

Suggested post: How to choose the best credit card in uae

You can find different variety of credit cards like cash back credit cards, skywards credit cards; easy return credit cards, and others. Depending on your requirements, you can choose a suitable credit card and can flexibly manage your financial transactions.

As there are some credit card service providers in UAE, it is pretty confusing to choose the best credit cards. So, to reduce your confusions, below here some important considerations have been mentioned. Kindly go through each consideration to get the best credit card services in Dubai.

Annual Percentage Rate

Sometimes, it is not feasible to pay the credit amount in full by the due date. In such situations, the individuals carry the credit amount beyond the grace period with Annual percentage rate.

This Annual percentage rate is determined by the service provider only. Some service providers charge high APR while others charge a very nominal amount. Again, the APR varies with cash advances, balance transfers, purchases and others. So, make sure that you have knowledge about the APR for different modules.

Cost of a credit card

Though you have got the credit card for free, it’s not free. There are different charges, which are keenly associated with credit card services. Some common charges include Annual fees, over-the-limit fee, late fee, due date fee, and others.

You need to collect necessary information about the additional fees associated with credit cards. Compare credit cards of at least five service providers, and then go for a decision.

Credit limit

Every credit card has got a fixed spending limit. Thus you cannot spend beyond that limit. It is highly recommended to determine the credit limit, as per your convenience.

If you are selecting credit limit thrice or fourth of your earnings, then you may end up with high debts. You can simply get a credit card with low limits and should use the card wisely.

Attractive rewards

Yes, you can earn reward points on your every purchase through credit cards. The reputed credit card service providers offer attractive rewards to the users mainly on online shopping, service stations, grocery stores, and others.

You simply need to compare credit cards UAE and should avail the credit card with best rewards and offers.

Customer Service

Indeed, customer service is one of the important elements of a credit card. It is suggested to get a credit card with 24/7 customer support.

Look, when you are managing financial transactions through a card, there are chances you may face difficulties. In such situations, you can simply contact the customer service team and can resolve the issue.

So, if you want to get the best credit card services in UAE, then don’t forget to compare the credit cards over the mentioned factors. In case of any further confusion, feel free to communicate with the financial experts.

How to choose the best credit card in UAE ?

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Credit card Dubai

 

Finance management is one of the typical tasks, which is faced by every individual.

It doesn’t matter whether, you are living on your salary or doing your own business, managing the finance is difficult.

Sometimes, the expenses cross the limit, and hence you find it difficult to deal with the finance. Well, in such typical situations, availing loans from banks and private institutions is not handy.

This is the reason, why the individuals prefer to get a credit card. Yes, credit card eases the loan procedure and helps you in repaying the expenses instantly.

Every credit card has got its spending limit per month. Thus, now you can simply deal with your finance, without any worries. On the other side, a credit card can be a debt trap.

Most of the time, the individuals face difficulties in repaying the credit amount because of the high rate of interests.

So, before applying for a credit card UAE, you need to do good research regarding the credit card facilities and services.

In Dubai, there are some credit card service providers, which are offering financial services with best facilities. In case, you are confused in availing the best credit card services in Dubai; then you need to consider the below-mentioned tips.

 

Understand your expenditure –

This is the very first thing, which you need to do before applying for a credit card.  If you have no clear idea regarding your expenditure, then it will be very difficult for you to choose a suitable credit card service.

At present, different types of credit cards are offered by the financial institutes. Some common credit card services, as per the expenditure of individuals, include cash back credit card, skywards credit card, educational finance credit cards, and others.

 

Interest rates on credit cards –

Different credit cards have different interest rates, which highly vary from each other. So, you need to pay keen attention while studying the interest rates of credit cards. It is recommended to compare credit cards by interest rates and other additional charges.

 

Credit limit of a credit card –

It is recommended to get a credit card as per your monthly income. Don’t go for a credit card with high spending limits, or else you might end with serious debt issues.

 

Annual fees –

The service providers charge an annual fee from the cardholders to ensure proper maintenance. Again, there are also some service providers, who don’t charge any annual fees and offer lifetime validity of credit card. So, choose as per your convenience.

So, these are some of the important facts, which should be considered to compare credit cards UAE.

It is recommended to compare at least 5-6 credit card services to choose the best. In case, you are having any issues in understanding the modules of a credit card; you can seek necessary consultation from financial experts.

Don’t take any decision in hurry or else you may land in serious trouble. Consider all the terms and conditions keenly, and then opt for the credit card services in Dubai.

 

Best deals on personal loan in UAE 2019

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Find the Best Personal in UAE
Find Personal Loans from a wide range of banks in UAE that best suits your needs. 

Looking for best deals on personal loan in UAE ?

Before we get into the nits and bits of getting the best deals on the loan you desire, you should remember that personal loans come with an interest rate that is higher than the normal loans where you provide the bank with collateral to get the loan.

However, personal loans are harder to get sanctioned as it is purely based on your financial reputation and your ability to pay back the sum which includes your credit score.

Now that you have decided to get a personal loan let’s take a look at some of the pointers that you should remember to ensure the best possible deal with the lowest rate of interest.

