How to apply for a personal loan in the UAE
Whether an emergency expense or debt consolidation, securing a personal loan can help you cater to your immediate financial needs. This means borrowing a fixed amount of money from the bank and repaying it through monthly instalments with interest. The Central Bank of the UAE’s policies allows citizens and expats to apply for personal loans in the UAE. Here is a complete overview of the requirements, conditions and processes on how to apply for a personal loan in the UAE.
ELIGIBILITY TO APPLY FOR A PERSONAL LOAN IN THE UAE
Like any other financial commitment, you must fulfil a few conditions to be able to apply for a personal loan in the UAE.
- You must be a UAE national or resident
- Your age must be 21 to 65 years
- Your minimum monthly salary must be AED 3k to AED 10k
- You must have a current account with an authorised UAE bank
- Personal loans cannot exceed 20 times’ the salary value or the total income of the borrower
- The maximum repayment period for personal loans can be 48 months
- Monthly deduction cannot be more than half the borrower’s salary.
Most banks prefer to offer loans to individuals working for one of their authenticated companies. If your employer is not listed with a specific bank, getting a loan in the UAE can get slightly more challenging. To check whether your company is listed with a bank, simply contact your HR department or call the bank to confirm.
So, can you get UAE personal loans if your company is not listed with a particular bank? Well, banks offer personal loans based on several factors – check with the concerned financial institution to clarify if they offer personal loans to unlisted companies in the UAE.
Please note that salary requirements may vary from bank to bank.
HOW TO APPLY FOR A PERSONAL LOAN IN THE UAE
If you meet the eligibility criteria, you can initiate a personal loan application in the UAE. To apply for a loan:
- Take into account the monthly instalment plan of your preferred bank
- See how much you can borrow
- Visit the bank or apply online
- Submit the following documents with the loan application form:
- Emirates ID
- Salary transfer letter
- A passport copy with a UAE resident visa (for expats)
- Bank account statement of three to six months
- Trade licence (for self-employed individuals)
- Wait for verification from the loan provider
Once the loan provider approves your request, the desired amount is transferred to your bank account. The process is quite similar for all major banks and financial institutions in the UAE. Whether it’s the banks in Dubai or Abu Dhabi, the process to initiate the loan request is the same.
THINGS TO REMEMBER WHEN APPLYING FOR A PERSONAL LOAN IN THE UAE
- Never apply for a loan that is 20 times your existing current salary or total income.
- The repayment duration for a personal loan should not exceed 48 months. However, if you reach retirement age while repaying the loan, the bank may reduce the deduction of the loan to only 30% of your income or pension.
- Banks will require your credit report to approve your loan, with a good credit score.
- Personal loan rates in the UAE depends on the bank; for example, ADIB’s interest rate start at 5.99% per annum.
FAQs
How to take a loan in the UAE?
You can apply for a loan through finance firms and banks in the UAE. Check out the UAE’s government website for the complete list of licenced financial institutions in the country.
WHICH IS THE BEST BANK FOR A PERSONAL LOAN IN THE UAE?
Emirates NBD, FAB and CBD are some of the options for best personal loan in the UAE. Similarly, you can check out Abu Dhabi’s banks or financial institutions located in the northern emirates.
WHICH BANK OFFERS THE LOWEST INTEREST RATE FOR A PERSONAL LOAN IN THE UAE?
The answer to this question depends upon your standards for the ‘lowest’ interest rate. Some banks might give you a loan at 2.38% interest, while others may ask for a 5.25% interest rate. Please note that the personal loan interest rate in the UAE varies from bank to bank.
And that is how you can apply for a personal loan in the UAE. If you’re looking to buy a villa or an apartment in Dubai, consider applying for home loans. You can refer to our guide on home loans in Dubai, which provides detailed information on the prerequisites for securing a mortgage in the UAE. Before applying for a loan, learn about the difference between flat and reduced interest rates.
To know more updates about the financial and property sector of the UAE, stay tuned to MyBayut.
