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There are various things related to the personal loan, but here we are specifically going to discuss company listing. For the lender, a personal loan is amongst the riskiest kind of finance. Hence, they have their own set of rules above the guidelines of the UAE Central Bank. In case of these loans, there are two types of companies- Personal Loan with Company Listing and Personal Loan without Company Listing.
As discussed already, this type of finance is a risky loan as you do not offer any security or collateral (except in some cases post-dated cheques maybe). So, lenders have a thing called listed companies. If the company you are employed with currently is listed with the bank, the criterion for availing this loan can be relaxed.
When a lender or bank states that the company you are employed with is listed with them, it would mean that your company is already approved for different banking products such as credit cards, loan, and more.
Most of the banks have a requirement that your employer must be in their business for at least two years in the UAE. It should have a satisfactory revenue level. The banks also go through the company’s financial records and look for stability through these records.
If any bank or financial institution lists your company, you may have the option to enjoy preferred personal loan interest rate, a relaxed criterion, and more. Before your company gets listed, the banks review your company’s profile and ensure that it meets the risk criteria according to the standards of the bank.
It would also mean that the company agrees to present the letter of salary transfer to the concerned bank in the bank’s format.
The non-listed company is that company, which has not been listed with your bank. This might infer that the bank is not really comfortable with the profile of your company. Your bank may still offer you a credit card, personal loan, and more. However, your rate of interest may be higher as opposed the rates offered in case of listed companies.
For instance, in case of a listed company the rate of interest charged by the bank is around 6 percent, and for the non-listed entity, this rate can be around 9- 16 percent when you transfer your salary to the bank. The bank or lender will approve your personal loan without company listing. However, the interest rates would be higher than that offered to listed company.
The company listing is amongst the important criterion, which makes you eligible to obtain finance in the UAE. If your company has not been listed, it may become a little difficult for you to get the loan as you desired.
But don’t worry! Where there is will, there is a way! Gather your will to further go through this post and you will find your way towards your loan.
The system of credit scoring introduced by the al etihad credit bureau helps the banks to minimize the risk exposure during the lending activities. Before this system was introduced, the banks would review the companies, the loan applicant has been working with for understanding their income stability. It was dependent on the observation that those who worked at stable organizations had better credit as well as repayment record.
The banks then made a list including companies that they considered to be stable. They preferred to lend to the employees working with these companies. This then became primary eligibility for availing this loan in the UAE.
Before applying for a personal loan, try to search and find out if the company you are working with is listed with any of the lenders. The Human Resource (HR) Department may help you in finding this information.
If in case your company has not been listed with any of the financial institutions, there is no need to panic. Providing personal finance with companies that are not listed is one of the concerns various financial institutions have been dealing with too.
In such a situation, where you are working with a non-listed company, most of the banks would ask for a proof of earning continuous income for considering your application for the loan. You can also request your company to transfer your income to the concerned bank. This will act in your favor. It is important that you keep in mind that there can be a limit on the loan amount you can avail.
The Bottom Line!
If you are wondering why your personal loan got rejected, company listing is a factor you can shift your focus to. Your company not being listed with the financial institution or bank is one of the biggest reasons why your loan request may get rejected.
With various large as well as small companies and some of the financial institutions, it is not entirely possible that the company at which you are employed is listed with any of the banks or institutions. Obtaining personal finance in this situation may seem to be an uphill task. This article helps you in understanding what to do in such situations.