7 Important Things to be Taken Care While Applying for Personal Loan for UAE Nationals
A personal loan is an unsecured loan which can be availed very easily in times of financial emergency. It has a great potential to get rid out of immediate monetary requirements.
You know, why?
Because it gets quickly processed and most of the lenders disbursed the amount into your bank account within a very small period of time, thus helping you to meet your financial needs.
However, it is vital to have all appropriate information before applying for a personal loan for UAE Nationals. Not only it improves the chances of your loan application being approved but also you can avail a competitive and attractive personal loan interest rate.
So, here are some important things that you must keep in mind before opting for a personal loan for UAE Nationals.
Consider Your Credit Score
Before applying for a personal loan for UAE Nationals, make sure you check your credit score. It is the primary thing that banks and financial institutions take into consideration before sanctioning a personal loan. Since a personal loan is an unsecured loan and it is not backed by any guarantor, the credit criteria may be even more stringent. Your credit score depicts your creditworthiness and helps lenders to decide how risky you are for them. The applicant with good credit scores is likely to avail personal loans easily at an attractive rate of interest.
Compare the Personal Loan Interest Rate
Interest rate plays an important role when opting for a personal loan as it impacts your EMIs and sometimes even the length of your loan repayment period. There is a wide range of banks and financial institutions that claim to offer a personal loan for UAE nationals at an attractive rate of interest. So, it is very important to compare the rate of interest offered by various lenders to avail a personal loan at a low rate of interest.
Assess All Costs
Do you know that the personal loan interest rate is not the only cost you have to bear, but there are numerous costs that are associated with personal finance? So, it is equally important to consider the following costs:
- Processing Fee: Lenders generally charge a maximum of 1-2 percent of the loan amount as a processing fee. A few lenders may charge a flat processing fee. Well, these charges added to your personal loan. The lower the processing fee, the better it will be for you.
- Late Payment Fee: Banks & financial institutions charge a late payment fee if in case you miss paying your loan EMI payment on time. Thus, it is important to evaluate the EMI amount in advance and plan the finances and tenor for the loan as per your repayment ability.
- Prepayment Fee: Sometimes, you opt for a personal finance to tackle your short term cash crunch. In such circumstances, prepayment of personal loan is a possibility when you get rid of the cash crunch. By prepaying the loan amount, you can obviously save on the cost of interest. So, if you also fall into the same category and taking a personal loan to tackle your short term cash crunch then you should consider prepayment fee while assessing all costs. Lenders levy a prepayment fee as paying off the loan amount before the stipulated loan tenure might cause a lender to incur a loss. However, the prepayment fees vary from bank to bank.
Before applying for a personal loan for UAE nationals, make sure you consider all of the fees & charges associated with a personal loan in order to get an accurate estimate of the expenditure. This will help you to manage your finances easily and help you decide whether the loan is suitable and affordable for you.
Decide the Loan Amount Smartly
We will never recommend you to borrow a loan amount more than you need. Just analyze the purpose for which you need to take a loan and then evaluate how much you are going to utilize. Lenders might be ready to give you a higher loan amount if it considers you to be a responsible borrower and more creditworthy. However, it’s not a good idea to go overboard with the loan amount.
You know, why?
A higher loan amount simply means higher debt as well as a higher interest pay out. So, it is advised that borrow a loan amount only up to what you actually need to make the most of your personal loan.
Check Your Eligibility
Before applying for a personal loan for UAE Nationals, check with the bank or financial institutions to find out whether you are eligible to apply for it or not, specifically in terms of your employment and income. Income and employment status are the important criteria that lender check when sanctioning a personal loan since they show whether the applicant is financially stable to repay the loan amount on time or not.
Determine Your Loan Repayment Ability
Before you borrow a personal loan, make sure you prepare yourself for its repayment. And the best way to analyze your loan repayment ability is to ensure that your monthly income is enough to repay the loan amount. However, you might have other debt repayment and financial obligations so consider them also before availing personal finance in order to avoid financial burden later.
Read the Fine Print
Whichever lender you choose to opt for a personal loan for UAE Nationals, you should always read the fine print carefully to understand the various terms and conditions of a personal loan before sealing a deal. There are numerous things to consider like loan tenor, processing fee, loan cancellation, foreclosure fees, and a lot more. All of these things, if not considered in the beginning, might cost you a fortune. So, make sure you do not easily rely on the bank’s executives for all the details instead read the terms & conditions carefully to make a smart decision.
A personal loan is indeed an ideal option for meeting various financial needs and tackling emergency situations. But make sure you keep all the above-mentioned points in your mind before applying for a personal loan for UAE Nationals. Any sort of problem in the future will not only increase your financial burden but also hurt your credit score significantly. This will ultimately make it tough for you to avail a personal loan or any other type of loans in the future.