Are you someone who has been trying to get loans for various banks in Dubai and getting rejected every time? There are several reasons for a loan getting rejected.
From the lack of proper documents to failure to meet the eligibility criteria, banks have more than enough reasons to not accept your application. However, does that mean that you won’t get a loan? Are there no other options for getting a loan in Dubai?
As a matter of fact, there are many options for getting a loan in Dubai. Some of these options can get you loans faster than banks.
However, with these options, there are a lot of risks and hurdles. In this article, we are going to cover the various aspects of loans from private lenders and the risks associated with getting a loan from them.
What are the eligibility criteria for getting loans from private lenders?
There is no eligibility requirement for getting loans from private lenders. You can get a loan immediately.
There is no documentation and there is no minimum salary requirement. You do not have to worry about rejection when you are taking loans from this kind of loan provider.
However, there are disadvantages of getting loans from such lenders which you will get to know in the latter part of this article.
What are the interest rates?
People usually approach private lenders when their loan application gets rejected from banks. Lenders take advantage of the situation and offer loans at a very high-interest rate.
Borrowers have to repay the loan on short tenures and if they fail to repay on time, they have to bear an even higher interest rate.
The interest rates charged are almost double the amount charged by banks. In some cases, it is even higher.
Is personal money lending illegal in the UAE?
Private money lending without the required license is illegal in the UAE. On top of that, harassing people who are not able to repay the loan is a heinous crime.
On getting caught, both the lender and the borrower may have to face legal consequences. There have been cases where borrowers had to submit their passport as collateral to the lender. This is another illegal activity that is punishable by law.
Where can a person get a private loan in Dubai?
There are some government registered private lenders that operate legally. You can approach these companies, apply for a loan and get it approved without getting into any legal issue. You can also consider crowdfunding if you want money for your business. You can also approach financial institutions which offer loan through collaterals. This is particularly useful when you do not have the required salary to get loan approval. All these options are better than getting loans from private lenders who charge insanely high interests and that too illegally.
Other legal options
There are two financial institutions in particular that provide private loans following the legal process. To get a loan from these companies, you have to meet the eligibility requirements as with any other banks.
However, the eligibility conditions with these private institutions are not as stringent as banks. These are the two companies where you can apply for such loans:
PROCEDURE TO APPLY FOR A PERSONAL LOAN IN THE UAE
If you meet the basic eligibility criteria, you can initiate a private loan application in the UAE. To apply for a loan:
- Take into account the monthly installment plan of your preferred bank
- Check how much you can borrow
- Visit the bank or apply online on their website
- Submit the following documents with the loan application form:
- Emirates ID
- Salary transfer letter
- A passport copy with a UAE resident visa (for expats)
- Bank account statement of three to six months
- Trade license (for self-employed individuals)
- Wait for the loan provider to verify your application
Getting loans from private money lenders in the UAE is easy. You can get a loan in a matter of minutes. However, considering the risks and the law against this kind of activity, it is better to stay away from illegal private lenders in Dubai.
Want to know more about the Best Private Money Lenders in the UAE? Read this article to get answers to all your questions.