How to Apply for a Personal Loan from Private Finance in UAE?

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  | Published: 11 August 2021

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Banks and other financial institutions offer a wide range of options to help residents get a personal loan from private financing in the UAE. The applicants need to meet specific terms and conditions for the same. The private lenders in the UAE offer various types of loans, including car loans, personal loans, home loans and many more.

A personal loan is one of the most commonly provided financial services in the UAE. It can be paid back in monthly instalments based on the financial needs of the applicants. The lenders consider a few factors before providing a personal loan through private financing in the UAE. These factors include the borrower’s monthly income, credit score, outstanding loans, etc.

Keep reading to find out the basic requirements of getting a personal loan from private finance in the UAE, followed by a simple application process.

Personal Loan from Private Financing in the UAE

Most banks and other lenders in the UAE require the possession of a bank account to offer financial support services like credit cards, loans, etc. So having an active bank account is one of the basic requirements to meet when applying for a personal loan from private finance in the UAE.

Opening a Bank Account

The applicants must have a current bank account that provides chequebooks to pay easy loan instalments. They can refer to their own individual or joint account. The banks in the UAE have a minimum salary requirement for opening a bank account. The requirement may vary for different banks in addition to the listed documents.

  • Emirates ID card
  • A valid passport – for citizens
  • A copy of passport with a valid residence visa – for expatriates
  • Salary Certificate/Salary Transfer Letter – for salaried employees
  • Trade License – for self-employed individuals

General Terms and Conditions

Let us now go ahead and know about the general terms and conditions that the applicants need to keep in mind when applying for a personal loan from private finance in the UAE.

  1. Minimum Salary Requirement: The private lenders in the UAE have set up some minimum salary requirements for the applicants that may vary for different banks. The applicants must choose the bank with a minimum salary requirement less than their monthly paycheck.
  2. Amount of Personal Loan: Based on the Central Bank of the UAE Regulations Act, the applicants must apply for a maximum personal loan amount not exceeding 20 times their income or salary. However, they can always request an increase in their loan amount after paying certain instalments. These requests are subject to approval from the bank.
    In case the borrowers do not get approval for increasing the loan amount, they can contact other lenders to buy out the loan. The existing lender may charge early settlement fees if the loan repayment process is still at the early stages. The buy out can also help borrowers consolidate their financial liabilities, including loans, credit cards, debts and overdrafts.
  3. Fees and Other Charges: As per the UAE Central Bank Regulation, the banks can introduce amendments to personal loan fees and other charges from time to time.
    The private lenders in the UAE apply three types of financing fees.
  • Processing Fees: This type of fee is charged at the time of loan disbursement and gets deducted from the total loan amount. The percentage of fees may differ from one bank to another.
  • Early Settlement Fee: This type of fee applies when the borrower seeks for early loan settlement. The banks in the UAE calculate an early settlement fee based on the number of years to be paid versus the number of years paid.
  • Flat and Reducing Interest Rates: The private lenders in the UAE offer two types of interest rates on personal loans – flat and reducing. In the case of flat interest rates, the interest amount remains the same for the entire tenure. On the other hand, in reducing interest rates, the interest rate reduces with every instalment the borrower pays.
  1. Immediate Loan Repayment: There are certain conditions when banks may ask for immediate loan repayment from the borrowers.

    Here is a list of such conditions:
  • Invalid customer data
  • Work termination due to expiry of the contract or any other reason
  • Non-payment of six non-consecutive or three successive instalments
  • Salary transfer to another bank without the concerned bank’s approval
  • Death of the borrower
  • Violation of terms and conditions in the loan contract
  • Leaving the country permanently
  1. Registered Employer: Most of these lenders and private banks want the applicant’s employer to be registered. The loan approval also depends upon the market reputation of the employer. It can be difficult for an applicant to get a loan if they do not work for a listed employer.

How to Apply for a Personal Loan from Private Finance in the UAE?

Here are some easy ways to apply for a personal loan from private finance in the UAE.

  • Visit Online Portals: It is quick and convenient to apply for a personal loan online. The applicants can simply visit the personal loans section on our website and compare their preferred personal loan options. They can then select the loan after finding the perfect interest rates on the required loan amount. They can also use our personal loan EMI calculator to evaluate the monthly instalment amount.
     
  • Call the Helpline: The applicants can simply call our helpdesk and speak to our expert team regarding their loan requirements. Our experienced professionals will explain all the available personal loan options and help find the suitable one.
     
  • Visit the Branch: Applying for a personal loan from private finance in the UAE can be easily done online. However, the applications also have an option to visit their chosen bank’s branch and apply for a personal loan. They can get in touch with the bank representative at the branch to explore the available personal loan options.

The Bottom Line

Obtaining a personal loan from private finance in the UAE could be a tedious task for some applicants. We, here at PolicyBazaar, with our financial experts, make the entire process as easy as pie for you. We help you shop around and explore different personal loan options offered by the best private lenders and help you pick the one that meets all your financial requirements.