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Compare Personal Loan Interest Rates  before applying in the UAE!

Personal loans come in a variety of forms and can be secured or unsecured. A secured personal loan requires you to provide security in the form of an item of value in case you are unable to repay the loan. In the event of default, the lender will take possession of that asset. Auto loans and mortgages are two examples of secured debt.

The most typical personal loan kind, an unsecured loan, doesn't need you to put up security. Lenders are unable to seize any of your assets if you don't repay the loan. It doesn't follow that there won't be consequences. Your credit score will suffer if you are unable to make payments on an unsecured personal loan, which might significantly increase the cost of borrowing. In addition, the lender has the right to sue you to recover any unpaid debt, interest, or fees.

That's why it is necessary to check the interest rates levied on the loan sanctioned to you, so that you may not face any hindrances whilst the repayment of the loan amount. Thus in this blog, Dhanguard will set out a comparison of multiple Personal Loans provided by different Banks in the UAE, which will help you in better deciphering which loan to select as per your requirements. So without any further ado, let’s learn!

Comparison of Personal Loan Interest Rates in UAE

Below mentioned are the Banks in UAE, which provide personal loans to Nationals or Expats at their respective Interest Rates-

RAKBANK Personal Loan

About the Loan-

  • Minimum Salary Requirement- AED 5,000

  • Reducing Rate- 4.99%

  • Maximum Loan Amount provided- AED 1,500,000

  • Early Settlement Fee- 1%

  • Arrangement Fee- 1%

 

Features of the Loan-

  1. Provides Loan at less salary threshold

  2. You can obtain a free credit card from RAK Bank with no annual charge.

  3. Provide life insurance for a reasonable price

  4. May use the debt consolidation option

  5. Payroll must be transferred to a RAK Bank Account.

  6. After a year, you can increase your loan's balance to its original amount.

  7. Free one year installment deferral is possible with monthly installment payments of at least six months.

  8. Free debit card and cheque book are available.

CBI Personal Loan

About the Loan-

  • Flat Rate- 3%

  • Minimum Salary Requirement- AED 8,000

  • Reducing Rate- 6.75%

  • Maximum Loan Amount provided- AED 1,000,000

  • Early Settlement Fee- 1%

  • Arrangement Fee- 1%

 

Features of the Loan-

  1. The bank gives out High Financing Amounts

  2. No cost rewards credit card

  3. Current account has overdraft capability

  4. Financial services via phone

  5. Furthermore, a credit card that is interest free is provided.

  6. Enables the purchase of insurance for both death and permanent disability

Dubai Islamic Bank Al Islami Goods Finance for UAE Nationals

About the Loan-

  • Flat Rate- 6%

  • Minimum Salary Requirement- AED 3,000

  • Reducing Rate- 11%

  • Max Loan Amount provided- AED 400,000

  • Early Settlement Fee- 1%

 

Features of the Loan-

  1. Enables the purchase of products using financing

  2. Based on the applicant's profile, the maximum amount of financing will be approved.

  3. Affords the necessary funding at less salary requirement

  4. Applicants must be UAE citizens only.

  5. Can obtain funding to buy sharia compliant products as well as electronics, furniture, a boat, jet skis, etc.

Emirates NBD Self Employed Personal Loan for Individuals or Entities

  • Flat Rate- 11.51%

  • Minimum Salary Requirement- AED 25,000

  • Reducing Rate- 19.99%

  • Tenure of Loan- Upto 4 Years

  • Maximum Loan Amount provided- AED 300,000

  • Early Settlement Fee- 1%

  • Arrangement Fee- 1%

  • Salary Transfer- Not Mandatory

 

Read More: Escalate your Imports/Exports Business by Learning about Trade Financing!

 

Features of the Loan- 

 

  1. Long repayment period

  2. Both foreign nationals and UAE citizens may apply for this programme.

  3. It's easy and simple to document.

  4. Applicants are eligible for loans of up to AED 300,000.

  5. There are around 560 Emirates NBD ATMs located throughout the UAE.

 

Dubai Islamic Bank Personal Finance

  • Flat Rate- 6%

  • Minimum Salary Requirement- AED 3,000

  • Reducing Rate- 11%

  • Maximum Loan Amount provided- AED 4,000,000

  • Early Settlement Fee- 1%

 

Features of the Loan-

 

  1. Speedy loan processing

  2. Applicant can take advantage of the payment holiday benefit

  3. The applicant's business needs to be registered/ listed with the bank.

  4. There must be a salary transfer.

  5. provides loans at low salary requirements.

