Personal Finance
A personal loan is an unsecured form of financing granted to applicants based on their credit history and repayment capacity. Repayment typically occurs through Equated Monthly Installments (EMI) as stipulated in the agreement with the bank, and the loan amount is designated for the individual's personal use without the need to specify its purpose. While considered one of the more expensive loan options, there is substantial demand for personal loans driven by various factors such as personal commitments, education expenses, and medical emergencies. Obtaining a personal loan in the UAE is facilitated by the banks' immediate support for loan seekers, with smaller EMIs making it easier for consumers to manage. Notably, personal loans in Dubai are unsecured, based on the borrower's integrity and ability to repay, and are described by employees as a sum provided for personal benefit that must be repaid within a specified timeframe, with no foreclosure charges typically applied.
Calculate the EMI for you Personal Loan.
Types of Personal Loans in UAE
1)Personal Loans in the UAE for Expatriates:
Expatriates, individuals who reside in the UAE for employment or business purposes, have the opportunity to access the most competitive interest rates available for personal loans in the country.
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2) Personal Loans for UAE Professionals without Company Listing:
Personal loans are now accessible to professionals employed in non-listed companies or startup ventures, with a range of custom-tailored products designed specifically for these non-listed enterprises that have recently entered the market. Explore our offerings for personal loans tailored to non-listed companies in the UAE.
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3) Personal Loans in the UAE without Salary Transfer :
Certain providers offer personal loans without necessitating the transfer of the applicant's salary to their institution, providing adaptable personal loan criteria.
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4) Personal Loans in the UAE with Salary Transfer:
The majority of UAE loan providers require applicants to maintain a salary account with the bank, ensuring rapid access to instant personal loans.
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5) Personal Loans for UAE Nationals:
UAE Nationals can take advantage of notably favorable personal loan requirements in comparison to those applicable to expatriates seeking personal loans in the UAE.
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6) Personal Loans in the UAE for Self-Employed Professionals:
Self-employed professionals, entrepreneurs who own and operate their own businesses, have the option to apply for personal loans through select financial institutions in the UAE, allowing them to access the most competitive personal loan rates available.
Features of Personal Loans in UAE
Unsecured Loans:
These loans do not necessitate any collateral for approval.
Salary Transfer vs. Non-Salary Transfer:
Opting for salary transfers enables borrowers to access substantial loan amounts with the added advantage of lower interest rates.
Rate of Interest:
In the United Arab Emirates (UAE), bank loans are subject to two distinct interest rate structures, namely reducing and flat rates.
Top-up Loans:
Borrowers, who diligently make regular payments on their existing loans, are eligible to avail top-up loans, enhancing their borrowing capacity.
Loan Cancellation:
The most exceptional personal loans available in Dubai and other UAE Emirates provide the flexibility to cancel the loan within a specified grace period.
Installment Deferment:
Borrowers have the option to defer their monthly installment payments for a predetermined period, offering financial flexibility.
Debit and Credit Cards:
Certain personal loan offerings in the UAE include complimentary debit and credit cards as part of the package.
Insurance or Takaful:
Insurance or Takaful coverage safeguards against unforeseen events causing loss of income, ensuring that outstanding loan dues are covered.
Cashback and Statement Credit:
Select personal loan options in the UAE reward borrowers with appealing incentives, such as cashback or statement credits.
Eligibility Criteria for Personal Loans in UAE
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The applicant needs to be minimum of 21 years
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Employment Status - Salaried or Self-employed
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The employment duration needs to be a minimum 3 months to 1 year
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The loan applicant's minimum salary 5000AED.
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Interest rates starting from a minimum 2.69% to up to 17.99%
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Monthly repayment 6Month to 48Month
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Monthly transfer of Salary is a must. In alternative case, the applicant needs to provide a salary certificate from the company.
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The maximum age for an applicant who is UAE national at the time of loan maturity is 60 years. For expatriates, the maximum age can be 65 years.
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Minimum Credit Score of at least 580 - The exact amount varies depending on bank policy
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Maximum Loan Amount - Expats - 3000K, UAE nationals 5000K
Documents Required for Personal Loans in UAE
UAE Nationals | Expatriates |
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Emirates ID | Emirates ID |
Salary certificate (for salaried individuals) | A Copy of Valid Passport and Residence Visa |
Salary Transfer Letter (for salaried individuals) | Salary Certificate (for salaried individuals) |
Bank Statements of last 3 to 6 months | Salary Transfer Letter (for salaried individuals) |
Trade licence (for self-employed individuals) | Bank Statements of last 3 to 6 months |
Power of Attorney (for self-employed individuals) | Trade Licence (for self-employed individuals) |
Power of Attorney (for self-employed individuals) |
Fees and Charges on Personal Loans in UAE
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Processing Fees: Most banks in the UAE typically charge a processing fee or arrangement fee for personal loans, ranging from 1% to 2% of the loan amount. Some banks may offer discounts on this fee.
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Early Settlement Fees: When a borrower repays the personal loan before the scheduled tenure, they may incur an early settlement or pre-settlement fee, typically amounting to 1% to 3% of the outstanding loan balance.
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Partial Settlement Fees: Borrowers who wish to make a partial settlement on their loan often face a fee, typically ranging from 1% to 3% of the partial settlement amount. Certain UAE banks may provide one free partial settlement facility annually.
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Late Payment Fees: Failing to pay a loan installment by the due date incurs a late payment fee. In the UAE, the minimum late payment fee is usually AED 50.
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Credit Life Insurance Charges: Some banks may impose a credit life insurance charge, typically around 1%, to secure the loan amount in case of unforeseen events. While mandatory at some banks, it's optional at others.
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Loan Rescheduling Fees: Personal loan holders can opt to reschedule their loan tenure, often incurring a loan rescheduling fee, which usually starts from AED 250.
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Loan Cancellation Fees: Should a loan applicant choose to cancel the loan after approval, a cancellation fee, typically starting at AED 100, will apply.
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Liability/No Liability Letter: Banks issue liability or no liability letters to their loan holders, with a minimum fee of AED 50 charged for this service.
Process of Obtaining Personal Loans in UAE
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Application: To begin, when you've assembled all the necessary documentation for a personal loan, you can obtain the application form from your chosen bank and complete it accurately.
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Processing: Subsequently, the bank undertakes a comprehensive review of all the submitted documents once you've submitted your personal loan application.
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Credit Check: Following document verification, the bank will initiate a credit check by requesting your credit history from a credit bureau.
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Approval: After the credit bureau's credit inquiry, your loan application is assessed, and upon meeting the criteria, it gets approved.
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Funds Disbursement: Once your personal loan application is approved, the bank proceeds to disburse the loan amount into your designated bank account.
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Repayments: With the loan now disbursed, you are required to make regular monthly payments according to the terms and conditions specified by the bank.