Types of Personal Loan in UAE

By Sakshi Srivastava - 04 Feb 2022 Last Updated: 20 May 2022
Types of Personal Loan in UAE

A personal loan is a sum of money that you can borrow for various purposes. A personal loan could be used to restructure debt, pay for home upgrades, or organize a dream wedding, for example. Banks, credit unions, and online lenders all offer personal loans. You must repay the money you borrow over time, usually with interest. Personal loans may be subject to fees from some lenders.

  • Personal loans are short-term loans that can be used to pay for a variety of personal expenses.
  • Personal loans are available through banks, credit unions, and online lenders.
  • Personal loans can be secured, in which case you must put up security to borrow money, or unsecured, in which case you do not need to put up any collateral.
  • When it comes to interest rates, fees, amounts, and payback durations, personal loans might be very different.

An Overview of Personal Loans

A personal loan enables you to borrow money to cover personal expenses and repay it over time. Personal loans are a sort of installment debt that allows you to borrow a large sum of money in a single payment. For instance, you may utilize a personal loan to pay for:

  • Moving expenses
  • Debt consolidation
  • Medical bills
  • Wedding expenses
  • Home renovations or repairs
  • Funeral costs
  • Vacation costs
  • Unexpected expenses

These loans are distinct from other installment loans that are meant to cover specific expenses, such as student loans, car loans, and mortgage loans (i.e. education, vehicle purchase, and home purchase).

A personal loan differs from a personal line of credit in several ways. The latter is not a one-time payment; rather, it functions similarly to a credit card. You have a credit line that you can use to make purchases, but your available credit decreases as you do so. Making a payment toward your credit line will then free up available credit. 

When you take out a personal loan, you usually have a set repayment deadline. A personal line of credit, on the other hand, may be open and available to you indefinitely if your account with your lender is in good standing.

What are the Types of Personal Loans in the UAE?

There are a variety of Personal Loans offered by the banks in the United Arab Emirates for both expats and UAE Nationals which are further listed below:

Expat Personal Loans

Expatriates are non-residents of the UAE who dwell in the nation for work or business purposes and can take advantage of the lowest interest rate personal loan offered in the country.

Personal Loan Without Company Listing

Professionals working in non-listed companies or start-ups can now get a personal loan through a new product line intended specifically for non-listed enterprises that have recently entered the market.

Personal Loan without Salary Transfer

Some lenders do not need applicants to transfer their earnings in order to acquire a loan, making personal loan conditions more flexible.

Personal Loan with Salary Transfer

To receive an immediate personal loan in the UAE, most loan providers require applicants to have a salary account with the bank.

Personal Loans for Residents

Personal loan standards for UAE nationals are more favorable than those granted on personal loans in the UAE for expats.

Personal Loan for Self-employed Professionals

Self-employed professionals are people who run a business and can apply for a personal loan from one of the UAE's financial institutions and get the best personal loan rates.

Personal Loan Interest Rate in Dubai

The interest rate on a personal loan in the Dubai is a fee that is added to the principal loan amount. There are two sorts of interest rates that apply to personal loan offers in the United Arab Emirates:

Flat Interest

The overall loan amount is charged a flat interest rate that remains constant during the loan term. The lowest personal loan interest rate in Dubai, as well as the rest of the Dubai, is 2.63 percent, with rates ranging from 2.63 percent to 22.22 percent.

Reducing Interest

Unlike a flat interest rate, this rate of interest decreases with each instalment paid by the loan borrower. Personal loan reducing interest rate in Dubai is charged only on the outstanding principal amount of the loan, which can fall in the range of range between 5.24% - 39.99%. To acquire the best personal loan interest rate in the Dubai, you should constantly compare personal loans online.

In the Dubai, How do you apply for a Personal Loan?

how to apply for a personal loan in the United Arab Emirates

It has never been easier to apply for the best personal loan in the DUBAI than it is now. The following is a step-by-step approach to obtaining a personal loan in the United Arab Emirates:

Through way of bank branches

Those that want to apply at the bank directly:

  • Simply go to the desired bank's branch.
  • Complete the loan application.
  • To learn more about personal loan interest rates in the Dubai, speak with a customer service representative or a bank representative.

Using the Internet Portal

It is simple and straightforward to apply for a personal loan online. Online platforms offer competitive personal loan rates in the Dubai, and they can be used to swiftly compare personal loan rates in the Dubai, allowing you to choose the best deal. When comparing personal loans, using a personal loan EMI calculator to calculate the EMI amount is suggested, making the online personal loan application process even easier.

Conclusion

Personal loans can be utilized for a variety of purposes. Despite the fact that lenders in Dubai may question about the foundation for your application, most borrowers do not commit to using their personal loan funds for a specific purpose when they apply for one. Personal loans might be quite advantageous to your business.

Your ultimate selection as a business owner is dependent on your needs. Before applying for any of the loans, you should evaluate your company's growth prospects and financial standing. For information and assistance to get Personal Loans at best rates connect to us at Dhanguard.

Getting Personal loan is made simple and hassle-free with Dhanguard Personal finance service in Dubai, UAE. We provide you online Personal loan service with the minimum possible trouble including paperwork & payments.

By Sakshi Srivastava

04-Feb, 2022

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