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How to Get a Personal Loan Without Bank Statement in the UAE

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A personal loan can be your one-stop financing solution and offer you instant financial support for your requirements with minimal documentation and eligibility criteria. However, one of the essential requirements while submitting an application for a personal loan is the bank statements for the last 3 or 6 months. This is because bank statements give an overview of the account holder's finances which includes cash flow movements to and from the account, information on salary credits, and so forth.

With that said, you can still avail of a personal loan without a bank statement in the UAE. This article discusses the bank statement's role in procuring a personal loan and how you can obtain a loan without providing a bank statement.

What are Bank Statements and What Do They Contain?

Bank statements are generated by banks every month to give a brief insight into the account holder's overall financials. These statements contain a list of transaction details like deposits, withdrawals, and deductions, along with the account holder's personal information like their full name and account number. Moreover, they also depict the opening balance and closing balance of the concerned account each month. 

Account holders can easily access their bank statements by visiting the bank's official website or logging into their banking portal.

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Why is a Bank Statement Required to Obtain a Personal Loan in the UAE?

Bank statements are required by lending institutions or creditors to assess the creditworthiness of individuals. While granting a personal loan, here’s what the lenders look for in your bank statement - 

Financial Status of Applicant

Bank statements are similar to personal profit and loss statements. They keep track of the account holder's finances and help lenders comprehend how the person is spending on different categories. Bank statements also inform the lender about the monthly salary amount credited to the account holder's account.

Other Liabilities

Before granting a personal loan, financial institutions require all the details regarding the applicant’s existing loans being serviced. Bank statements verify the information related to loans and contain details about how long these payments would be made. This is of key importance, as existing loans reduce your repayment capacity, which can impact the risk for the new bank. 

With all the details in hand, the bank can efficiently compute the debt-to-income ratio to assess the individual's ability to repay monthly payments.

Evaluate Average Monthly Balance

Financial institutions also use the bank statement to evaluate the average monthly balance maintained by the potential borrower. Generally, the higher the average monthly balance, the higher the chances of the borrower qualifying for the personal loan.

Level and Nature of Activity

As mentioned earlier, bank statements help banks verify the applicant’s salary in the case of salaried individuals. However, bank statements are beneficial even if the applicant is a self-employed individual. In this case, lenders can utilise the statements to ascertain the level of business activity by receipts or sales with the one declared in the personal loan application form.

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How to Get a Personal Loan in the UAE Without Bank Statement?

You may get a personal loan without a bank statement if you can back your finances and financial profile with the help of the tips mentioned below - 

1. High AECB Score

The AECB credit score score is a three-digit number that reflects your financial conditions and the ability to repay the debt. The higher the credit score, the better the chances of your personal loan application getting approved. Apart from the AECB score, the lending institutions also analyse the credit report to look into the credit accounts, repayment history, and pending instalments of the applicant.

Several lending institutions in the UAE can accept your loan application if your credit score is above 580. However, if you are applying for a personal loan without a bank statement, you should strive to maintain a credit score of at least 750.

2. Low Debt-to-Income Ratio

Your debt-to-income ratio indicates how much you owe each month compared to what you earn. If you apply for a personal loan without a bank statement, you must maintain a low debt-to-income ratio. Having a low debt-to-income ratio can assure lenders about the borrower's ability to make timely monthly payments.

While the maximum permissible debt-to-income ratio in the UAE is 50%, you should ideally aim to keep it below 30% if you wish to apply for a personal loan without a bank statement. 

3. Establish a Good Relationship with Bank

If you are applying for the loan in the same bank in which you have your bank account, it becomes easier for the institution to consider you eligible for the personal loan without requiring your bank statements. 

However, even in the mentioned scenario, you should build a substantial repayment history consisting of regular credit cards and any other current monthly instalments. This helps in maintaining a good relationship with the bank, which can allow you to negotiate lower interest rates and even apply for a personal loan without a bank statement.

Applying for a personal loan without a bank statement with an institution with which you have a long-standing relationship is an excellent choice. It not only eases the loan application process but also helps you get the loan on favourable terms. 

4. Submit a Collateral

Although personal loans are unsecured lines of credit, you can offer the submission of collateral to get a personal loan without a bank statement. This helps lower the lending institution's risk quotient and boosts the chances of obtaining a personal loan. Submission of collateral protects the financial stake of the lender if the borrower fails to repay the loan on time and in full.

5. Assign a Guarantor

The presence of a guarantor can act as an assurance of the borrower's credibility for the lending institution. The guarantor takes the guarantee on behalf of the borrower to repay the loan. So if a borrower is unable to repay the loan for any reason, the guarantor would be legally bound to repay the loan with interest.

Individuals who wish to avail of a personal loan without a bank statement can take the help of a guarantor, provided the guarantor has a good AECB score. 

6. Secondary Source of Income

Borrowers should also submit details regarding their alternate sources of income to the lender to prove their ability to pay back the loan conveniently. The secondary sources of income can include rental receipts, salary slips of the spouse, and so forth. 

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Bottom Line

With a personal loan in UAE, you can quickly obtain funds for personal needs, be it business expansion, marriage, a child's higher education, and more. However, submitting the required documents to obtain a personal loan is essential, with one such important document being a bank statement. Most financial institutions in the UAE require the applicant’s bank statements for the last 3 to 6 months to ensure that they are creditworthy and can repay the loan on time.

You can also apply for personal loans without bank statements, provided you have shown your credibility to lenders. This can be done by having a solid financial profile, which can be developed by keeping a high credit score, a low debt-to-income ratio, a good relationship with the lender, submitting alternative sources of income, assigning a guarantor, or submitting collateral at the time of loan application. 

With all said, it should be kept in mind that some lending institutions in UAE process only requests for a personal loan with the bank statement. Thus, it is advisable to approach the concerned bank or lending institution and clarify your queries before submitting your application.

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