Personal Loan in UAE for Expats

Overview

Less than 15% of the total UAE population comprises of Emiratis. Numerous banks and financial institutions offer personal loans for Emiratis. Since they are locals, they enjoy the lowest interest rates for personal loans in the UAE and many other benefits.

Having said that, in a nation that is home to people from various cultures and ethnicities, offering personal loans only the Emiratis doesn’t fulfill the financial needs of the various people of the UAE. This is why banks and financial institutions offer personal loan under various categories such as personal loans in the UAE for expats, personal loans for Emiratis etc.

Features & Benefits of Personal Loans in UAE for Expats

Here are the features and benefits of personal loans in the UAE for expats:

Principal Amount

Simply put, the principal amount is the money an applicant qualifies for when they apply for a personal loan in the UAE. The principal amount is not inclusive of interest.
Usually, a lower total loan amount can be availed for personal loans in the UAE for expats.

Interest Rates

For offering a personal loan, a bank charges interest in return. As such, the loan applicant should aim to find the lowest interest rates for a personal loan in the UAE. It is very rare to see any difference between interest rates of personal loans in the UAE for expats and Emiratis. There are two forms of personal loan interest rates in the UAE:

• Flat Interest: Flat personal loan interest rates remain constant through the tenor of a loan.
• Reducing Interest: Reducing personal loan interest rates in the UAE lessen as the principal amount gets smaller, i.e. as the loan holder makes payments.

Personal loans in the UAE for expats are offered at competitive rates.

Tenor

The tenor of a personal loan is the time period the loan has been availed for. The tenor directly affects the EMI of a personal loan. Personal loans in the UAE for expats usually have shorter tenors.

EMI

Also referred to as the Equated Monthly Instalment, EMI is the amount of money a borrower is required to pay back every month to the lender. EMI is inclusive of both principal and interest. The applicant can calculate their monthly EMI by using a personal loan EMI calculator. Personal loan calculators can usually be found on the bank’s website.

Benefits

In addition to the disbursed amount, certain banks also offer other benefits such as complimentary insurance, free-of-charge credit and debit cards and much more with personal loans in the UAE for expats.

Personal Loan in UAE Eligibility & Required Documents for Expats

Best personal loan in the UAE is the one with low personal loan interest rates, high loan amounts, and long tenors. However, in order to enjoy the lowest interest rates for a personal loan in the UAE, the applicant ought to qualify for it. Mentioned below is the eligibility & required documents for personal loans in the UAE for expats.

Age Eligibility

Most banks follow a standard criterion for personal loan eligibility in the UAE that requires applicants to fall within a minimum and maximum age group. These personal loan criteria vary from bank to bank but usually is between 21 years to 60 years.

Minimum Income

Before accepting an application for any personal loan in the UAE, the bank’s credit staff conducts a risk analysis of the applicant’s profile. This analysis is usually based on past payment history and minimum monthly income. The minimum salary for personal loans in the UAE is set by the bank itself.

Credit History

The applicant’s credit history is a major criterion for personal loan eligibility in the UAE. A credit report (usually obtained from the Etihad Credit Bureau) shows the applicant’s past payment history and all of their currently active loans (if any). A good credit score means the applicant can repay the loan.

Residency

While nearly every bank offers personal loans in the UAE for expats, it is impossible to find one that offers personal loans to non-residents. Expats will be required to show proof of their residency by submitting their passport with a valid UAE visa.

Once the applicant has fulfilled all the requirements for personal loan eligibility in the UAE, the next step would be is to gather the required documents. The documents commonly required to complete an application for a personal loan in the UAE for expats are as follows:

1. Application Form - Most banks offer personal loan application forms online.
2. UAE Residency Proof - This can be provided in the form of a passport and visa copy.
3. Employment & Income Proof - This can be shown by presenting a salary slip or a bank statement. Certain banks also require the applicant to have a specified experience in their job to qualify for a personal loan in the UAE for expats. In that case, the applicant will also have to submit the joining letter or letter of experience from their company.
4. Bank Statement - Depending on the bank, the applicant may have to submit bank statements ranging between the latest 3 months - 1 year or more.
5. Salary Transfer - While it isn’t impossible to find a personal loan in UAE without a salary transfer, the benefit of maintaining salary with the loan issuer is enormous. The salary transfer feature allows the applicant to avail of personal loans in the UAE for expats having larger loan amounts and smaller minimum monthly income requirements.

Some banks even allow new expats to apply for a personal loan in the UAE without a salary transfer and bank statement for smaller loan amounts.

Personal Loan in UAE Interest Rates for Expats

In exchange for offering personal loans in the UAE for expats, banks charge an interest amount on the disbursed amount. Personal loan interest rates in UAE are charged in one of two forms - either as a flat interest or as a reducing interest.

Reducing interest is usually the lowest interest rate for a personal loan in the UAE. A reducing personal loan interest rate is calculated on the outstanding principal amount and hence, reduces every time the borrower repays a portion of the loan.

A flat interest rate on personal loans in the UAE remains the same regardless of how much of the borrowed principal is remaining. Flat interest rate ends up costing the borrower more as it is charged on the full principal amount. Flat interest rates can be converted (approximately) into reducing rates by multiplying the figure by 1.8.

Personal Loan FAQs

Q1. Can I still apply for a personal loan if my company isn’t listed on the bank’s approved company list?

Ans- Most banks do not offer personal loans in the UAE for expats without an approved employer. However, some banks may make an exception and offer personal loans for non-listed companies in the UAE on the basis of the applicant’s income and reputation of the employer.

Q2. What is a top-up loan?

Ans- Top-up personal loans are a type of loan offered to the borrower after they have paid a certain number of payments of the total tenor. Top-up personal loans in the UAE extend the tenor of an existing loan, increase the borrowed amount and may even offer lower personal loan interest rates. They are only offered to borrowers that make payments on-time.

Q.3. What is a credit score?

Ans- A credit score is a value that is calculated on the basis of the applicant’s past payments, currently active loans (if any) and any form of credit they may have availed of within the last decade or more. A credit score helps personal loan issuers determine the risk profile of an applicant. A higher credit score gives an applicant a better chance of qualifying for personal loans in the UAE for expats.

Q4. Do personal loans offer any other benefits?

Ans- Certain personal loans in the UAE for expats offer added incentives such as free credit cards, debit cards, life insurance and more. These personal loan offers in the UAE vary depending on the respective loan issuer.

Q5. How can I find the best personal loans in the UAE?

Ans- The best personal loans in the UAE are a matter of perspective. Some applicants may consider the lowest interest rates for personal loans in the UAE to be an indicator of the best loan, while others may look for personal loan offers in the UAE. The best way to identify such a loan is to conduct your own personal loan comparisons and use a personal loan calculator to accurately determine the monthly EMI.