Before applying, be aware of these 4 Personal Loan Requirements.

History and Credit Score

One of the most crucial elements a lender takes into account when assessing a loan application is a borrower's credit score. Based on elements including payment history, total amount of debt still owed, and duration of credit history, credit scores can range from 300 to 850. Some lenders will lend to applicants with no credit history at all, but many lenders demand applicants to have a minimum score of about 600 to be eligible.

Initiation Charge

Many lenders demand that borrowers pay origination fees for personal loans to cover the costs of processing applications, doing credit checks, and closing even though these fees are not part of the qualification process. Depending on the borrower's credit score and loan size, these costs typically vary from 1 to 8 percent of the entire loan amount. While some lenders fund origination costs as a portion of the loan amount or deduct it from the final loan amount released at closing, others collect them in cash as part of the closing transaction.

Ratio of Debt to Income

The percentage of a borrower's gross monthly income that goes toward her monthly debt service is known as her debt-to-income ratio (DTI). DTI helps lenders determine whether a potential borrower will be able to make payments on both new and existing debt. Because of this, a DTI of less than 36% is preferable, while some lenders will accept an application from a highly qualified candidate with a ratio as high as 50%.

Collateral

When you apply for a secured personal loan, your lender will ask you to put up valuable assets as collateral. Collateral for loans for houses or cars is frequently connected to the loan's primary goal. However, other valuable assets, such as cash accounts, investment accounts, real estate, and collectibles like coins or precious metals, can also serve as collateral for secured personal loans. The lender has the right to reclaim the collateral in order to recover the outstanding loan balance if you miss payments or default on your loan.

Conclusion

Comparing numerous Personal Loan Interest Rates before applying is a smart move which can save you from future repayment hindrances. Also considering the above mentioned pointers before applying for a personal Loan in UAE will also assist you in making a smart decision.  Thus we hope this blog provided you with insightful information. For more information on other related aspects, feel free to visit our Branch Office or our website as well.

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Frequently Asked Questions

Personal loans that are taken from banks are automatically insured at a nominal fee and in the event of any premature demise the partner insurance company covers the entire loan amount, protecting the family from any financial risk.

Assets are not required as security against your personal loan.

Normally, the only advance costs pertaining to a personal loan are dispensation and insurance fees.

According to the issuer's policy, some lenders enable the borrower to 'defer' or postpone a month's payment once every few months. To take advantage of these benefits, the borrower must make timely payments. Deferred payments do not reduce the principal amount, and hence will not lower the lowering personal loan interest rate in UAE.

Top-up or add-on personal loans are renewable loans that can be used to supplement an existing loan after the borrower has paid a certain number of payments. Top-up personal loans in the UAE are used to reward loyal, non-delinquent borrowers by providing longer tenors or reduced interest rates, depending on the bank's policy.

No, unless the bank expressly states otherwise or the student has a guarantor, a student cannot apply for this loan. The loan's eligibility restrictions include a minimum monthly salary and a maximum age range of 21 to 65 years. Some lenders may require a salary transfer and confirmation of employment with a lender-approved organization. However, some lenders offer personal loans in the UAE without requiring a company listing. As a guarantor, you can always apply for a student/education loan.

It would be up to you to decide. You should be informed that you must pay the loan's EMI from the beginning of the month, followed by the disbursal. You can take out a loan if you're confident that you'll be able to pay the monthly EMIs at the very least.

If you're having trouble paying your loan EMI, contact your bank to see if there's anything you can do. If you try to avoid the problem, it will only get worse. Banks will issue warnings before dispatching debt collectors. If you do not respond, they may designate you as a defaulter and may even take you to court for the unpaid personal loan in UAE. As a result, it is preferable that you call the bank and explain your circumstances. They may be able to lower your EMIs in some cases.

Almost all personal loans include a life insurance plan for applicants. This insurance coverage protects the borrower from having to make payments in the event of a fatal disease, permanent incapacity, or death. Some personal loans in Dubai also include life insurance plans that pay back the entire loan amount to the policyholder's family members in the event of the policyholder's death.

A personal loan can be used to pay off credit card debt. By consolidating the debt, the loan might assist in the payment of the credit card bill. When compared to credit cards, it has lower interest rates. Even if the applicant has a personal loan minimum wage of AED 2,000, you can return the loan in easy monthly installments over the following few years.

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