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Monday, January 27, 2014

Tips for getting a personal loan in Dubai

Dubai loan tips
The DFSA regulates banking services
If you’ve just moved to the UAE, then it’s worth noting that there are a number of factors that differ within their banking system. 

Like anywhere in the world, Dubai and the surrounding area has its own way of doing things and if you’re an expat then you will need to consider this when undertaking any financial process.

Moving anywhere is like learning a whole new set of rules, so it’s a good idea to research and read lots of similar blogs to this one to get a feel for what is available in terms of a personal loan – and also what is expected from you. This way, you can enjoy the benefits of a personal loan without any worry.

Here are a few tips to start you off:

Go with a reputable bank

  Established financial institutions understand banking
If you are sure you need a loan and have no alternative way of borrowing funds from friends or family in the interim, then do your homework and find a reputable bank.

It’s easy to just go with the first one you stumble across or that offers you a loan, but you should always research the bank and check that they’re a reputable, well-established bank that is well-known.

Be sensible about what you borrow

You should always consider your outgoings for each month, and decide on a figure that you can comfortably pay back. Don’t try to push your finances to the limit in order to get a bigger loan, or pay it back sooner when you cannot comfortably do this – you should be completely realistic and honest with yourself about repayments, then apply this to what you borrow.

You need to borrow enough to cover what you need, but make sure you pay it back over a length of time that makes the loan repayments comfortable, so that after paying all of your bills and taking out what you need, you would able to make your loan repayment and still enjoy your life. This is where a loan calculator can be a valuable asset in organising your finances.

Credit utilization is a key metric used by lenders
Too many loans reduce credibility

Don’t apply for too many loans

Applying for loans means you leave behind a ‘footprint’ which lenders can see on your credit record.

The more loans you apply for, the more it will appear you have been rejected by the others and are in a desperate way. So it will be extremely off-putting for lenders who will view you as a credit risk if they see on your credit record that you’ve applied for numerous different loans.

Check the terms

Never assume that all banks have ‘more or less’ the same terms and conditions, as all banks will have their own set of regulations that you will need to adhere to when you sign up for loans with them.

Keep up repayments

This comes back again to number 2, as when we talked about being sensible about the amount you borrow, it was because it is hugely important to keep up your repayments. In the worst case scenario, it can result in you losing your home, so it is crucial that you are vigilant in paying your bill each month. As long as you agree on a low enough amount that isn’t overstretching yourself then you should be fine.

Image licenses: 1. Bad Boy, CC BY-SA 2.0, 2. Yeowatzup, CC BY 2.0, 3. Ishrona, CC BY 2.0