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credit score is now available digitally for consumers through AECB App

AECB credit score is now available digitally for consumers through AECB App

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Credit Score, the magic number that decides the fate of a loan or credit card application, had not been accessible to borrowers until recent times. The Al Etihad Credit Bureau (AECB), which began its operations 4 years back, has been filling this gap and started providing credit reports to customers. From serving 200 customers a month initially, the Bureau now fulfils 200 requests in just a day! Perplexed customers who face application rejections have turned to the AECB to know the reasons behind it. Acknowledging the ever-increasing demand for Credit Reports, the AECB has introduced its online services and mobile application since October 2018. Here are some highlights about the mobile application.

  • The current version (1.1) of the application, which was last updated on November 1st , is available on App store for IOS devices and play store for Android devices (version 4.1 and up)

  • To avail the facilities of the App, you have to follow the steps as outlined below.

    • Choose the type of report you want to buy (Credit Score, Credit Report with Score or Credit Report)

    • Register – Fill in the application form with personal details. Emirates ID is mandatory.

    • Answer security and Authentication questions.

    • Complete payment using credit or debit card.

    • You will receive the report/score within 30 minutes.

  • The application provides 3 types of services:

    • Credit Score: It is a 3-digit number (ranging from 300 to 900) that predicts the likelihood of you making your credit card or loan payments on time. A low score indicates high risk while a high score indicates low risk. It is calculated based on information from various sources such as Banks, Finance companies and Telecom Companies. The credit score is dynamic and varies according to your payment behaviour. Missing or delaying payment beyond due date, frequent usage of all limits on your credit card, carrying multiple credit cards, all of these would result in a low credit score.

    • Credit Report with Credit Score: The credit report is a detailed list that contains section-wise information as given below:

      • Section 1: Personal Information, such as personal identity info, address, employment details, income (if available) and credit score.

      • Section 2: No. of credit facilities availed, total exposure, percentage of credit limit utilization, worst payment delay, oldest contract start date, Summary of active credit facilities, total monthly instalments and total outstanding balance.

      • Section 3: Loan number, type of contract, provider number, start date, date last updated, Credit Bureau contract ID, A chronological table that shows payment history with colour codes (Green – Good, Yellow – delayed payment upto 90 days, red – payment delayed by more than 90 days). For credit cards, information such as credit card contract id, provider number, credit limit, maximum overdue amount and maximum days of payment delay will be displayed.

      • Section 4: Status of new applications for credit cards, application id, type of facility, total amount, no. of instalments. Etc.

    • Credit Report without score: This facility provides you with the same information as above, excluding the credit score.

  • Charges: The 3 facilities offered by the AECB app is considerably cheaper compared to the charges for the same when approached through one of the two customer happiness centres in UAE (Abu Dhabi and Dubai) . The charges are as given below.

    • Credit Report with score: AED 126

    • Credit Report only: AED 84

    • Credit Score: AED 52.50

The same services would have cost you AED 150, 100 and 60 respectively, if you had visited the AECB offices.

  • Data Correction: You can submit in-app requests to make corrections to any of the wrongly reported information from the reports. You can do this by sending a message that contains a subject, data provider and corrected information.

Armed with the Credit report or scores from the AECB app, you can approach suitable Personal/Home loan or credit card providers. Make timely payments and reduce your number of obligations to avoid loan/credit card application rejections. In the future, the AECB aims to include information from utilities, government agencies, courts and real estate, to gauge your repayment abilities more precisely. Make wise financial decisions for the future with the all new AECB app.

Factors impacting car insurance premiums?

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Ever wondered why your friend who owns the same car as you does not pay a similar car insurance premium? It is because Insurance providers consider a whole lot of factors before zeroing in on an insurance plan apt for your car. A list of major factors contributing to your insurance premiums is listed below.

  • Age/Marital status: Unfortunately for young and single people, statistical observations show that there is a high correlation between age and marital status of the driver to the frequency of probable accidents. Mature men and women drivers have an established experience of driving safely, as opposed to young inexperienced drivers often driving frivolously. It has been often observed that the young adults under the age of 25 tend to pay 15-20 % more car insurance premium than their older counterparts.

