Rules and policies to avail a loan in the UAE


The Central Bank regulates the banking sector in the UAE and lays down the policies and regulations for granting loans to customers. Banks across the UAE follow a prudent credit policy and lending structure, backed by proper documentation, before approving of a loan to its customers. Also, they access the credit-worthiness of their customers by checking their loan repayment history.

There is an official credit bureau in UAE named the Al Etihad Credit Bureau, that keeps a record of the credit history of customers including their credit cards, loans, debts, missed payments, bounced cheques, and so on. The credit bureau of UAE avails the reports of customers from various banks about the credit history of the customers for the past two years, which is studied in depth before approving loans to them.

Guidelines to Loans in the UAE

The Central Bank in UAE has laid down the following policies which need to be followed before granting a loan to any customer.

  • The debts of a customer should not exceed 50% of his or her total income.
  • The Debt burden ratio (DBR) of the customer is assessed, which in turn ascertains the repayment capacity of the borrower, after studying the credit report of the customers.
  • When a loan of a customer extends into his or her retirement age, banks allow 30% deduction of their income or pension.

Rules and Policies for Availing Different Kinds of Loans in UAE

Personal loans

  • These loans are repaid by customers from a regular and authentic source of income like salary, indemnity, or otherwise.
  • A personal loan never exceeds 20 times of an individual’s income.
  • Personal loans should compulsorily be returned within 48 months of approval.

Car loans

  • Car loans, as the name suggests, are availed for buying a vehicle and are treated on a separate parameter as compared to personal loans.
  • Car loans do not exceed more than 80% of the car value, as per the guidelines of the Central bank of UAE.
  • Customers are expected to repay the loan with 60 months of availing it.

Interest rates

  • Interest rates charged by banks are ascertained by calculating it on the basis of a formula generated by the Central Bank of UAE.
  • The formula is:

Interest amount = Principal X Interest rate X loan period in months + 1

Required Documents vary from bank to bank.

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