Personal Loans in Dubai, UAE

Personal loan Interest Rates in UAE

Minimum Salary

Interest Rate

Loan Amount

Reducing Rate

ADIB Boat Finance for UAE Nationals

Interest Rate

6.75%

Flat Rate

3.72%

Minimum Salary

AED 8000

Reducing Rate

6.75%

Max Loan Amount

AED 1000000

Early Settlement Fee

1%

6.75%

Interest Rate

3.72%

Flat Rate

AED 8000

Minimum Salary

AED 1000000

Max Loan Amount

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ADIB Personal Finance for Expats

Interest Rate

6.99%

Flat Rate

3.85%

Minimum Salary

AED 8000

Reducing Rate

6.99%

Max Loan Amount

AED 1000000

Early Settlement Fee

1%

6.99%

Interest Rate

3.85%

Flat Rate

AED 8000

Minimum Salary

AED 1000000

Max Loan Amount

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Dubai Islamic Bank Liability Settlement Finance for expats

Interest Rate

11%

Flat Rate

6%

Minimum Salary

AED 5000

Reducing Rate

11%

Max Loan Amount

AED 2000000

Early Settlement Fee

1%

11%

Interest Rate

6%

Flat Rate

AED 5000

Minimum Salary

AED 2000000

Max Loan Amount

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RAKBANK Amal Personal Finance

Interest Rate

5.99%

Flat Rate

3.3%

Minimum Salary

AED 3000

Reducing Rate

5.99%

Max Loan Amount

AED 1250000

Early Settlement Fee

1%

5.99%

Interest Rate

3.3%

Flat Rate

AED 3000

Minimum Salary

AED 1250000

Max Loan Amount

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Standard Chartered Salary Transfer Loan

Interest Rate

6.5%

Flat Rate

3.5%

Minimum Salary

AED 8000

Reducing Rate

6.5%

Max Loan Amount

AED 1000000

Early Settlement Fee

1%

6.5%

Interest Rate

3.5%

Flat Rate

AED 8000

Minimum Salary

AED 1000000

Max Loan Amount

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Emirates NBD Self Employed Personal Loan for Individuals or Entities

Interest Rate

19.99%

Flat Rate

11.51%

Minimum Salary

AED 25000

Reducing Rate

19.99%

Max Loan Amount

AED 300000

Early Settlement Fee

1%

19.99%

Interest Rate

11.51%

Flat Rate

AED 25000

Minimum Salary

AED 300000

Max Loan Amount

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FGB Personal Installment Loan

Interest Rate

20%

Flat Rate

11.02%

Minimum Salary

AED 5000

Reducing Rate

20%

Max Loan Amount

AED 200000

Early Settlement Fee

1%

20%

Interest Rate

11.02%

Flat Rate

AED 5000

Minimum Salary

AED 200000

Max Loan Amount

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Ajman Bank Take Over Finance

Interest Rate

6.25%

Flat Rate

3.44%

Minimum Salary

AED 20000

Reducing Rate

6.25%

Max Loan Amount

AED 4500000

Early Settlement Fee

1%

6.25%

Interest Rate

3.44%

Flat Rate

AED 20000

Minimum Salary

AED 4500000

Max Loan Amount

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Al Hilal Bank Personal Finance Settlement of liabilities for Expats

Interest Rate

5.9%

Flat Rate

3.25%

Minimum Salary

AED 7000

Reducing Rate

5.9%

Max Loan Amount

AED 1500000

Early Settlement Fee

AED 0

5.9%

Interest Rate

3.25%

Flat Rate

AED 7000

Minimum Salary

AED 1500000

Max Loan Amount

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RAKBANK Personal Loan

Interest Rate

5.99%

Flat Rate

3.3%

Minimum Salary

AED 3000

Reducing Rate

5.99%

Max Loan Amount

AED 1250000

Early Settlement Fee

1%

5.99%

Interest Rate

3.3%

Flat Rate

AED 3000

Minimum Salary

AED 1250000

Max Loan Amount

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UAE has been experiencing a steady rise in the banking sector in recent times. With over 40 banks (domestic + foreign), customers have a range of options to choose from. Islamic banking, where banks cannot charge fixed interest either on loans or deposits, has been operational for at least three decades now. Also, with the Dirham being pegged to the USD, foreign banks play an important role in setting the interest rates. With a huge amount of expatriate population, banks in UAE take additional precautionary measures before sanctioning loans to reduce the possibility of an NPA (Non-Performing-Asset).

What is a Personal Loan?

Like credit cards, personal loans are unsecured loans – there is no security against it. These loans are advanced based on your credit history and ability to pay the loan. Usually, the repayment is via monthly instalments over a fixed tenure. UAE offers flat and reducing interest rates for personal loans.

Benefits of Personal Loan

UAE offers a host of benefits for people availing Personal Loans. Let’s look at a few of them:

  • Different options available for salaried, self-employed and locals.
  • Many banks offer free lifetime credit cards to all personal loan customers.
  • Few banks offer the first few months of payment-free period. The instalments start after the end of this period.
  • You can opt for an insurance cover for your loan to hedge against exigencies.
  • Personal loans compliant with the Islamic laws are available with most banks in the UAE.
  • Top-up options are available in proportion to the increase in salary.
  • Takaful coverage is available on Personal loans which offers financial security in case of disability or death of the individual.