  • Driving history: If a person’s driving record is peppered with traffic violations, parking tickets or accidents, then in those cases insurance providers take due note of these happenings and quote a higher insurance premium. On the contrary if a driver maintains a spotless record, then he/she might be eligible for a lower premium. Furthermore, elongated periods of un-eventful driving might even earn the driver a no-claim bonus, whereby a driver gets a discount in future premiums for not having made any insurance claims.

  • Type of Policy: The terms of an insurance policy can also greatly affect the premiums to be paid. For instance, if you already have another policy in place for personal accident insurance, then you might skip the share of car insurance premium designated for personal insurance cover. Another term influencing insurance premium is ‘deductible’, which is a certain share of amount an insurance holder should pay out of his own pocket before he/she can claim the rest of the expenses for repair from the insurer. If the deductible you agreed upon is ‘nil’, then you might end up paying higher premiums. On the other hand, the premiums might be lower if you agree to allocate a certain amount for deductibles. Some policy might also have add-ons like international coverage. If you do not plan to drive out of the country, then you might give this add-on a miss, thereby incurring lesser premium charges.

  • Car model/make: The model and make of a car definitely influences the charges for insurance. A swanky speedster or a luxury car would have higher premiums as opposed to a family SUV. The spare parts for the former might be difficult in procuring, thereby increasing repair costs. Studies show that high-performance muscle cars are at higher risk of being involved in an accident, thus resulting in costlier premiums. Very old cars also attract higher premium charges as they are prone to improper functioning and might result in accidents. The in-built safety features, engine type, fuel type, tra​_nsmission and other such features are also considered while establishing a score for your car.

  • Frequent insurance claims: If you make frequent claims, you will not only miss out on the ‘no-claim’ bonus, but also end up paying increased premium charges upon insurance renewal. Therefore, it is wise to pay yourself for small repairs and fixes, and keep insurance-claims only to major expenses.

  • Credit scores and reports: Although in its nascent stage, authorities are pushing for Credit scores to have some bearing on your car insurance premium. You can read the article How to improve my credit rating to manage your ratings well and thus avoid circumstances for increased premium charges.

  • Multiple quotes for insurance: You might end up choosing the first insurance provider without consulting others. As a result, you’ll miss out on great plans and ones that offer best value for money. Therefore, it is best to have multiple quotes and compare policy features before selecting one.

Consider all the above factors while making a decision on your car insurance. Choose wisely and travel safely.

Dubai Shopping Festival: A Sneak Peek

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It’s that time of the year again! The latest edition of the world-renowned Dubai Shopping Festival, more popularly known as DSF is just around the corner. The month-long shopping and entertainment extravaganza is all set to kick-off on the 26th of December. Dubai will come to life with pop-up fashion shows, glittering fireworks, incredible mega sales, concerts and much more. Here’s a sneak peek into what you can expect as part of the festivities.

  • Sale Season: The five-week sale would feature over 700 brands showcasing their goods across over 3,200 outlets. The highly anticipated 12-hour long sale in Majid Al Futtaim malls will commence on the 26th of December at noon. With shops open till midnight, you will still have plenty of time after work to catch up with what’s on display. Top brands will be offering discounts ranging from 25 to 90 percent, exclusive offers and much more at their retail outlets. Keep your eyes and ears wide open as every weekend of the festival will get even more exciting with ‘Weekend Deals’ that will be announced by retailers just 24 hours prior to its commencement.

  • Market OTB: This edition of the DSF marks the fifth appearance of the “Market Outside the box” element. If you’re not a fan of ‘big’ brands and you’d rather admire the work of lesser known artisans and emerging brands, then the Market OTB which will be held at Burj Park is a place you should most definitely visit. You can drop-by not just for a bit of shopping but also to entertain yourself with some live performances in music, drama, dance, magic and so on. You can also catch up with some of the latest cinema and creative documentaries in pop-up cinemas. And don’t forget to bring your kids along too – there will be joy-rides, games and other activities that the tiny-tots in your family would find most enjoyable. Any shopping outing would be incomplete without some delicious food. Market OTB will be dotted with food trucks and eateries to serve your taste buds.

