How to Apply for a Personal Loan in the UAE

A personal loan is the most convenient way for a salaried person to get bank finance to meet their financing need. Getting a personal loan is easy if you have all the required documents with you to meet the eligibility criteria of a designated bank. Apart from having all the records with you, the personal loan request might get rejected due to poor Al-Etihad Credit Bureau Score (AECB) which plays a critical role.

Also Read: How to Save Money as an Expat in the UAE

Most banks reject the loan application if your employment history is less than six months. There are several factors to calculate the eligibility for a loan without the consultation of the bank; these factors include:

• Your Credit Score
• Your Employment History
• Debt Burden Ratio

Acquiring a Personal Loan in the UAE

1. What is Debt Burden Ratio?

DBR is the critical element to determine the eligibility for a personal loan. In simple words, it is Debt to Burden ration, your income versus your liabilities. Your DBR score should not exceed more than 50 as it is made compulsory by the Central Bank Regulation. While calculating DBR scores should include all previous loans, credit card details, auto loan, existing loans or any instalment product you may have.

2. Your Credit Score

Your credit score can be obtained from Al-Etihad Credit Bureau by paying the fee of 100 AED. Credit score determines the risk of getting defaulter and it is based is usually between the ranges of 300-900. For instance, if you have a credit score below 300, then you are more likely to be rejected for a personal loan.

3. Employment History

The applicant should have an employment history of at least six months in the current organisation. In most cases, the application is rejected by the bank if you have an employment history of fewer than six months. But few banks can accept your loan application irrespective of your employment history.

Once you are cleared with all the factors mentioned above, there is a checklist of necessary documents required to process your loan as discussed below:

• Latest salary slip including all allowances, bonuses etc.
• An essential requirement of six months of service history as demanded by most banks.
• The minimum salary requirement by the bank. The minimum limit varies according to the bank.
• A service letter from your employer is mentioning the enrollment date, your salary, designation and end of service benefits from the employer.
• National ID or a passport in case of a foreigner.
• Duly filled application form of the designated bank and it should be complete in all respects.

Acquiring a personal loan can significantly help you with your personal matters, business matters, etc. With this article, you would know if you are eligible for a personal loan in the UAE.