Getting a loan in Dubai is one of the most important things for people who are new to the country and need some initial cash flow to support their lifestyle and other needs. While there are a lot of banks in Dubai that offer loans, you have to find the one that suits your financial needs.
Before that, you have to understand the eligibility criteria, the documents required for the application, the process of application and other important details. In this article, we have covered all of these in detail. Make sure you read through this article till the end so that you get to learn exactly how you can get a loan in Dubai.
Where can you get a loan in Dubai?
You can apply for a loan in a bank or a private lending company. There are different terms and conditions which have to be met before you get loans from a bank or a lending company. Understanding these terms and conditions in advance will help you go through the process with ease. Let’s start by understanding the eligibility and requirements for loan approval via banks.
What are the eligibility criteria for getting a bank loan in Dubai?
- Applicant should be salaried/self-employed
- Applicant should possess a valid passport or a valid UAE National ID card
- Applicant should possess a valid residency visa for the UAE
- Applicant should possess a letter of salary transfer in case it is asked by the bank
- Applicant should have served at least six months of employment in the company
- Applicant should have a working contract that outlasts the repayment period of the loan
What are the documents required?
- National ID card (for UAE nationals)
- Resident visa (for expatriates)
- Proof of income
Some banks may require you to have a minimum salary of a certain amount. If you do not meet the salary requirement, you may not get a loan from that bank. In that case, you can opt for banks and financial institutions which do not have a minimum salary requirement.
In most cases, you can apply for the loan online. However, you will have to visit the bank in person afterward. The process involves initial documentation for eligibility confirmation. Once that is done, banks follow some formal protocol and check the trust factors of the applicant. After this, the bank processes the loan within a few days.
There are a lot of banks that offer different types of loans in Dubai which include business loans and personal loans. There are also some private loan providers that can help you get loans. The application process for these private loan providers is very similar to that of banks. The difference could be in the eligibility criteria and the requirements. Private lenders have fewer requirements than banks. However, you have to make sure to compare the features of any financial institution before you apply for a loan.
Ten Golden Rules to follow when Taking a Loan in Dubai
- Don’t borrow more than you can repay
- Ensure timely and regular repayment of installments
- Don’t borrow to invest or splurge
- Take insurance with huge amount of loan
- Keep shopping for cheaper rates on loans
- Understand the loan documents properly
- Substitute high cost loans
- Repay loans before retirement
- Keep your family or close ones in the loop while taking a loan
- Keep loan tenure as short as possible
A word of caution
The ideal practice when applying for a loan is to approach a bank first. If the banks don’t approve of the loan for certain reasons, try getting the loan from private lending companies. There are companies that offer a loan on minimal documentation. However, you have to be careful and stay away from loan sharks. There are illegal loan providers in Dubai who constantly look for people desperate for loans. They offer loans at a very high interest rate and torture the borrower if they do not repay the money on time.