According to Central Bank of the UAE, individuals may apply for a personal loan secured by the borrower’s salary and end of service gratuity, or any regular income they have from a well-defined source.
Personal loans should not exceed 20 times’ the salary value or the total income of the borrower. Banks and finance companies must make sure that this limit is not exceeded.
The repayment period for personal loans must not exceed 48 months, against a monthly deduction of no more than half the borrower’s salary.
If a loan or a banking facility's repayment period extends to the retirement age, banks and finance companies must re-schedule reduction of these loans or finance facilities in a way to allow a deduction of only 30 per cent of the income or pension salary.
Banks and finance companies may only take from the customer the number of post-dated cheques covering the installments and of value not exceeding 120 per cent of value of the loan or the debit balance.
Each bank or finance company must calculate and declare the interest rate charged for the loans. The rate must be determined on basis of the reducing balance of the loan on annual basis.
You can apply for a personal loan through the registered banks and finance companies in the UAE.
Updated on 09 Aug 2020