If moving to Dubai has put a financial burden on you, a personal loan can provide immediate relief and enable you to settle in with less stress. Personal loans are flexible and can be used for multiple purposes. Many expats use personal loans to pay their children’s school fees or annual rent, but it can also be used for other purposes like home renovations or weddings.
According to the Central Bank of UAE’s recent Credit Sentiment Survey, there was an increase in demand for personal loans in Dubai this quarter. However, many people find it challenging to understand the process. ServiceMarket and HSBC have prepared this guide to make it easy for you before you get a personal loan.
Select the right personal loan and apply:
Banks have varying maximum loan amounts, interest rates, minimum salary requirements, early settlement fees and other requirements. Compare their personal loan features and pick the one that best suits you. The approval of your personal loan application depends on the following factors, so consider each point before filling in the application.
- Minimum salary: Each bank sets its own minimum salary requirement, which means that people with higher salaries would reach out to more opportunities offered by banks. There are loans available to people who have salaries as low as AED 3,000, however, keep in mind that by Central Bank of UAE Regulations, repayment amounts of your total debt (credit cards, auto loans etc) can not exceed half of your monthly salary.
- Salary transfer to same bank: Many banks in Dubai make it mandatory for personal loan applicants to have an account with the bank. Even the banks that don’t have this as a requirement may offer better rates to people with salary transfer accounts because they may be seen as lower risk customers.
- Listed employer: Most banks will turn down your loan application if your employer isn’t on their approved list.
- Salaried vs. self-employed: Compared to self-employed individuals, it is easier for salaried individuals to get a personal loan. You will see more personal loan options as a salaried expat.
- Period of employment: The longer you work with an employer, the better your chances of getting a personal loan. Banks prefer customers who can prove that they are in stable and permanent jobs.
- Debt burden and credit history: You are less likely to get a personal loan if you already have a lot of debt. The Central Bank of UAE has made it mandatory that your monthly loan repayment installment should be less than 50 percent of your salary. Also, if you have missed repayments on another loan or credit card, or have been previously blacklisted, then you will not be able to take out a personal loan.
- Necessary documents: In order to apply for a personal loan you will need your passport, residency visa, salary certificate, and Emirates ID.
HSBC personal loan calculator
HSBC is offering personal loans as high as AED 600,000 to expats. You should have a minimum salary of AED 7,500 to apply for a personal loan. To make it convenient for you, HSBC allows you to apply online from the comfort of your home. Find out how much you can borrow by using the HSBC’s personal loan calculator.
A new school term – another cheque? Rent due upfront but don’t want to use your savings? An HSBC loan could help. Terms and Conditions apply.
