Can I transfer my loan to a different bank that charges lower interest?
Yes, certain banks do allow you to transfer an existing loan to another provider that charges a lower rate of interest.
Do I need to take out insurance on my personal loan?
Some loan providers may provide insurance cover on your loan. If not, we advise that you take out your own insurance to cover you in the event of being unable to repay your loan due to loss of job, illness or death.
What if I need to extend my personal loan?
If you wish to extend your personal loan, contact your loan provider. They may be happy to extend your current loan or you may be able to refinance which means you buy out your loan by another bank.
What documents do I need in order to apply for a personal loan?
This will depend on your chosen loan provider but in most cases, you will need to show:
- Salary Transfer Certificate
- Copy of valid passport
- Proof of UAE residency status
- Three months of bank statements that reflect regular salary credits
What is the difference between Flat and Reducing Interest Rates?
Rates on personal loans can be calculated in two ways - as a reducing rate or as a flat rate. With a flat rate, the rate is calculated on the entire principal amount of a loan (the full, original amount borrowed) whereas with a reducing interest rate, interest is charged only on the outstanding amount of the loan on a periodic basis.
Flat interest rates are normally lower than the reducing balance rate and therefore considered misleading. When it comes to comparing loans, the best way to compare their true cost is to convert everything into the Reducing Interest Rate equivalent (click here
for more information)
What is an early settlement fee?
This relates to the fee applicable if you decide to pay off your loan early. If, for example, you take a personal loan for three years but expect to be in a position to pay if off before then, any early settlement fee becomes an important factor in choosing your loan provider. The UAE Central Bank caps the early repayment fee at 1% of the outstanding loan amount.
What key criteria should I consider before taking out a personal loan?
- Amount required – UAE banks have a maximum loan amount they will provide you so decide how much you want to borrow and then compare those banks whose maximum loan amounts exceed this. There is a maximum loan amount determined by whether you are a UAE national or an expat
- Minimum salary requirement – UAE banks normally impose a minimum salary required to take out a personal loan so select a provider from those whose minimum salary requirement is less or the same as your salary
- Interest rates – do flat or reducing interest rates apply? See below for details of how these differ
- Fees – consider all fees applicable such as arrangement fees and early settlement fees
- Other benefits – does the bank provide options for a payment holiday
What can I use a personal loan for?
You can use a personal loan for any number of reasons. They are often taken out to cover the costs of travel, a marriage or home improvements. As the name suggests, a personal loan can be used for any personal purpose.
How do I choose a personal loan provider?
Compare, compare, compare! Use our smart comparison tools to choose the best personal loan for you.