Personal Loan Deferment in UAE

Personal Loan in UAE
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Most banks and lending institutions offer short-term deferment options to help borrowers in times of financial crisis. The same extends to personal loans, as you can avail of the personal loan deferment service to get a temporary break from regular instalment payments.

Let’s explore more about personal loan deferment in UAE, how it works, whether loan deferment affects your credit Score, and more.

What is Loan Deferment?

Loan deferment is a temporary measure that provides relief to borrowers with respect to their loans for a specific period. Keep in mind that personal loan deferment does not absolve you from repaying the EMIs – it simply extends the repayment schedule. 

For instance, if your lender agrees to defer your personal loan repayment by 3 months, it would simply mean that you won’t have to pay any instalments for those 3 months – the EMIs for this period would be pushed forward. 

The repayment would start from the 4th month and the overall repayment tenure would increase by 3 months. Remember that this does not translate into the EMI being reduced or waived.  

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How to Initiate the Loan Deferment Process?

Banks and lending institutions generally provide the following methods to apply for a loan deferment – 

Mobile banking

  • Open the mobile app of the bank and log into your account
  • Select the loan deferment option 
  • Enter the required details such as those related to your loan, the reason for deferment, and so on
  • Authorise the bank to debit deferment charges (if applicable) before the completion of the process

Phone banking

You can also connect with the concerned bank on their toll-free number and request a personal loan deferment. In this case, you would be required to share the details on the call and follow the prompted steps.

Visit the branch

You can also visit a branch of your bank/lender nearby to apply for a personal loan deferment.

How Does the Personal Loan Deferment Work?

When you defer a loan payment, you agree to delay the payment until a fixed date. It is necessary to be aware of when the loan deferment starts and when it ends, as you will have to make regular repayments outside these dates.

Generally, loan deferments are provided for one month at a time, although these can stretch longer depending on the borrower's financial conditions, the bank’s policies, and more. In some cases, you can request the lender to extend the loan deferment period if you are still in the middle of a financial crisis even after the said period is over.

Keep in mind that most loan providers have a limit on the number of deferments allowed per year.

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Banks Providing Personal Loan Deferment Options in UAE

Some of the well-known banks offering deferment options for a personal loan in UAE are – 

  • ADIB 
  • ADCB
  • FAB
  • Emirates NBD
  • Mashreq Bank
  • Emirates Islamic Bank 
  • Dubai Islamic Bank

How Does Personal Loan Deferment Affect Your Credit Score?

Approved loan deferments are not reported to the al etihad credit bureau (AECB), which calculates credit scores in the UAE, as missed or skipped payments. Thus, a personal loan deferment would negatively impact your credit score only if you fail to obtain approval from the bank, i.e., when you delay or skip instalments.

To Conclude

Personal loan deferment can be quite helpful if you are facing issues with the EMIs for your personal loan in UAE due to any financial difficulties. Depending on the modes available with your lending institution, you can place your deferment request by connecting with the provider via phone, online/mobile banking, or branch visits. 

With personal loan deferments, you can have the required help without getting your credit score reduced. Keep in mind that this applies only if proper approval from the bank has been obtained.

Top UAE Banks Loan Deferment Process
Standard Chartered Loan Deferment ADCB Loan Deferment
Dubai Islamic Bank Loan Deferment RAKBANK Loan Deferment
HSBC Loan Deferment Mashreq Bank Loan Deferment
FAB Loan Deferment Emirates Islamic Loan Deferment

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