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How to Compare Personal Loan to Get a Loan at Low-interest Rate?

By Kapil Dwivedi

Personal Loan up to 8 times your Salary

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The United Arab Emirates has a bunch of financial options to offer people living in the country. However, recent years have seen personal loans become one of the most preferred alternatives for short term credit. We all require personal loans to satisfy our wants and desires at some point in time. It could be money required for a dream vacation, or to renovate our homes. With big and internationally renowned banks and financial institutions operating in the UAE alongside many domestic lenders, it might seem confusing to pick a lender one fully trusts and one that offers a personal loan in UAE at low rates of interest so that it is budget- friendly. 

This article will allow you an insight into banks that offer a personal loan in UAE at minimal rates of interest but also come bearing many more benefits. So let’s compare personal loan online, but first:

Personal loan in UAE:

Personal loans in the United Arab Emirates have gotten hugely popular in the past few years as most people prefer to take a personal loan in order to use their credit cards to make large-scale purchases that could include money for a vacation or money for buying business related assets or meeting the expenditure costs of a wedding, of higher education to name a few.

Most banks in the UAE that offer a personal loan charge two types of interest rates- a reducing rate of interest and a flat interest rate.

A reducing interest rate on a personal loan in UAE implies that after every installment of the loan, the amount of the principal reduces. The percentage of the interest however remains unfazed and is charged on the reduced principal amount at the end of each month. As a consequence of this, the borrower has to pay a different installment amount every month for their personal loan in UAE.

Here is how EMI is calculated using this interest rate:

EMI = [Principal Amount * Monthly Reducing Interest Rate * (1 + Monthly Reducing Interest Rate) ^ Loan Tenure in months] / [( 1 + Monthly Reducing Interest Rate) ^ (Loan Tenure in months - 1)]

The flat rate of interest on the other hand is defined as the amount that is calculated using the interest and the sum payable at the beginning of the repayment calendar and this interest rate does not change unless the total loan amount has been fully paid off, unlike the reducing interest rate. To understand this concept a little better let us use an example- If you borrow a personal loan in UAE amounting to AED 12,000 for a period of 12 months. This means you have to pay AED 1,000 each month to pay off the loan if there was no interest rate charged. However, once the flat interest rate of 5 percent is added, the borrower will have to repay AED 1,050 monthly within the period of 12 months. This means that the total interest amount that is payable apart from the principal amount is AED 600.

Here is how EMI is calculated using this interest rate:

EMI = (Principal Amount + Total Payable Interest) / Period of loan in months

Total Payable Interest = Principal Amount * Flat Interest Rate * Period of loan in months / 100

Thus, the interest rate charged is an important feature one must focus on when getting a personal loan in the UAE. Compare personal loan online to find the one that is least burdening to your monthly budget.

Mentioned below are the top UAE banks with the lowest interest rate on personal loan in UAE :

Banks Offering Personal Loan in UAE

Flat Interest Rate

Reducing Interest Rate

ADCB Personal Loan

4.75 %

8.86 %

Emirates NBD Personal Loan Without Salary Transfer

 8.39 %

14.99 %

Dubai Islamic Bank Personal Loan

6.00 %

11.00 % 

RAKBANK Personal Loan

3.99 %

5.99 % 

Finance House Personal Loan

 5.45 %

9.99 %

Deem Finance Personal Loan

  7.72 %  

 14.00 %

Mashreq Bank Personal Loan for Expatriates

 3.43 %

6.49 % 

Noor Bank Personal Loan

 3.33 %

6.29 % 

ADIB Personal Loan

Expats: 4.82 % UAE Nationals: 4.27 %

Expats: 8.74 % UAE Nationals: 7.75 %

FAB Personal Loan

4.99 %

 9.29 

Compare Personal Loan Online to Get a Loan at Low-interest Rate

Visit the official websites of the different banks offering personal loans in the United Arab Emirates to not only educate yourself on the terms and conditions of the loans offered by them but also compare different lenders in order to pick the one that best meets your requirements. Comparing finance providers before availing of a loan is vital for the financial health of the borrowers. All one needs is a little effort and research that will ultimately prove to be extremely beneficial in the long run.

However, it is important to note that personal loan providers offering low-interest loans might not always be the right choice for you as there are more factors to consider. Ensure that you also compare the eligibility criteria of the bank, the finance amount offered by them, the repayment tenure of the loan along with the interest rates.

At the end of the day, each financial institution has its advantages and disadvantages. So, carefully compare personal loan online and do your research from the comfort of your couch before you make your choice.

Factors that help in getting low-interest rates on personal loan in UAE:

1. Keep your credit utilization ratio low

2. Make efforts to maintain a high credit score.

3. Applying for a loan with multiple lenders simultaneously will hamper your chances of getting low-interest rates as this will cause multiple credit inquiries, dampening your credit history

4. Try to get a personal loan in UAE from your existing bank with which you have a savings account. Having an existing relationship with a bank might help in getting low rates of interest

5. Compare personal loan online by comparing EMI and other benefits from different providers by using personal loan EMI calculator and by visiting the bank’s official website.

6. Your professional credentials may help. If your company is listed with the bank, you are a perfect customer for them which might help in getting low interest rates

7. Having a healthy debt repayment record might also play a role in helping you get a personal loan at low rates of interest

8. Having collateral. Even though it is true that personal loans are collateral-free. However, having one helps gain the lender’s trust in being able to recover their money in case you are unable to. Thus, this will help in negotiating a low rate of interest.

9. Banks and financial institutions in the UAE often come up with special offers that involve getting low rates of interest on personal loan in UAE. This seasonal offer might prove to be beneficial for those looking for low- interest personal loans

The Bottom Line

Getting a personal loan might seem overwhelming but by making use of the digitalized era to compare personal loan online one can narrow down their options as well as get the best loan at a low-interest rate. Do your research, while making the most of your privileges like employment status and credit score in order to score the best deal that can finance your dreams.