Personal loans today are the preferred means of short term credit in the UAE. People prefer taking personal loans to using their credit cards for large expenditures like travel, purchasing large business assets, meeting expenses like weddings, college tuition, etc.
Banks that offer personal loans in the UAE do so on the basis of two types of interest rates – flat rates and reducing rates.
Flat rate of interest on a loan refers to when the interest and sum payable is calculated at the start of the repayment schedule, and does not change till the loan has been paid off. For example, A loan of AED 12,000 taken for a period of 12 months, means payments of AED 1,000 every month (without interest). Add to this the flat rate of interest at 5%, which equals AED 1,050 per month (with interest), for 12 months, which adds up to a total interest payment of AED600.
Reducing rate of interest on a loan takes into consideration the fact that, after each instalment, the principal amount reduces. The interest percentage (which remains the same) is charged on the reduced amount, every month. Thus resulting in different instalment amounts each month.
Popular Personal Loan Interest Rates in UAE
Below is a comparison of the rates of interest* offered by some banks in UAE
|Bank||Name of Personal Loan||Interest Rates||Tenure||Maximum Loan Amount|
|ADIB Personal Loan Non Salary Transfer||16% to 18%||Up to 4 years||Over AED 200,000|
|ADIB Debt settlement||6.75% to 9.99%||Up to 4 years||Over AED 200,000|
|ADIB Salary transfer||7.25% to 18%||Up to 4 years||Over AED 200,000|
|ADCB Personal Loan for UAE Expats||4.99% to 13.99%||Up to 4 years||AED 3 million|
|ADCB Personal Loan for UAE Nationals||4.99% to 13.99%||Up to 4 years||AED 3 million|
|Emirates NBD salary transfer loans||2.63% to 4.99%||Up to 4 years||Up to AED 500,000|
|Emirates NBD Personal loans for self-employed individuals||2.63% to 4.99%||Up to 4 years||Up to AED 500,000|
|Emirates NBD Personal loans for self-employed professionals||2.63% to 4.99%||Up to 4 years||Up to AED 500,000|
|FGB Personal Installment Loan||24%||Not mentioned||Up to AED 200,000|
|FGB Salary Transfer loan||24%||Not mentioned||Up to AED 200,000|
|Citibank Salary Transfer Personal Loan||4.99% to 14.99%||6 months to 48 months||Up to AED 250,000|
|NBAD Personal Loan||Starting at 4.74%||Upto UAE Armed Forces Personnel: 60 months UAE nationals and Expats: 48 months||UAE Nationals: AED 5 million Expats: AED 2.5 million|
|Mashreq Bank Personal Loan||6.25%||Up to 48 months||Up to AED 1 million|
|NBF Personal Loan||Starting from 6.25%||Up to 48 months||Upto 20 times the applicant’s salary|
|CBD Personal Loan||4.50%||Up to 48 months||UAE Nationals: Upto AED 2.5 million Expats: Upto AED 1.5 million|
|Noor Bank Personal Loan||Reducing rate: 4.56% Flat rate: 2.75%||Up to 48 months||Up to AED 1 million|
|CBI UAE Personal Loan||5.25%||Up to 48 months||Upto AED 500,000|
|Finance House Personal Loan||16 to 24%||Up to 48 months||Upto AED 250,000|
|United Arab Bank Personal Loan||Starting at 5.49%||Upto 4 years||Up to AED 2.5 million|
*Rates are subject to change
The aforementioned parameters help you make an assessment of the personal loan market in the UAE including the several benefits offered by most banks. Take an informed decision based on your personal financial requirements and not compromise on the little joys of life.
Top UAE Banks with Personal Loan Products
Abu Dhabi Commercial Bank (ADCB)
The Abu Dhabi Commercial Bank offers made-to-measure personal loan packages for UAE Nationals as well as expatriates residing in the UAE. The personal loan offers come with low interest rates, higher salary multiples and flexible eligibility criteria.
Some of the other features and benefits that of ADCB personal loans are
- Free credit life insurance
- Longest repayment period
- Consolidation of loans available
- Simple documentation
- Free ADCB credit card
- Up to 3 times salary overdraft for UAE nationals and 2 times for expatriates.
