At some point in their lives, everyone will apply for a loan. However, your loan application’s approval is not assured. The majority of loan applications in the UAE are turned down due to a poor credit score. In the UAE, getting a loan without a credit check is difficult.
Banks in the UAE are well renowned for checking the applicant’s credit history and being highly fussy about the applicant’s credit score. They will only approve a loan application if the credit score is good, that is, if the score is greater than 580. The higher your credit score, the more likely you are to get approved for a loan.
Why do banks check credit history?
Banks review your Al Etihad Credit Bureau (AECB) credit report before approving a loan. The credit report issued by AECB contains all of an applicant’s financial information, including previous and ongoing loans, credit card numbers, monthly income, and credit score. They use the debt to burden ratio to estimate a person’s ability to repay the loan and installments on schedule and without difficulty, taking into account your incoming and leaving cash flow.
How to get a loan without a credit score check?
A person with a low credit score will find it difficult to obtain a loan from a bank. There are banks in the UAE that offer no-salary-transfer loans and personal loans to non-listed companies, but no banks in the UAE offer unsecured loans to people with bad credit.
Aside from a personal loan in the UAE, there are a few other lending choices to consider.
Peer to Peer Lending Platforms
When someone needs money, the first thing that springs to mind is to ask a buddy. This does work, but not always and certainly not when you require a large sum of money.
In such instances, a private lender enters the scene. In the United Arab Emirates, there are just a few officially approved private lenders who make loans to those with bad credit. Typically, no credit check loans are provided by private lenders. They simply go over various documentation to verify their identity. Even if you get immediate cash, private lenders charge exorbitant interest rates that can be twice as high as bank rates, which is one of the reasons why they are not a good alternative.
When it comes to unsecured loans, banks are concerned about credit scores; but, when it comes to secured loans, banks may consider loan applications without a credit check in the UAE, but only at high-profit rates that vary by bank. You can use your valuables as collateral to secure a loan, such as a car or gold.
Lending using Credit Card
If you have a credit card, it can be considered an asset. In the UAE, you can receive a loan against your credit card or get a cash advance. However, taking out a loan against your credit card is not recommended because the interest rates are extremely high, making it a tremendous financial burden.
For salaried individuals, this is a superior alternative. Job seekers can apply for a loan based on their monthly earnings. Various popular banks in the UAE, such as RAK Bank, Emirates NBD, Dubai Islamic Bank, ADCB, and others, offer salary-based loans at affordable interest rates.
Aside from these, there are a number of other ways to obtain a loan in the UAE. Where that you might examine in order to achieve your short-term objectives. Meanwhile, work on improving your credit score, which will have a greater influence in an emergency. According to a survey, getting out of a low credit score would take at least 7 years. There is a potential that your credit score will rise. If you pay your credit card and other installments on time for three months in a row. Also, once you have a decent score, attempt to keep it.
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