  • Prize contests: A wide array of exciting raffles are coming your way this DSF. Participate in mega raffles organized by noted brands such as the one by Infiniti. Buy one ticket worth AED 200 and if “luck” favours you, you might have a chance of winning the weekly prize of AED 20,000! Weekly winners then compete for a mega prize of, hold your breath, AED 500,000! There is also a contest organized by Nissan where you get a chance to drive away one of 7 Nissan flagship cars by making a non-fuel purchase of AED 20 at ENOC or EPPCO stations. Exciting, isn’t it?

  • Fireworks: The skies of Dubai are all set to be gloriously lit up again during this DSF. Every weekend during the month-long festival, there will be firework displays at various places such as The Global Village, The Beach at JBR and Dubai Creek. As this year’s DSF runs through the New Year’s eve, the occasion would be made all the more special. Come witness an explosion of bright colours against the beautiful night sky of Dubai!

  • Global Village Attractions: Global Village, the world’s leading multicultural festival park and a major entertainment & shopping hub will be playing host to over 3,500 shops through its 27 pavilions this December. The village will also provide a rich cultural experience as 75 unique cultures will be represented. Super-loop stunt shows, live concerts, cultural shows, circuses, themed food kiosks, thrill rides – the list is endless.

So make the most of the 24th edition of the Dubai Shopping Festival that features a wide array of family friendly events and retail bonanzas. Indulge yourself and ring in the New Year with happiness and joy.

Digital Banks – The Future is here!

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The digital revolution has given a face-lift to all types of industries around us. So, it’s not really surprising that the Banking and Financial Sector has also risen to the occasion and revamped the way it operates. Banks across the UAE have been moving towards offering almost all of their services online. They have been investing heavily in technology to provide a better customer experience and to also reduce costs. As a result, in the near future, most of the brick and mortar offices of banks will be replaced by virtual ones in the digital space. This is a win-win situation for both customers and the banks. Read on to find out how banking of the future will benefit one and all.

  • Ease of Onboarding: You can now open an online account instantly in a completely paper-free environment. There is no need whatsoever for you to visit a branch. All you have to do is scan your Emirates ID and upload it to the app. Upon verification, within 24 hours your account will be opened and you will receive your debit card, chequebook and credit card by post, based on real-time credit bureau information. Accounts can be opened 24/7 from even the remotest part of the country.

  • Accessibility: Start banking with Digital banks that provide seamless, convenient, secured and cost-effective banking services. You can now pay bills, receive funds, check balances and perform other activities instantly through your smartphone anywhere and everywhere – on the go, instead of going to the bank every time you wish to do so. In case of your card being lost, you can secure it by simply toggling between the “off” and “on” mode for the card from your app.

  • Transfer funds: Easily scan details on your debit card from other banks and transfer funds into your digital account linked with the app at low charges. You can also make international transfers from your banking app for as low as AED 4 (ENBD liv).

  • Bill Splits: As a consumer, we rarely carry the correct change or physical cash to pay one another. With Digital Banking, you can split bills with your friends with ease. Pay from your app after which you can send automated notifications to your friends through social channels (such as Facebook and Whatsapp). An open list of people who owe you money will be maintained and once they’ve repaid you, their names will be crossed off. No more awkward conversations on how much you’re owed!

  • Exclusive services, products and offers: With certain digital banking services, doors will be opened to investment opportunities such as international stocks, gold and foreign currencies. Banks have also been promoting their digital platforms through incredible offers which you can cash in on. For instance, ADCB bank offers 17,000 touchpoints when you open your online account. Rewards with a cashback of up to AED 350 on your first credit card statement are also up for grabs. ENBD liv has recently offered a contest where maximum engagement with the app could win you a TESLA car!

  • Enhanced customer service: No more waiting in queues to meet your branch manager or a bank teller. Digital banks assist you with video interactions through a virtual relationship officer. You could also engage in an AI-enabled live chat session and get resolutions to your queries.

  • Smart Kiosks: Malls and shopping complexes across UAE are also being installed with Smart Kiosks, through which you can engage physically with automated devices of your bank. You could print cheques (limited to 6 a month), deposit cash into your account, replace debit cards, print account statements (albeit without a stamp) and much more.

  • Perspective: You can get personal insights into where you spend and how frequently. Easily track and compare your expenses over months, merchants or categories. The apps provide you with real time analytics with insights on transactional history and spending patterns.