Abu Dhabi Islamic Bank (ADIB)
The Abu Dhabi Islamic Bank offers instant approval and provides personal loans of up to one million Dirhams at a highly competitive profit rate. ADIB personal loans can be used to settle conventional finance and credit cards as well and offer repayment periods of up to 48 months.
Some of the other features and benefits of ADIB personal loans are:
- Freedom of trading with the shares at your will (after purchasing them from ADIB)
- 1% Processing Fees (Min AED 500 and Max AED 2,500)
- No installment for the first three months
- Free postponement option
- Free ADIB VISA Cashback Card
Dubai Islamic Bank (DIB)
The Dubai Islamic Bank offers personal loans at an excellent profit rate of 8.82% and a high finance amount, and is considered one of the best in the UAE at present. DIB offers upfront cash payment to the customer with no early settlement fees and a maximum loan repayment period of 48 months.
Some of the other features and benefits of DIB personal loans are:
- Fixed arrangement fee ranging between AED600 and AED800
- Maximum finance amount of 2 million Dirhams for UAE nationals and 1 million Dirhams for expatriates.
The Emirates NBD provides people with personal cash loans at competitive interest rates, low monthly payments and long repayment periods of 1 - 4 years. One of the main features of this loan is that it offers financial assistance to even those who are employed by companies that are not on the Emirates NBD approved list.
Some of the other features and benefits of Emirates NBD personal loans are:
- Minimum loan amount up to AED 500,000
- Loan repayment period of 1- 4 years.
- Effective rate of 5.38% per annum.
Emirates Islamic Bank
Emirates Islamic Bank offers personal loans based on a Murabaha arrangement through trading of Shari’a compliant instruments like shares or Wakala certificates. Their personal loans come at very competitive profit rates and are available to both salaried and self employed customers.
Some of the other features and benefits of Emirates Islamic Bank personal loans are:
- Financing up to 3 million for UAE Nationals and 1 million for Expatriates.
- Approvals in 24 hours
- Preapproved credit card and 100% discount on first year's annual fees
- Nominal processing fees
- Exclusive policy terms on buyout loans/finances
- Certificate of Takaful / Insurance Cover
National Bank of Abu Dhabi (NBAD)
The National Bank of Abu Dhabi offers personal loans at very low interest rates of 4.49% per annum and provides loan amounts of up to 5 million Dirhams for UAE nationals and 2 million Dirhams for expatriates.
Some of the other features and benefits of NBAD personal loans are:
- 25% discount on processing fee for Elite Gold customers
- First repayment after 90 days for buyout loans
- Option to switch to fixed rate at any time with no additional cost involved.
RAKBANK is the trading name of the National Bank of Ras Al-Khaimah PJSC. It offers high personal loan amounts at low interest rates with flexible repayment periods of up to 48 months for both UAE nationals as well as expatriates and 60 months for staff of the Armed Forces.
Some of the other features and benefits of RAKBANK personal loans are:
- Quick approvals
- Top up loan after 1 year
- Hassle-free takeover from other banks
- Free Debit Card and personalized cheque book
- Free Credit Card with no annual fee and low interest rates
Mashreq Bank offers personal loans of up to 1 million Dirhams with a 24 hour loan disbursal. A major feature of their personal loan is the cash back the customer will receive at the time of disbursal, which amounts to an extra 1% of the loan amount. Mashreq Bank also offers a loan repayment period of up to 4 years with an easy and straight-forward documentation and application process, with an option for Islamic Finance as well.
Features of personal loan in the UAE
The following are the features of personal loans offered in the UAE:
- The loan amount offered range from AED200,000 to AED5 million for UAE Nationals.
- The loan amounts are based on the monthly salary and the length of the employment of the applicant.
- Most banks offer attractive reducing interest rates. The interest rates start from 4.99% or 2.63% flat per annum. This again depends on the applicant’s income and loan amount that they are choosing. The type of calculation chosen also affects the interest rate.
- The minimum salary required to avail a personal loan in the UAE is AED3,000.
- Most banks offer personal loan up to 20 times the gross monthly salary of the applicant.
- Most banks offer loan tenures of up to 48 months.
Benefits of personal loan in the UAE
The benefits of personal loan in the UAE are as follows:
- Most banks offer no payment option for the first two months.
