Trapped Into Debt in the UAE: To Repay or to Run Away?
If you have opted for a home loan or personal loan in UAE and you lost your job then what would you prefer: to repay or to run away?
Well, few people might prefer to pack their bags and run away to their home country or to some other countries, where the cost of living is comparatively lower and they might think that UAE debt collectors can’t run after them.
However, few people might choose next level solutions such as the latest news of an expat who was from India, frightened that he would commit suicide after having a financial burden of loan in Dubai and having lost his job too. Then, the Dubai Police took an action immediately after knowing the whole scenario and the entire plan was averted.
Without any doubt, running away is very risky and even if borrowers run away, they will only find that their loan balance has only increased while they were gone due to high compound interest, collection charges, and late payment fees. In addition to this, their credit score will take a hit which will make it difficult for them to borrow a personal loan or any other type of loan in the future.
Even the worst thing is that there will get endless calls and messages from the debt collection agencies who have subsidiaries or offices throughout the world. So, it is not at all advisable to flee from your debt.
Useful Advice to Get Rid of Debt Trap
Some of the leading financial experts have given the following advice for all those people who have opted for a loan at the high personal loan interest rate or some other loan and lost their job too.
- First of all, you need to check your loan agreement for insurance. If the reason for termination of employment is involuntary, then there are high chances that insurance will cover the minimum monthly payments for a few months (based on your insurance policy) or until and unless you get a new job in your hand, whichever comes first.
There are a few people who believe that since they are repaying for their loans, they will not need to pay the bank after losing their job. This is where they are wrong. Since the insurance will only pay the minimum due amount for a specific period of time and if the reason for termination is not involuntary on the debtor’s part so resignation will not be considered covered.
All those debtors who are terminated because of a company redundancy or closure must notify their bank/insurance provider in order to process the claim further. It is not an automatic process so the insurance company or bank wouldn’t know that you have lost your job on their own. That is why it is important to inform them.
- Shifting back to your home country or relocating to another country doesn’t mean you are fleeing away from your obligation. Well, you can still make payments by arranging with your banks even if you are no longer in the United Arab Emirates. In fact, it is easier to negotiate with the bank sometimes if you have a better paying intention. The important thing here is to keep the bank informed of your current situations and just show them a good intention to make the repayment of personal loans in UAE.
- Losing your job due to any reason does not mean you cannot get another job. Well, yes. You can find another job. And even, if you are not getting hike on your new job then grab that job with a lesser salary and pay off the loan that you have availed on high personal loan interest rate so that you can get out of debt.
- If you have opted for a car loan, you can sell your car & downgrade. Many people assume that upon selling the car, their car loan will be canceled. But this is the wrong assumption. If the car’s value is lesser than what you owe the bank, you will be responsible to pay back the remaining balance.
In a Nutshell
Henceforth, we can conclude that running away from your debt is not an ideal solution at all. Of course, there are some feasible and smart ways to pay off your debts or personal loan in UAE even if you thought that there is no hope left. Paying off your debts will not only make you a responsible borrower but also make you eligible for other loans in the future in times of any financial emergency.