Residents of the UAE have a variety of choices for financing transactions or covering those expenditures. Savings is possibly the best place to start, but for those on a tight budget, credit cards and personal loans in Dubai, UAE are also viable options. Although there are many other alternatives that are gaining popularity around the world, such as peer to peer lending and alternative financing, the most common and preferred option is the personal loan, which has a number of advantages over the others. Personal loans of up to AED 1 million are available from UAE banks based on a number of criteria.
Personal loans are often chosen for the following reasons:
Simple and straightforward documentation. Most banks no longer need a bank statement because they can check your salary information from your bank through your IBAN, subject to your authorization.
Short term in general – The payback period can be as little as a year.
With or Without Salary transfer
There is no requirement for a security deposit.
Clear visibility on the amount of interest that will be paid over the life of the loan.
This article focuses on some main aspects of personal loans in dubai that should be understood before signing on the dotted line,
1. Compare Personal Loans
It is important to be aware of the different types of loans available on the market. Personal loans are available from UAE banks with or without salary transfer. Loans are sold at a higher interest rate to those who do not have an income transfer than to those who do. The best places to go to compare loans are comparison sites, which are a one-stop shop for doing research before signing up. Make sure you do the math and take into account the interest rates, fines, and production costs. Personal loans from UAE banks can be compared here.
2. With or Without Salary Transfer?
Taking out a personal loan with a salary transfer is still a good idea since the interest rates are as low as 5%. However, you can consult with your HR department and see if they are okay with you moving your salary to the bank of your choosing. In most cases, HR has a tie-up with specific banks for salary processing, and the best way to start will be to recognize the banks from your HR department.
A letter from your HR department in the format stated by the bank is needed for a salary transfer loan. When anyone is not eligible for a top-up loan on their existing salary transfer loan, a personal loan without a salary transfer is recommended as a second loan. This loan will only require a salary certificate rather than a salary transfer letter from your HR department
3. Credit History dictates your loan interest rate or cost to borrow
In the United Arab Emirates, the majority of banks have switched to a credit score/credit history-based interest rate. A good credit score will get you a better interest rate.
Takeaway
Personal Loans are a convenient and popular method for purchasing products or services. BankByChoice recommends customers to make sure if there is a real need for a loan as any sort of debt must be avoided if possible. Having said that personal loans are also a simple and easy to avail with many banks in UAE moving to digital channels.As a personal finance aggregator BankByChoice has analyzed various personal loan features. Now you can check whether you are eligible to apply for a personal loan in UAE from our website on Personal loan “Check eligibility and apply online” page or quick apply for a personal loan from the below form and one of our personal loan expert will contact you soon!