- There are different packages offered for salaried individuals, non-salaried individuals, expats, and for Emiratis.
- Most banks offer optional insurance coverage.
- Free lifetime credit cards are offered by several banks in the UAE.
- Most banks offer Takaful coverage on the personal loan to offer security in the case of death of the individual, or disability.
- Customer will be allowed to opt for top-ups based on their salary hike and their loan requirements.
- Most banks in the UAE offer Islamic finance to their customers.
- In some cases, pull-over finance from other banks are offered.
- Most banks offer other value-added banking services along with instalment deferred option.
- Most banks in the UAE offer a free debit card to the expatriates.
- Some banks in the UAE offer loan return option. The customers can return their loan under this option.
Types of personal loans
In the UAE, you find the following types of personal loans:
- Personal loan for UAE Nationals:
The personal loans for UAE Nationals have attractive terms and conditions. The interest rates are attractive and the tenure offers convenience to the customers. The eligibility criteria is flexible and simple documentation is required.
- Personal loan for Expatriates:
Personal loans are offered to the expatriates who arrive in the UAE and find it hard to keep up with the lifestyle. The terms and conditions are different from the UAE Nationals. The deals are still attractive and it is easier for the expats to meet their financial requirements.
- Personal loan for self-employed professionals:
People who run their own business and those who assume the role of a proprietor is a self-employed individuals. It is harder for the self-employed individuals to get a personal loan as the income is not fixed. In the recent past, a lot of banks are offering personal loans to self-employed individuals.
- Personal loan without salary transfer:
Most banks in the UAE prefer that those availing a personal must do a salary transfer to their bank. There are a few banks that do offer a personal loan without the requirement to transfer the salary.
How to avoid personal loan rejection?
Your personal loan application could be rejected for multiple reasons. Some of them are as follows:
- You aren’t meeting the monthly income requirement.
- Company that you work for is not listed with the bank.
- If there is no guarantee that your employment will continue.
- If your debt to burden ratio is high.
- If your credit score is low.
- If you have entered incorrect personal details.
You can follow these steps to avoid getting personal loan rejection.
Take a personal loan to pay for your wedding
If you are planning a wedding and you don’t want to burden your parents, but you also do not have enough finances you can take a personal loan to have a wedding of your dreams. This also does not mean that you are stuck clearing off the debt for a long time after the wedding.
Can you get a personal loan if you are an employee of a non-listed company?
Major corporations are listed with most of the banks in the UAE. But, there is a good chance that a small firm will not be listed. If you are an employee of a non-listed company, you can still avail a personal loan. Though there will be limitation on the funds you can borrow. So its wise to know which banks offer personal loan to an employee of a non-listed company in the UAE.
Take a personal loan to help save money
As hard as it is to comprehend that a loan can help you save money, it is true. If you have sufficient finances, it is a good idea to opt for a personal loan. You need not take a personal loan if you are low on cash. You can take it to buy a TV or a fridge, go on a holiday, or to renovate your house. If you charge your expenses to your credit card, you will have to pay compound interest on the amount. So understand how taking a personal loan can help save your money.
Do’s and Don’ts while taking a personal loan
When you are taking a personal loan from a financial institution, it must be carefully thought and planned. So there are list of things that you must do and avoid at the time of taking a personal loan. Personal loan is a huge responsibility. You must never miss out on the loan repayments at any cost. Take a personal loan only when you are sure that you can repay it and after you have run out of other options.
Personal Loan eligibility for UAE Nationals and Expats:
Loan eligibility in the UAE can differ from one bank to another, but the general eligibility criteria for most banks in the UAE is:
- The applicant must be a minimum of 21 years of age
- The length of service can range from one month to six months
- The applicant must be drawing a minimum salary ranging from AED 3,000 to AED 5,000, and in some cases it may rise up to AED 15,000.
- Salary transfer is generally a requirement
- At the time of maturity, the maximum age for UAE nationals is 60 years and for expatriates 65 years.
