Personal loans in UAE today are the ideal means of Short-Term Credit. People wishes to take apersonal loan to avail credit cards for large expenditures like travel, purchasing large business assets, shopping, meeting expenses like weddings, etc.In this reference Contact us at Dhanguard to get assistance regarding Personal Loan in UAE.
Banks in the UAE offers personal loans under two types of interest rates known as Flat Rates and Reducing Rates.
A flat rate of interest on a PersonalLoan refers loan when the interest and sum payable is considered at the beginning of the repayment schedule and doesn’t change until the loan has been completely paid off. For instance, X loan of AED 12,000 was taken for a period of 12 months, means payments of AED 1,000 to be given on monthly basis (without interest). In addition to it, add a component of interest at the flat rate of interest at 5%, which equals to AED 1,050 per month (with interest), for 12 months, which adds up to a total amount along with interest of AED600 for 12 months.
Reducing rate of interest on a loan is an interest component that, after each installment, the principal amount reduces by the amount paid as per schedule. The interest percentage (which remains the same in number) is charged on the reduced amount, every month. Thus resulting in different installment amounts each month.
Personal loans offered by banks attracts following features which are listed below
Loan eligibility in the UAE differs from one bank to another bank, but the general eligibility criteria for most banks in the UAE are as follows-
The documentation required to avail personal loans in the UAE can vary from bank to bank. However, following particulars are the general documentation which are usually required:-
The banking sector in UAE is, by and large, protected, although, the presence of foreign banks has gradually been on the rise in the recent past years. There are about 46 banks (including foreign banks) functioning in the UAE. Banks incorporated in Dubai and Abu Dhabi contributes around 90% of the total domestic assets.
In 1985, Islamic banking in the UAE was legalized. According to them, banks cannot charge fixed interest rates on loans as well as deposits. There is an opinion that the central bank of the UAE can only play a limited role in terms of setting interest rates and the monetary policy of the UAE currency is pegged to the US dollar.
There is a view that most UAE banks, by and large, are cautious of becoming dependent on a personal loan market share as most banks do not have robust credit reports, owing to an emigrant workforce. More often it does not have long-term residency status. Emigrants in UAE can, therefore, open a bank account or benefit from any service only after they furnish a guarantee letter from their employers in addition to other guarantees as well.
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.
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