UAE Central Bank introduces eligibility criteria for expat personal loans

The Central Bank of the UAE allows individuals to seek personal loans secured by their salary and end-of-service gratuity.

Expats have a myriad of loan options available, ranging from education loans for students to co-applicant programs for family members. Many banks now offer convenient online application processes for those in need of borrowing funds.

Regarding personal loans, applicants must meet specific eligibility criteria outlined by the Central Bank. Individuals must be at least 21 years old, with a maximum age limit typically ranging from 60 to 65 years. Minimum income requirements vary among financial institutions, typically falling between Dh5,000 and Dh8,000.

Additionally, applicants must demonstrate a stable employment history of at least six months and possess a confirmed salary. Banks also conduct credit checks to assess the borrower's financial capability and creditworthiness.

Various documents are necessary for loan applications, including copies of the Emirates ID, passport, visa, and bank statements spanning three to six months. Additionally, a salary transfer certificate is usually required to verify income.

To ensure responsible lending practices, the Central Bank imposes regulations on both borrowers and banks. Personal loans cannot exceed 20 times the borrower's salary, and repayment must occur within 48 months, with monthly deductions not exceeding half the borrower's salary. Banks may extend loans up to Dh5 million, contingent on specific policies and borrower qualifications.

Furthermore, loans with repayment periods extending beyond retirement age must ensure that only 30% of the income is deducted. Banks are prohibited from accepting post-dated checks exceeding 120% of the loan value or debit balance. Additionally, banks are required to declare the annual interest rate based on the loan balance reduction.

These guidelines aim to promote responsible borrowing practices and ensure transparency in the lending process.

Read also: UAE: Nine Pakistani Nationals injured in Ajman Factory Fire, rushed to hospital

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