Have you been wondering how you can get a private loan in Dubai? Worry no more because we have the details.
Accessing a loan from private lenders does not mainly require official documentation as banks do. This article will take you through the steps to help you access a personal loan in Dubai easily.
What Are The Eligibility Criteria For Getting Loans From Private Lenders?
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Proof of identity
It is well known that most private lenders do not mostly rely on official documentation to determine the amount of loan you may require. However, you will need to show proof of your identity, i.e., Emirates ID.
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Your Credit History
In most cases, the lenders check your creditworthiness to know the amount of loan you are eligible for.
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Importance of your collateral
Collateral is what you may give to the lenders in case of failure to repay the loans. The loans, in this case, are, therefore, termed secured. In addition, the value of your collateral would also determine the amount of loan you can receive.
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Amount of your down payment
The private lenders in the UAE consider the down payment since it determines the amount of loan you may afford to pay back. This is particularly necessary for auto loans.
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Liquid assets
The private lenders would gladly like to see that you have liquid investments like a capital market report and savings that can quickly turn into cash.
This reassures your lenders that even if you experience any payment problems, you will still be able to keep up with your payment. It also lowers interest rates.
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Loan term
Depending on your ability to pay the loan, lenders always like issuing out short-term loans rather than long-term loans for ease of payment. However, you will be able to choose the right loan to take based on your ability to repay.
What Are The Interest Rates?
Private lenders impose larger interest rates compared to banks and other monetary organizations.
This is because they take advantage of the fact that a bank has rejected your application, and you have no alternative other than them.
Also, the payment of the loans is over a short duration of time, failure to which the interest rates may go much higher.
Is Private Money Lending Illegal In The UAE?
In the UAE, some private money lending institutions have been termed illegal due to the lack of documentation of their businesses.
The reason why it is illegal is the fact that they take advantage of the borrowers by accessing their personal information and using them against the borrowers.
IN CASE of VIOLATION, the UAE state may arrest both the lender and the borrower.
Where Can One Get A Personal Loan In Dubai?
In the UAE, there are legally registered private lenders that operate legally. Although they offer their loans at higher interest rates than the banks, you can still approach them and acquire a personal loan.
The advantage of these private loan organizations is that you can access the loans through various means, i.e., through collaterals or liquid assets. In addition, if you have a business, you may also consider Crowdfunding.
However, it is always advisable that you go for the legal private lending organizations to be safe.
Examples of private lending organizations you can consider in Dubai include; ADCB private loan, CBD private loan, and Noor Bank Personal Loan.
Other Legal Options To Consider
When options of getting a loan seem to run out, you may turn to other legal options to get a loan.
There are financial institutions in UAE that are known to offer personal loans to borrowers. Remarkably, they follow a legal process of issuing loans to individuals and thus are trusted by the government of the UAE.
To access a loan from these institutions, you must meet their eligibility conditions. The two other legal options include:
It is a private finance company in the UAE that mainly offers Sharia-compliant loans. It is most suitable for individuals looking for fast loans and small-medium enterprises that are still growing.
They offer fair interest rates compared to other private money lenders and are thus the best option you should go for.
Its establishment gave rise to a financial institution where one can go and borrow a personal loan at a reasonably good interest rate.
It is an independent financial company primarily relied on by businesses and individuals for loan offerings in the UAE. Hence, it’s the other option you may choose to go for.
Procedure To Apply For A Personal Loan In The UAE
In the UAE, getting a private loan often follows some procedures to assure the lender that you can repay the loan. Hence, for you to apply for a loan;
- Check the monthly installment plan of your preferred bank – Before you ask for a loan, it is best advised to check the monthly installment plan of the lender you choose. This will help you gauge how much loan you may borrow and how much interest you will be able to pay back.
- How much you can borrow – Depending on your preferred private lender, you should check the company’s loan limits and choose what’s suitable for you for ease of repayment.
- Visit the bank or apply for the loan online – For you to access the loan, you should visit the bank and ask for the loan. Explain the type and amount of loan you want to the sales representative for you to get the best option and make an application. Alternatively, you can apply online.
- Documents submission
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