A Comprehensive Guide to Personal Loan Interest Rates in 2021
A personal loan is a loan that may be secured or unsecured and is offered with minimal documentation. You can use the funds from this loan for any financial need. Like any other loan, you must repay it as per the agreed terms with the bank in easy EMI (equated monthly installments).
Personal loans in UAE today are the preferred means of short-term credit. The bank offers personal loans based on two types of interest rates – flat rates and reducing rates. A flat rate of interest on a loan refers to when the interest and sum payable is calculated at the start of the repayment schedule and do not change until the loan has been paid off. Whereas in terms of reducing rate of interest on a loan the principal amount reduces after each installment. The interest percentage (which remains constant) is charged on the reduced amount, every month. Thus resulting in different installment amounts each month.
Types Of Personal Loans
Personal loan with salary transfer: This is most probably the first loan one can avail from the bank where the customer holds a salary account. These loans are low in interest rates compared to the other personal loans without a salary transfer. Banks offer competitive interest rates for their customers for such loans and generally require a minimum salary requirement of AED 5000 (which differs from bank to bank). If you wish to take the loan from another bank where you don’t have any account then you have to maintain an account with the bank and transfer the salary into it every month.
Personal loan without salary transfer: This is one of the popular loans that allow the loan seeker to apply for a personal loan without having to transfer their salary into a particular bank account. Interest rates are higher for such loans and the lending amount might be lower than a Salary Transfer loan.
Expat loans: Expatriates are those people who live in the UAE but aren’t residents of the UAE. To help them manage their financial needs easily, banks offer personal loans to ex-pats as well with attractive interest rates and repayment tenure up to 48 months.
Buyout loans: When you take a personal loan that can be used to pay all of your previously existing loans or a credit card debt it is known as a buyout loan. In this type of loan, the borrower has to pay a fixed monthly payment to the bank for a pre-defined period that is usually two years to five years to pay off your buyout loan. Both UAE nationals and ex-pats can apply for such loans.
Consolidation loan: Debt consolidation services allow for the consolidation of all your outstanding liabilities arising from various loans or outstanding dues on credit cards into one single consolidated liability. Such loans are advantageous because you are being able to manage all outstanding liabilities together in one consolidated form.
Consider the comparison table below on interest rates offered by banks in the UAE
| Bank Name | Loan Name | Fixed Interest Rate | Reducing Interest Rate | Minimum Salary | Maximum Loan Amount |
|---|---|---|---|---|---|
| Abu Dhabi Commercial Bank | Personal Finance | 3.25% | 5.90% | AED 10,000 | AED 0 |
| Abu Dhabi Commercial Bank | Personal Loan | 6.25% | 11.33% | AED 10,000 | AED 250,000 |
| Abu Dhabi Commercial Bank | Personal Loan For Expatriates | 6.25% | 11.33% | AED 10,000 | AED 25,000 |
| Abu Dhabi Islamic Bank | Debt Settlement | 3.58% | 6.50% | AED 8,000 | AED 1,000,000 |
| Abu Dhabi Islamic Bank | Education Finance | 3.85% | 6.99% | AED 8,000 | AED 250,000 |
| Abu Dhabi Islamic Bank | Personal Finance | 3.72% | 6.75% | AED 8,000 | AED 1,000,000 |
| Al Hilal Bank | Personal Finance | 3.25% | 5.90% | AED 10,000 | AED 0 |
| Arab Bank | Personal Loan | 3.30% | 5.99% | AED 5,000 | AED 550,000 |
| Citibank | Personal Installment Loan | 7.71% | 14.00% | AED 8,000 | AED 175,000 |
| Citibank | Salary Transfer Loan | 3.85% | 8.00% | AED 8,000 | AED 250,000 |
| Commercial Bank Of Dubai | Personal Loan | 3.03% | 5.50% | AED 8,000 | AED 750,000 |
| Deem Finance | Personal Loan | 11.01% | 19.99% | AED 5,000 | AED 0 |