By now you might have a fair idea as to how much digitisation of banks would help you as a customer. Prepare to empower yourself with an enriched and sophisticated banking experience like never before. Bid adieu to long waiting hours in bank offices and embrace smart digital banking options. Welcome to the new age of ‘digital’ banking!

Smart Payment Technologies: Google pay, Google Wallet, Samsung Pay etc., …what’s the big deal? Find out…

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Through the years, the modes of payment that we use to make our purchases has evolved. From copper coins to printed notes to plastic cards, and now most recently, “mobile wallets”, technology has constantly redefined the way we shop. Each of these modes has outstripped its predecessor by overcoming its downsides. Let’s have a look at the how the most recent development, smart payment technology, is going to revolutionize this domain.

How does it work?

Although there are a host of technologies involved in the background to facilitate smartphone-enabled payments, the ease with which you, as a user, can quickly onboard on to this platform and start making purchases is quite straightforward. Below are the steps for you to get started:

  • Download the payment application, such as Google Pay, Samsung pay etc. for Android devices, or Apple pay for iPhones.

  • Manually enter information about your credit card(s) or debit card(s) of participating issuers/banks in the app.

  • Set a PIN, or in some cases, where supported by the device, use your fingerprint or iris scanner to make your application secure.

  • With this, you are on your way to making your first contactless payment for your next purchase. All you have to do is tap your device on the point-of-sale terminal at your retail outlet and voila, you have just “smartly paid” your bill!

Advantages

So how would owning a mobile wallet benefit you? Read on…

  • Convenience: There is no more a need for you to scramble through your wallets for coins or notes, swipe your card, provide a signature etc. Just one tap and you can quickly checkout and walk away with your purchase.

  • Security: Your hard-earned money is as secure in your mobile wallet than anywhere else. Back in the day, if you lost your wallet or if it was stolen, not only did you lose cash but you also ran the risk of having your credit cards swiped for a huge sum by a miscreant. With a smartphone, even if you lose the phone, no one can access your mobile wallet without your PIN or biometric information. Your card information is encrypted and stored separately in a secure data-vault.

  • Privacy: Your mobile wallets do not know what you purchased or paid for; the transactions are only between you and the merchant establishment. Your credit card number, CVV and other information is never shared with the merchant establishment. The mobile wallet uses a “token” as stand-in information and each transaction is combined with this token and a one-time security code (more like a virtual account number).

  • Other Benefits: You can pay all your bills from your wallet with just one touch, be it mobile post-paid, electricity, water bills, telecom, and so on. Some digital wallets also offer you exciting reward points and loyalty benefits to encourage usage. Also, a majority of wallets can help you split your bills with your friends the next time you are at a restaurant. You can also get customized reports on your spending habits from your wallet and make better budgets.

Disadvantages

As always, there are two sides to a coin. While there is a lot of value you can get by using digital wallets, there are also a few downsides which you must be aware of:

  • Smartphone dependency: If you lose your phone or your battery dies out, you cannot make payments.

  • Limited Retail Support: It is important to note that Smart payment is an emerging technology and therefore, only a handful of retail outlets support it currently. Apple pay, a widely accepted payment in North America is still at its early stages as only 36% percent of retail outlets support it. Some retail outlets are also wallet-sensitive, like in the case of Walmart which accepts only payments from the Walmart-pay app.

  • Other downsides: In developing countries, poor internet infrastructure can cause you hassles while making payments. Smartphones (and particularly ones that support “Near Field Communication” required for smart payments) are not ubiquitous.

Cashless payments is a top government priority in UAE. From being a cash-based economy, the country is moving leaps and bounds towards being a cashless economy. This is currently driven by aggressive credit card marketing leading the shift to plastic money. Samsung Pay, Apple pay, Citi pay, Payit by FGB, NBD Pay, Beam are a few popular digital wallets available in the UAE.

It’s only a matter of time before digital payments becomes mainstream. Ride the digital wave and get yourself a mobile wallet (if you don’t already have one)!

Personal Loans without Salary transfer & Easy documentation

5 hacks you must know to choose the best Personal Loan (without a salary transfer).

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While the first and the best solution is always go for a Salary transfer loans, there are situations where in one might have to look at a Personal Loan which does not require a Salarty transfer. Some of the reasons might be.