Personal Loan documentation required:
The documentation required to avail of personal loans in the UAE can vary from bank to bank as well. However, the general documentation required usually consists of the following:
- Completed loan application form
- Identity documents (Passport copy, VISA copy, Emirates ID)
- Copy of valid passport with valid UAE residence visa for expatriates (Original required for verification)
- Salary transfer letter / salary certificate (For salaried employees)
- Bank statements - 3 to 6 months
- Trade license (For self-employed customers)
Banking sector in UAE
The banking sector in UAE is, by and large, protected, albeit, the presence of foreign banks has gradually been on the rise in the recent past. There are about 46 banks (including foreign banks) operating in UAE. Banks incorporated in Dubai and Abu Dhabi contribute almost 90% of the total domestic assets.
Islamic banking in UAE, was legalized in 1985. As per Islamic banking, banks cannot charge fixed interest rates on loans or deposits. There is a view that the central bank of UAE can only play a limited role in terms of setting interest rates and monetary policy as UAE currency is pegged to the US dollar.
There is a view that most UAE banks, by and large, are wary of becoming dependent on a personal loan market share (most banks do not have robust credit reports) owing to an expatriate workforce which, more often than not, does not have a long-term residency status. Expatriates in UAE can, therefore, open a bank account or avail any service only after they furnish a guarantee letter from their employers in addition to other guarantees.
Personal Loan in UAE - FAQ
- Will the death of the personal loan applicant affect the family?
- Do I need to provide security for my loan?
- Are there any advance costs involved when applying for a personal loan?
- What is Murabaha?
Personal loans taken from banks like Emirates NBD are automatically insured at a nominal fee and in the event of an untimely death the partner insurance company covers the entire loan amount, protecting the family from financial risk.
Assets are not required as security against your loan
Generally the only advance costs pertaining to a personal loan are processing and insurance fees
Murabaha is the sale of goods as ordered by the customer with a price consisting of cost plus promised profit margin paid on deferred installment payment.
Relevant Blog Posts on Personal Loan
Why the UAE Economic Slowdown Can Hurt Your Chances of Getting a Loan
It sure seems like this year is going to be tough for our oil-dependent economy, what with the crude oil prices constantly going down – lower by around 70% in the last 2 years! While the government tries to work out a plan to increase non-oil revenues (did you know that over 60% of the UAE budget is funded by oil revenues?) and spend less on infrastructure, the banks are worried about bad debt from small and medium enterprises (SMEs). Read More…
News about Personal Loan in UAE
Larger share of the UAE’s car market taken by Islamic Banks
The number of applications for Islamic car loans grew considerably in 2016 in the UAE. The applications for Islamic car loans increased by 64.79% from 2015. Most of the people earning below AED20,000 opted for Emirates NBD’s car loan and those earning above AED20,000 opted for HSBC’s auto loans. The 3rd and the 4th most applied auto loans were from Islamic Banks. Emirates Islamic auto loan came third, Noor Bank’s auto finance came fourth, and Ajman Bank’s car financed came fifth. Islamic Banks are making waves in the car loan segment.
06th February 2017
Personal Loans in the UAE Reaches AED434 Billion
The personal debts that are incurred by the UAE residents have slowed down due to the tight lending conditions. An average person in the UAE owes AED42,571 in debt. The personal debt owed is in the form of a car loan, credit card balances, and another form of personal borrowing. Though the personal debt has slowed down, it is still higher when compared to the same period in 2015. The personal debt in 2015 for the same period was AED41,240. There are speculations that the slowdown in personal loan debt will continue.
01st February 2017
UAE consumers are more careful about taking credit
As per the data collected by a company, in the UAE, there are a fewer people who have applied for personal loans in 2016 than there were in 2015. Those who applied for credit in 2016, made multiple applications. This shows that the borrower is cautious about taking credit. The number applications have increased which suggests that it is difficult for UAE residents to obtain a credit. With the low oil prices permeating various business aspects, the banks are taking more caution when it comes to lending.
30th January 2017
One month campaign offered by Mashreq bank for the Emiratis
On the National Day, the Mashreq bank decided to launch a unique campaign to thank the UAE and the Emirati people for making the country a great place for people to live and work in. Lounek Emirates is the product that is bundled with exceptional benefits. It is targeted towards the UAE Nationals receiving guaranteed prizes including Free Apple Watch when they take a personal loan of AED100,000 and above. If the UAE National takes a personal loan above AED300,000, they will get a free iPhone 7. The customers will also get exclusive Mashreq Solitaire credit card that has benefits such as airport pickup and drop off, VIP valet parking in shopping malls, Salaam Carats equivalent to AED1,000, and gym membership.