| Dubai Islamic Bank | Liabilities Settlement Finance | 0% | 0% | AED 5,000 | AED 0 |
| Dubai Islamic Bank | Personal Finance | 6.06% | 11.00% | AED 5,000 | AED 2,000,000 |
| Emirates Islamic | Personal Finance | 2..17% | 3.94% | AED 5,000 | AED 1,000,000 |
| Emirates NBD | End-Of-Service Benefit Backed Personal Loan | 3.30% | 5.99% | AED 5,000 | AED 0 |
| Emirates NBD | Loans For Nris | 2.20% | 3.99% | AED 5,000 | AED 0 |
| Emirates NBD | Salary Transfer Loan | 2.63% | 5.99% | AED 5,000 | AED 1,000,000 |
| Emirates NBD | Salary Transfer Loan For UAE Nationals | 2.63% | 5.99% | AED 5,000 | AED 3,000,000 |
| Emirates NBD | Loans For New To Country, New To Employment | 2.63% | 5.99% | AED 10,000 | AED 400,000 |
| Emirates NBD | Personal Cash Loan | 4.96% | 8.99% | AED 10,000 | AED 500,000 |
| Emirates NBD | UAE National Personal Loan With Additional Income | 3.18% | 5.24% | AED 10,000 | AED 3,000,000 |
| Emirates NBD | Personal Loans For Self-Employed Professionals | 10.40% | 18.90% | AED 20,000 | AED 300,000 |
| Emirates NBD | Personal Loans For Self-Employed Individuals | 10.40% | 18.90% | AED 25,000 | AED 0 |
| First Abu Dhabi Bank | Buyout Loans | 4.08% | 7.40% | AED 5,000 | AED 5,000,000 |
| First Abu Dhabi Bank | Landlord Loans | 5.10% | 9.25% | AED 5,000 | AED 2,000,000 |
| First Abu Dhabi Bank | Islamic Personal Finance | 2.64% | 4.99% | AED 7,000 | AED 5,000,000 |
| First Abu Dhabi Bank | Personal Loans For UAE Expats | 4.99% | 3.99% | AED 7,000 | AED 5,000,000 |
| HSBC | Personal Loans | 4.13% | 7.49% | AED 7,500 | AED 750,000 |
| Mashreq | Debt Consolidation Loans | 0.00% | 0.00% | AED 5,000 | AED 0 |
| Mashreq | Personal Loan For Expatriates | 6.25% | 11.50% | AED 5,000 | AED 1,000,000 |
| Mashreq | New To UAE, New To Employer Loan | 4.07% | 7.38% | AED 7,000 | AED 150,000 |
| Mashreq | Non Salary Transfer Personal Loan For Expatriates | 14.10% | 25.60% | AED 7,000 | AED 150,000 |
| Mashreq | Emirati Personal Loans For Pensioners | 0.00% | 0.00% | AED 10,000 | AED 0 |
| Mashreq | Personal Loans For Emiratis | 0.00% | 0.00% | AED 10,000 | AED 3,000,000 |
| Nbf | Personal Loans | 3.25% | 6.25% | AED 5,000 | AED 0 |
| Rakbank | Non Salary Transfer Loan | 5.99% | 10.86% | AED 5,000 | AED 1,250,000 |
| Rakbank | Business Finance | 12.00% | 21.00% | AED 50,000 | AED 3,000,000 |
| Sharjah Islamic Bank | Personal Finance | 0.00% | 0.00% | AED 5,000 | AED 0 |
| Standard Chartered | Saadiq Personal Finance | 4.16% | 7.55% | AED 15,000 | AED 1,000,000 |
| Standard Chartered | Debt Consolidation Plan Loan | 3.89% | 7.05% | AED 30,000 | AED 1,000,000 |
| Standard Chartered | Personal Loan | 3.89% | 7.05% | AED 30,000 | AED 1,000,000 |
| Union National Bank | Expatriates Loan | 3.13% | 5.68% | AED 5,000 | AED 500,000 |
| Union National Bank | Education Loan | 4.96% | 9.00% | AED 10,000 | AED 0 |
| Union National Bank | Non Salary Transfer Loan | 7.72% | 14.00% | AED 10,000 | AED 0 |
| Union National Bank | Rent Loan | 4.96% | 9.00% | AED 10,000 | AED 0 |
| Union National Bank | UAE Nationals Loan | 2.48% | 4.50% | AED 10,000 | AED 500,000 |
| United Arab Bank | Personal Loan For Expatriates | 3.03% | 5.49% | AED 7,500 | AED 2,000,000 |
| United Arab Bank | Personal Loans For UAE Nationals | 3.03% | 5.49% | AED 7,500 | AED 2,500,000 |
The above interest rates are purely indicative. Interest rate is generally based on factors such as
- Bureau Score
- Income
- Loan Amount
- Employer
The Biggest Advantages of Using an EMI Calculator Before Applying For Your Personal Loans in UAE
Before finalizing any personal loan, you should always use the EMI calculator because it will assist you to evaluate, simulate and arrive at the maximum loan amount, interest rate and affordable easy monthly instalments will help you select the best suited personal loan as per your budget. Soulwallet personal loan EMI calculator is easy to use, simple to understand, and is quick to perform. All you need is to use the slider to adjust the loan amount, interest rate (reducing), and tenure. You will get the EMI, total repayment, total interest, and interest rate (flat) as per your input.
