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How to apply for personal loan in UAE

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How to apply for personal loan in UAE

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  1. How to apply for personal loan in UAE

  2. A large number of UAE residents look for opportunities to obtain a personal loan. The higher income and prices in the United Arab Emirates cause people to take loans at times. You can use a personal loan if you need money for any personal reason, such as purchasing a car or paying rent. Loans are available from several financial institutions, including banks, credit unions, and finance companies. The application process for a loan from a bank is the same as that from a financial institution. You can receive your funds in several ways, including by check or electronically into your checking account.

  3. The Basics When you apply for a personal loan in UAE, you must complete an application form with your contact information and other details. You may also be asked for income verification, such as a pay stub or tax return. Along with the application form, you must submit supporting documentation that shows your ability to repay the loan and pay any fees required by the lender. Many banks accept applicants with no credit rating by performing a soft inquiry of their credit report before approving them for an unsecured loan.

  4. Documentation When you apply for a personal loan in UAE, banks typically require some documentation. For example, if your bank requires that your income be verified to demonstrate that you can repay the loan (and cover the associated fees), you may be asked to submit one or more of the following: • Bank statements showing direct deposits into your account • Pay stubs or other income verification documents • A letter from your employer confirming your employment status with the company, salary, and length of time with the organization • Your most recent tax return. If you are unable to provide any of these documents, speak with the loan officer at your bank about other possible documentation that can verify your income.

  5. How Much Do You Want to Borrow? When you apply for a personal loan in UAE, interest rates on these loans vary based on your credit score and debt-to-income ratio (how much of your monthly income goes toward paying off existing debt). Generally speaking, interest rates will be lower on larger loans because the risk of default is less. For example, if you borrow AED 100,000 from your bank and have high debt-to-income ratio, expect to pay about 10 percent in annual interest on that loan. If you have very little existing debt or a low debt-to-income ratio, a loan of AED 100,000 may cost as little as 5 percent or less. The minimum amount for a personal loan in UAE is AED 10,000. The maximum allowed depends on the financial institution from which you are borrowing and other factors unique to your situation. Some banks allow customers to take out loans up to AED 10 million.

  6. Repaying the Loan You must make timely payments on your personal loan in UAE with most lenders. Failure to make timely payments will result in additional fees and penalties with most banks, including foreclosure on any collateral you provide for the loan (if applicable). Your bank also may report you as delinquent to a credit reporting agency if you fail to make a payment on time. Terms of the Loan You have several options when it comes to repaying your personal loan in UAE. Your bank may allow up to five years for repayment of the loan. If you choose this option, you will pay lower monthly payments but more interest over the life of the loan. Some lenders allow flexible repayment terms, such as payment over 12 months instead of five — but with higher monthly payments — to help you repay the loan more quickly and reduce the amount of interest you pay over time.

  7. Lenders and Interest Rates When you apply for a personal loan in UAE, your bank or another financial institution will determine whether you qualify for a loan and what interest rates to charge. The following table shows the minimum and maximum interest rate ranges that banks in this country usually charge borrowers: Minimum Maximum Bank A: Personal loans up to AED 100,000 12% 18% Bank B: Personal loans up to AED 1 million 8% 20% Bank C: Personal loans up to AED 2 million 8% 12% Choose the best option that fits your needs and repayment schedule. Speak with a bank representative for more information about how interest rates are determined, any fees associated with the loan, and other important details you need to know before signing on the dotted line.

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