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How Personal Loan in UAE Can Help you in Financial Emergency?

By PolicyBazaar

Personal Loan up to 8 times your Salary

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The year 2020 will be unforgettable for a lot of reasons but the pandemic and its horrendous effects have given us many life lessons to remember. The sudden outbreak of the world-halting virus has taught us that an emergency can strike us at any time and so can a financial crisis. Millions of people around the world have lost their jobs or had to endure salary cuts for companies to be able to fight off the economic slumps brought about by the pandemic. As a result, it is best to be prepared at all times without waiting to be faced with a situation that puts us under financial stress.

Financial advisors have always advised in favor of having a contingency fund to ward off financial emergencies but not all of us pay heed to these words of wisdom. In such a circumstance, taking a personal loan in UAE or any other part of the world remains our only option as well as a viable solution to our problems. Personal loans are a type of unsecured loan that can be taken to manage many different types of financial emergencies. The idea seems even more lucrative once we take into consideration the fact that one can easily compare personal loan online to pick one that is most suited for our requirements. Let us understand how a personal loan in UAE can troubleshoot the need for an emergency fund:

Why get a personal loan?

As stated above, a personal loan is an unsecured financial product, which means that one has to pledge nothing in order to avail of it. Banks however do take the borrower’s credit history and their credit score before approving their loan application. These factors also influence the amount of loan granted, the loan tenure as well as the interest rate charged. Also, the rate of interest varies from one bank to another hence, it is best to compare personal loan online to get a loan with the lowest interest rate charges.

Most financial institutions or Banks offering a personal loan in UAE also charge extra in the form of a processing fee, or a pre and part-payment charge. However, there are several reasons that make personal loans hugely popular when comes to getting funds in times of need.

Reasons why a personal loan is the best option for emergency fund needs:

No collateral needed

Getting a personal loan in UAE does not require any security or collateral. Being an unsecured loan product, this proves to be a great emergency loan as the borrower has no need to mortgage or pledge their assets in order to avail of the credit. 

Get it quick

Emergencies strike us without notice. Time is of the essence in some situations and that is why personal loans are great for emergency financial needs as their application process is not time-consuming and is absolutely hassle-free. Just compare personal loans online, pick the one you find most suitable, and get approved within a few minutes. Banks even disburse the loan amount within a day or two once your documents are validated and signed. There is no need for any asset- related papers to the bank since this loan is collateral-free, thus reducing the loan approval process even further.

Flexible tenure

The repayment period for a personal loan in UAE is extremely flexible, making it yet another reason for getting emergency funds. One can easily get a personal loan up to AED 1 million for a period of 36 months or above from any reputed lender in the country to manage their financial needs efficiently. Personal loans come with the option of tailoring the repayment schedule according to one’s convenience. Hence, in order to pick the best personal loan one should compare personal loan online to check their interest rate, loan tenure, and additional charges.

Low-interest rate or profit rates

In UAE, the per annum profit rates applicable on personal loans are lower as compared to other countries due to their Sharia laws. These laws govern even the financial operations of the country, together with both lending and banking. It is possible to get an unsecured loan for financial emergencies at a fixed rate of interest marked at 5 percent or even lower in the country.

Even nominal rates in the country are lower than the rest of the world, especially in emerging economies like the Philippines or India where the national currency often depreciates owing to the weak economic stability. The currency in the UAE however is pegged against the US dollar and it is also backed by huge foreign exchange reserves.

Ease of repayment

Another reason why one does not need to hesitate to take out a personal loan in UAE for emergency financial needs is that it is linked to the incoming salary. Due to this one can easily pay off the loan amount through the auto-debit facility. The date of your salary payment can also be linked by the bank to make sure that the repayment is made on time. Some banks even offer a grace period of a week for the ease of repayment of personal loans.

Pre-payment of the loan

Personal loans taken out for emergencies can also be repaid early to free one of the mental stress of being under debt. In many countries banks charge an extra fee if the borrower wishes to repay their loan, making it almost not worth repaying it early. Personal loans in UAE however, allow full repayment without exuberant charges. The laws in the UAE mandate that banks cannot charge over 1 % of the principal or AED 10,000, whichever is less, for pre-payment charges. That means that if a borrower has borrowed AED 50,000 and is looking to pay the last AED 10,000 of the loan early, the UAE bank will not be able to plaster more than an early settlement fee of AED 100 on the borrower.

Debt consolidation

If you need emergency funds to pay off your credit card debts or other loans, a personal loan might be the answer to your problems. As a matter of fact, banks themselves encourage cardholders to take a loan to easily pay off their debts. This way the personal loan will be able to consolidate the debt. Borrowers can then pay off the new loan in affordable and timely installments without marring their credit score or getting any penalties on their credit cards.

We have made a list of the top UAE banks offering a personal loan at affordable rates:

UAE Banks 

Interest Rate

Salary Transfer

FAB Bank

Flat Rate: 4. 99 %

Reducing Rate: 9.29 %

Yes

ADIB

Flat Rate: 4.82 %

Reducing Rate: 8.74 %

Yes

ADCB

Flat Rate: 4.75 %

Reducing Rate: 8.86 %

Yes

Emirates NBD

Flat Rate: 4.86 %

Reducing Rate: 8.99 %

No

Emirates Islamic

Flat Rate:3.99 %

Reducing Rate: 7.34 %

No

Citibank

Flat Rate: 7.71 %

Reducing Rate: 14 %

No

The Bottom Line

Emergencies happen when we least expect them but with an instant personal loan in UAE one does have the option to manage their finances in the event of uncertainties. Even though the applicant’s income and certain eligibility requirements might affect the amount of the loan as well as the loan tenure, the good thing is that UAE is full of great alternatives when it comes to a personal loan. Compare personal loans online to find the top banks in the country to get a loan conveniently and take care of your emergency fund requirements quickly and efficiently.