UAE is one of the best countries for expatriates to live and work in since it boasts of so many opportunities for one to build his/her career. Personal loan is one of the financial services that many expats contemplate on taking. From debt consolidation, education funding, to the occurrence of emergencies, personal loans are quite helpful when it comes to flexibility. Explained below are the general requirements, documentations and important facts on personal loans for expatriates in the UAE.
Eligibility Criteria for Personal Loans
Employment Status
Many of the employed participant banks and financial institutions in the UAE expect expats to have employment guarantee. Normally, the bank works under a standardized remuneration policy that expects you to work under a company listed by the bank with different minimum wage limits. In general, the income prerequisite is usually within the range of AED 5,000 to AED 8,000 per month.
Age
It has been noted that the age criteria sometimes may allow obtaining a personal loan at the age of more than 21 and more than 60. Certain banks might increase the age of eligibility up to 65 years for the expats if the latter is engaged in high paid job status, or has sound financial background.
Residency
Personal loan is for the employment individuals and organizations in UAE and to avail the personal loan one has to possess a valid UAE residence visa. It is also common to find that some banks demand you to have lived in that country for a predetermined duration; it averages three to six months, showing that you are stable.
Credit History
Credit standing is especially important, therefore, applicants with no prior history of bad credits will have higher chances of getting the approval. Banks use the credit score to decide on whether to offer you credit and at what rate. In general, the favorable loan terms are associated with the credit score higher.
Documents Required
Proof of Identity
Passport valid and UAE residency visa are required absolutely. Banks can also request an Emirates ID copy from you depending on the method in which they operate.
Proof of Income
To depict financial standing, one has to submit the documents such as the most recent salary certificate produced by the employer, the pay slips of the last three months, and the bank statements. This assists the banks in confirming your sources of income and balance for instance through the repetitive monthly pay.
Employment Verification
A reference letter from the present employer stating the designation held in organization, salary structure and years of service, is generally demanded. Employment information might also be confirmed with your employer by some banks.
Additional Documents
In some banks, other requirements like the tenancy contract; utility bills or any other proof of residence may be required.
Types of personal loans
Salary transfer loans
They involve pre-equalification of transfer of one’s wages to the lending bank. In return, you may be able to access credit at a cheaper price as well as more lenient structures and conditions of repayments.
Non-Salary Transfer Loans
For the expats, who cannot or do not want to transfer their salary, there is the facility of non-salary transfer loans. But, in most of the cases, the credit unions offer these loans at a relatively higher interest rate.
Islamic personal loans
It need to mention that the UAE follows the Islamic principles of banking and finance to a large extent. Islamic car finance, known as tawarruq or murabaha are interest-free; contrary to the conventional car finance. Since then, the bank and the borrower come to terms over the matter of the profit margin.
Interest Rates and Fees
The cost of borrowing for personal loans for expats in the UAE remains a floating rate and partly depends on the quantity borrowed, the term, and creditworthiness of the applicant. In general, interest rates vary within the limit of three. 99% to 8. 99% per year. Also on the same payslip other banking related charges ranging from processing fees, early settlement fees and any other administrative charges might also be included.
Repayment Terms
Borrowing in the UAE personal loans has easy repayment facility which ranges from 12-48 months. Some banks even provide much longer terms for repayment; in particular with larger sums of loan money. It is also vital to select the most appropriate repayment plan, which would pay the loan back in the supposed manner, without any strain.
Application Process
Getting a personal loan in the UAE is easy as always as pie. Every organization which is involved in the banking sector provides its customers with an opportunity to apply for a credit card either through the Internet or through a paper-based form. The typical process involves:
Filling out the application form: This can be done here on this website, or at a bank branch of your choice.
Submitting Required Documents: Check that all the documents are correct and if not, ensure they are updated.
Awaiting Approval: The bank will reflect on your application and all the documents required which often can take a few hours to few days.
Loan Disbursement: After going through the approval process, you are credited instantaneously for the amount you that needs to be funded.
Tips for Expats
Compare Offers: It is seen that different banks offer different terms and reference to interest rates also. It cannot be emphasized enough that whatever the product or service, there is always a better price out somewhere out there, and hence make use of the comparing tools available.
Maintain a Good Credit Score: They should avoid going into too many debts and should ensure that all their debts such as bills are paid in time.
Understand the Terms: Be a little more keen and scrutinize the loan agreement, especially the petty print concerning charges and some other punitive actions.
Plan Your Repayments: Ensure that you have a clear manner through which you will be paying back the loan without causing trouble to your pockets.
Conclusion
Personal loans may be considered as one of the effective financial tools for the expats in the UAE given you would get to know about the basic requirements for obtaining this loan type, which documents are needed, and other significant information. Thus, expats can easily manage the loans and available opportunities to live a comfortable life in the UAE by choosing the right loan and managing credit score effectively.
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