What Banks Are Looking For In The UAE When Approving A Personal Loan?
A personal loan is a popular and effective way to raise funds without having to offer any collateral. When applying for a personal loan, you should aim for lenders that offer low interest rates.
For expats, most banks have a set of eligibility criteria before they can receive a personal loan. This centers on the credit history, the employment history, and the salary the applicant receives.
Here, we will talk about what banks in the UAE look for when approving a personal loan.
Low Debt Burden Ratio
The debt burden ratio measures how much debt an individual already has. Banks often examine how much debt you have before approving you for a personal loan.
In UAE, banks expect you to have a debt burden ratio no lower than 50%. This ratio shows how much your monthly installments exceed your income. If the difference is more than 50%, you are not likely to get approved.
Good Credit History
Your credit history includes your current and past loans as well as how soon or how late you repay them. Banks often look at your credit history before approving you for a loan. If they see that you have too many pending or late repayments, they will likely not approve you for the loan.
Good Credit Score
Your credit score is one of the main things banks look at when deciding whether to approve you for a loan. Lenders often have minimum credit score requirements.
Certain Amount of Employment History
This is one of the most important parts of the approval process for expatriates. Lenders often have minimum employment terms that expats need to meet to get approved.
The employment history requirement is usually 6 months. Expats need to show proof, such as an employment slip. In some cases, if an expat is ‘confirmed’ by an employer, they meet the minimum employment history requirement.
Minimum Age
An expat needs to be at least 21-years-old to qualify for a personal loan. This is also one of the main things banks look at in expatriates.
Minimum Salary
Different banks may have different minimum salaries. However, most banks accept applicants who have a minimum salary of AED 5,000.
Some minimum salaries banks in UAE require are:
- Emirates – AED 5,000
- Dubai Islamic Bank – AED 3,000
- Emirates Islamic Bank – AED 5,000
- RAKBANK – AED 5,000
- ADCB – AED 5,000
You should check and make sure that you meet the minimum salary of the bank in question before applying for a personal loan. But also there are some other banks that allow expats to request finance without a salary transfer even if their employers are not listed in their approval list.
Final Words
Banks in the UAE consider a number of things when approving or refusing someone for a personal loan. In most cases, they look at your credit history, credit score, and debt burden ratio. However, they consider different things for expats.
Expats need to have a certain minimum employment term, they need to be at least 21-years-old, and most of them need to have a minimum salary. Most banks require a minimum salary of AED 5,000 while some banks accept a salary of AED 3,000 and others can approve loans without a salary transfer.
