Loan Buying Tips in Uae

Tips to consider before taking a personal loan in the UAE

A loan is a debt that people resort to when they are looking to purchase something that otherwise

would have been difficult to buy in normal circumstances. The entire process of a loan application

can become a tedious task, especially in a country like UAE, where banks have different criteria as

compared to banks in other countries. The minimum salary needed in order to apply for a loan in the

UAE is AED 5,000. Banks in the UAE provide an array of loan options and offers, to choose from as

per the requirements of an individual. With so many choices to look at, choosing the one which

satisfies your financial need can be difficult. We list down some of the most important tips to

consider when taking a personal loan in the UAE:

1. Check out all possible options

With more than 30 banks offering loans in the UAE, a sensible way of going about your loan selection

is to explore the options provided by various banks. This would not only give you a thorough

understanding of your loan terms, but also help in identifying the most suitable bank. Choose a bank

that offers the best interest rate. The rate of interest applicable to an individual depends on his or

her income. The greater the income earned, the lesser will be the rate of interest on the loan. Apart

from interest rate, it is also important to identify other factors such as loan foreclosure, late payment

charges, other additional charges, etc. Always keep in mind that when it comes to loans, what you

see is not always what you get.

2. Understand the Rate of Interest

Having a thorough knowledge about how the rate of interest works is extremely important when

taking a personal loan. Interest on loans can be charged either on fixed or reducing rates. A fixed

rate of interest loan calculates your interest on the entire loan amount and does not consider the

amount already paid, whereas interest on a reducing interest rate loan reduces gradually as the

amount gets...