Compare and Analyze Personal Loan:

If you desire a personal loan in UAE, the best way to get beneficial deals is to compare the plans from different banks followed by an in-depth analysis of the all the plans and their associated interest rates.

With modern-day technologies at your disposal, you can easily obtain all the plan details from the comfort of your home.

This will enable you to pick the best lender to help lower all your associated expenses. You can compare personal loan plans that include different procedures such as documentation and its complexity, processing charges, charges for pre-closure, customer support as well as an online tracking system.

Excellent credit score:

The process of getting your personal loan Dubai approved by the lender requires you to have a credit score that is eligible for a loan amount that you desire.

If you take a look at the interest rates provided by various banks, you will notice one thing that a great credit score gets you lower interest rates.

This is because you the banks believe you have the potential to return the money you owe. A good credit score can be earned from timely payment of bills and paying back your past loans in the time allotted to you.

Make sure you build a matrix to pay back the loan amount before the allotted time to maintain a great credit score because even a minor delay could affect your score.

Look for seasonal offers:

As you apply for a personal loan in Dubai, make sure you look through numerous gifts, seasonal offers or waivers provided by different lenders to boost the business.

Opting for a personal loan as the offers are on, shall get you discounted interest rates and if not some gifts or small holiday packages. Make sure you get the best out of the sale season for a personal loan that isn’t heavy on your pockets.

A careful analysis and proper study of the plans from banks located close to you can bag you a deal that takes care of your needs while being careful not to be heavy on your daily expenses.

Being vigilant and asking the right questions will make you a customer that gets the best benefits out of the banks.

4 Tips for getting Personal loan in UAE 2018

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personal loan in uae

 

With weddings, education, events, vacations and several other basic expenses to be covered, a personal loan might seem to be a feasible option.

A personal loan is when the bank provides you with your requested amount, just by your earnings and personal reputation that includes your credit score.

However, loan based on reputation also has a chance of being declined if you do not fit the profile. So before you go ahead and meet the bank officials for your requirement, make sure your profile is strong enough.

Type of personal loan requirement

In order to avail personal loan in uae , first you need to understand the types of personal loans. Well, there are different varieties of personal loans which are offered by the financial institutions.

Some common personal loans include Convertible loans, Fixed-rate loans, Installment loans, Payday loans, Secured loans, Single-payment loans, unsecured loans, Variable-rate loans, and others. You have to determine your requirements first, in order to avail a suitable personal loan in UAE.

Keep your credit score in check:

A credit score is one of the important components of personal loan. The Moneylender will check your eligibility through credit score, so it is recommended to maintain a good credit score all the time.

Make sure you do not attempt to obtain a loan unless you require it. This is because every time you apply for a loan, it gets recorded in your credit score which could damage your future chances of getting a loan approved.

Increase your credit score:

You have every chance to improve your credit score which could get you lower rates of interest when you get that loan approved.

To improve your score, make sure you pay all your pending bills on time. Always make sure you are free from any negative trait on your overall credit history which also includes late payment of bills.

The ratio between your debt and income:

If you apply for a personal loan in Dubai, make sure what you earn is sufficient enough to pay back the loan in time. A loan amount that is much more than your income can land you in trouble especially when you are unable to pay back the EMIs on time.

Once you have prepared yourself for all the basic checks before getting a personal loan approved, go to the best bank in your area that can provide you loans at less interest according to your credit score.

Make sure you compare personal loan from different banks and its variations. In case, you are in confusion, don’t hesitate to consult with the financial experts.

How to Buy a Home in Dubai with a Monthly Salary of 10,000 Dirhams?

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Dubai is a real estate paradise with a large expat population in residence. Attractive payment plans and low sales prices provided by property developers are causing more first time buyers of homes to rush to buying property.

RELATED: Tired of renting? Start owning! Click here to compare mortgages in UAE and to own your dream home in UAE! 

This rush in real estate activity is also due to innovative and Latest mortgage products by certain local banks. Even someone with a monthly salary of Dh10,000 can venture into the property market. All they need is a capacity to arrange for registration charges and up-front payment.
Many properties are available to cater to a wide range of income brackets. Two big barriers to property ownership – high prices and poor accessibility to a home mortgage – have been overcome. This has boosted real estate activity.

Those with monthly income between Dh15,000 and Dh10,000 can now easily purchase apartments. According to market insiders, the average one bedroom apartment in fresh residential areas like Liwan, Silicon Oasis, etc. costs around Dh600,000.

This needs down payment of Dh150,000 and registration expenses of Dh 30,000. The EMI for the buyer is Dh2,200 a month. This figure can be easily managed by people earning around Dh 15,000 a month, as it is less than their current monthly rental.

CHECK ALSO: Calculate monthly Mortgage charges in UAE Mortgage Calculator

In 2018, the topmost affordable properties to persons with monthly income of around Dh 10,000 are Dubai South, Al Furjan, JVC (Jumeirah Village Circle) and International city.

For those with a monthly income of Dh15,000 and above, leading properties are located in Dubai Sports City, Business Bay, JVC and Dubai South.

The issue is whether a person earning a monthly income of Dh10,000 is eligible for a mortgage. Provided customer does not have any other major loans, he can easily avail of a home loan for 25 years.