Salient Features of a Personal Loan

  • You can avail a loan from AED 200,000 to AED 5 million for UAE Nationals.
  • The interest rate depends on your income and the loan amount. It can start from 5% p.a. (reducing) or 2.7% p.a. (fixed) and can vary from bank to bank.
  • The minimum salary requirement to avail a Personal Loan in UAE is AED 3,000.
  • Majority banks offer an amount of or up to 20 times your gross monthly salary as a Personal Loan.
  • The tenure of the loan can stretch up to 48 months (4 years).

Flat and reducing rates?

It’s important that you understand the difference between these to make a comparison and choose what is best for you. Let’s look at both with an example:

Mr. X takes a personal loan of AED 100,000 for a tenure of 5 years. For example, let’s assume that the rate of interest is 10% p.a. for both flat and reducing options. The payback calculation would look as follows:

Flat Rate of Interest
Year Outstanding Principal Principal Component Interest Component Amount to be paid per year Instalment
0 100,000
1 80,000 20,000 10,000 30,000 2,500
2 60,000 20,000 10,000 30,000 2,500
3 40,000 20,000 10,000 30,000 2,500
4 20,000 20,000 10,000 30,000 2,500
5 0 20,000 10,000 30,000 2,500
Total 100,000 50,000 150,000

As shown above, Mr. X will end up paying AED 150,000 over the tenure of 5 years if he opts for the flat rate of interest.

Reducing Rate of Interest
Year Outstanding Principal Principal Component Interest Component Amount to be paid per year Instalment
0 100,000
1 83,620 16,380 10,000 26,380 2,198.33
2 65,603 18,018 8,362 26,380 2,198.33
3 45,783 19,819 6,560 26,380 2,198.33
4 23,982 21.801 4,578 26,380 2,198.33
5 0 23,982 2,398 26,380 2,198.33
Total 100,000 50,000 150,000

As shown above, Mr. X will pay only AED 131,899 if he chooses the reducing interest rate option.

Please note that this example is purely for explaining the difference between the interest rates and not an indicator of the market. Choose the interest rate that best suits your needs by talking to a financial advisor.

Eligibility for Personal Loan in UAE

Every bank has its own eligibility criteria which needs to be checked individually. However, some basic requirements are as follows:

  • You must be at least 21 years of age.
  • You must be currently employed and working for around one-to-six months minimum (varies from bank to bank)
  • Minimum salary must be around AED 3,000 (again each bank has its own minimum requirement)
  • Usually, you are required to transfer your salary to the bank from which you are availing the Personal Loan.
  • You must pay back the loan before you turn 65 years (for expatriates) and 60 years (for UAE Nationals).

Documents required for Personal Loan in UAE

Like eligibility, documentations can also vary from bank to bank. Some basic documents needed are:

  • Loan application form – completed and duly signed.
  • Some identity documents like Passport, copy of the VISA, Emirates ID, etc.
  • For Expatriates – Valid Passport with a valid UAE residence Visa.
  • Salary certificate and/or salary transfer letter
  • Statement(s) of your bank account(s)
  • For self-employed individuals – Trade License

Personal Loan application rejection

There can be multiple reasons and it can help if you spend time understanding the eligibility requirement before applying for a loan. Some common reasons are:

  • Salary requirement not met.
  • The company you work for is not listed with the bank.
  • Your Debt-to-Burden Ratio (DBR) is very high. In simple words, the percentage of your income being used to repay all your debts is more than 50%.
  • You have a low credit score.
  • Incorrect or incomplete personal information provided.

Banks don’t usually disclose the reason behind rejection. Following the basic hygiene of submitting a completed and correct application, checking your credit score and eligibility and clearing existing debts can ensure that you maximize the chances of your application being approved.

FAQ’s

Q. What aspects should I consider before availing a Personal Loan?

A. Primarily, you must look at banks that offer the loan amount desired by you. Every bank has a different maximum limit and some window-shopping can help. Once you have finalized on few banks, then you should consider the minimum salary requirements of each of them. Try to choose the bank which offers the maximum loan amount on your salary. Choose between flat and reducing rates carefully (see example above). All banks will have different fees & charges structure. Please make sure that you understand all these charges completely and consider additional benefits offered by banks, before you apply for a loan.

Q. Do I have to take an insurance on my Personal loan?

A. Banks, usually provide an insurance cover on a personal loan. If not, then it is advisable to take an insurance to hedge against the risk of being unable to pay back due to illness, disability or death.

Q. What is an early settlement fee?

A. If you wish to pay off your loan before the end of the stipulated tenure, then banks usually charge an ‘early settlement fee’. The UAE Central Bank has capped the early repayment fee at 1% of the outstanding loan amount.

Q. What if another bank is offering lower rate of interest? Can I transfer my loan to that bank?

A. Yes. However, you must check this with the bank before you avail a loan. It is better to be clear about these policies than repent it later.

Q. My company is not listed with most banks that I have spoken to. What do I do?

A. Most companies are listed with banks in the UAE. However, it is possible that certain small firms may not be listed. If you find yourself working for one such firm, don’t lose hope. The options might be limited and the amount offered might be low but many banks in UAE offer loans to employees of non-listed companies. Some such banks are Citibank, Emirates NBD and ADCB.

Q. What can I use a Personal Loan for?

A. A Personal loan can be used for any personal purpose. Whether it is marriage or travel or home-improvement, you can use it however you want.