30th November 2016
Slight decline in personal loan rates in the UAE
The personal loan rates have lowered compared to a year ago. The cheapest personal loan will cost less than 5%. The lending institutions have tightened the conditions amidst the rising debt levels. Salary transfer loans averaged 6.62% in October which was 7.54% for the same period last year. The borrowing has increased and an average resident carries a debt burden of Dh42,600. The cheapest salary transfer loan is 4.74% while some banks offer loans for 11% and 20% as well. The rates are likely to increase in 2017 as the International Financial Reporting Standards will be implemented in January.
03rd November 2016
7.5% growth in personal loans in the UAE
According to NBAD, the average debt of a person in the UAE now stands at Dh42,600. The total personal loan debt reached 430 billion during the 2016 second quarter. Many households are feeling the pinch as there is no cash buffers as the economic environment remained subdued due to the decline in oil prices. The employment opportunity is limited, there have been job cuts but the high cost of living is putting pressure on the household budgets. The major concern according to a significant number of residents is that the cost of housing is high and the rise in education and utility bills also add to the problems. The rise in the personal loan is a huge concern as the population isn’t expanding as fast as it used to. The deposits aren’t strong and the banks are relying on borrowed funds.
19th August 2016
Demand for Line of Credits Slowing Down
The demand for loans seem to be slowing down especially in the business loan sector and personal loan sectors. The slump in demand has been felt particularly strongly in Dubai but has been a trend across UAE during the second quarter of 2016 and was confirmed through the latest report from the Central Bank of the country.
The slump in demand can be attributed to higher standards of credit. Defaulting loans has become a prime concern and due to the higher degree in averting risk, the standards for considering a loan application as viable have become much more stringent. The central bank survey also showed that the decline for business loans will continue into the third quarter of 2016. But individual requests such as car loans have only seen a moderate decline.
14th July 2016
UAE Residents looking out for Finance details online
It is seen that the majority of UAE residents are searching for financial products online. It is revealed by a survey made by one of the leading financial comparison sites in the UAE. According the survey, the search for financial products such as Credit Card and Personal Loans has gone up remarkably in the 1st quarter of 2016 compared to 2015. Also, the search for mortgage without salary transfer has increased by 450%. Simultaneously, the search for Islamic finance loan and Islamic finance mortgage has gone up by 240% and 380% respectively. The search for air miles and cashback benefits has also increased to 367% and 500% respectively. Also, the search for free credit cards has gone up by 543%.
29th June 2016
CSR Initiatives introduced by Emirates Islamic for Holy Month of Ramadan
With the onset of the holy month of Ramadan, one of the largest Islamic financial institutions in the country, Emirates Islamic has introduced a slew of promotional activities and CSR initiatives.
To spread joy during this holy month, Emirates Islamic has joined hands with a range of service providers that aim to make the lives of those in need easier and happier. Initiatives include the partnering up with the transportation company ‘Careem’ and providing free rides to the mosque.
Iftar Meals are also provided through their partnership with Dar Al Ber. Along with this, Emirates Islamic has also sponsoring the Dubai International Holy Quran Award.
14th June 2016
Islamic Banks in UAE Now Offering Loans for Payday
In UAE, companies generally offer their employee's salary advance in the case of an emergency or even for a vacation. Also there are provisions by banks in the country to take loan against their salary credit. Some of these banks include Dubai Islamic Bank (DIB) along with ADCB (Islamic Banking) who provide this advantage to their existing and new customers as long as their salaries are credited regularly to the bank.
This type of loan is already popular in America, Europe and Africa, and it is picking up pace in UAE with some banks in the country offering this advantage too. Dubai Islamic Bank (DIB) has a particular scheme allowing borrowers to withdraw up to 90% of their salary. They charge AED 295 for every transaction for this salary in-advance advance facility AED 1,000 to AED 13,500. For withdrawing a salary advance within AED 13,501 to AED 30,000, a service fee is charged amounting to AED 500 for every transaction.
07th June 2016