1)A second loan while a Salary Transfer Loan is still being serviced.

2) Company is not listed for a Salary Transfer loan and hence non Salary transfer loan.

In this topic, let us understand the key elements which need to be considered while choosing a Personal Loan in UAE without a Salary Transfer requriement.

A Personal loan is an unsecured loan which simply means that the borrower is typically not required to provide any collateral for the amount that is being borrowed. These loans have the advantage of lesser paperwork involved and thus a lesser processing time. Though personal loans are easily available, they generally carry a higher ate of interest than a Salary Transfer Loan.

UAE banks offer personal loan facility to customers and the ease of availing such a loan can be as early as 2 hours to 5 working days from an application processing perspective.

So here are 5 hacks that you must know in order to choose the best personal loan.

  1. Right Tenure : It is important to choose a tenure of repayment that would be just fine considering your monthly budget. A longer period of repayment might mean lower EMI. At first sight, this might seem very tempting. But in reality, you might end up paying a lot more in the long run than you bargained for. Let’s say you apply for a loan for AED 50,000 at 6.5% interest rate for 1 year. The interest that you need to pay would be AED 1782, whereas it would be AED 3458 for a 2 year loan period. The difference between these two interests, which is AED 1676, is quite significant. Though the EMI might seem to be attractively lower for the 2-year period, the Interest paid might make you rethink your decision.

              

  1. Borrow what you can repay: Some banks may offer you a loan amount that is more than what you require at the moment. This might be appealing as you might want to set aside this for some other expenses. But it is only advisable to borrow the amount that you might need. You might be also currently making payments towards other borrowed loans. In such a case, you should ensure that the total EMI outflow for all loans combined is not more than 50-60% of your total monthly income.

  2. Charges – Know the costs: The interest rate charges should not be the sole factor while choosing between loans offered by multiple banks. Loan origination fees, application fees, late payment fees, fore closure fees and other charges should also be taken into account. For instance if you have excess funds with you and are considering a fore-closure, a bank which charges low or no penalty for the foreclosue would be beneficial. Processing fees is another charge that you should keep in mind ( usually at 2-3 %)

  3. Credit Rating: A credit score, also known as the credit rating that is given by banks for your profile is based on the repayment history of loans previously taken, monthly income and other such factors. UAE uses Al Etihad Credit Bureau. You can get a copy of your credit report by visiting one of the Customer Happiness Centers by providing an Original Emirates ID card and passport copy. There is a nominal charge for the issuance of the report. For locations please visit Al Etihad Credit bureau website. Read our blogbuster “How to improve my credit rating”. The higher the score, the better the chances of the loan being sanctioned. The rate of interest and other charges also might vary depending on the score. It is thus critical that you keep a clean slate with no defaulted payments. You could also consider the credit history of a cosignee (such as your spouse’s) and jointly make an application for the loan. The Cosignee’s credit rating along with yours could improve chances of loan approval.

  4. Making the right choice: It may not be wise to accept the first choice of loan that you come across. It is important to shop around and find the best one that suits your need before signing on the dotted line. Consider the Interest rates, Early settlement fee, Minimum monthly salary required and other such factors of each of the available choices of loans and then make a decision. A comparison simluator such as the one shown below enables you to view the attributes of loans across multiple banks side by side and could consequently help you make a better judgement.

Personal loan might be an appealing quick fix while you are in need of some immediate cash. Therefore, it is only advisable to be aware of all terms and conditions of the agreement and make wise decisions so as to not choose one which weighs heavy on your shoulders.

As 2018 comes to an end, it’s time to review your wallet. Cashback, Travel or Reward Points, which credit card to choose? Here is our pick for you.

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While we are in the process of choosing a credit card, one of the dilemmas we face is in deciding which type of reward card to choose. This is a common concern especially in a market like the UAE which has more than 200 different type of credit cards.

After being in the consumer banking industry for more than a decade, I personally find this an interesting dilemma to deal with. Rewards as we all know are ways of creating loyalty by banks while encouraging higher spends on their credit cards. Why do banks reward credit card usage? The obvious reasons are to increase spend on their products while also building loyalty. Banks employ experts who work on creating reward programs to attract their customers. They identify what the customers need or value the most and design the reward programs accordingly.

Please note that we are not referring to the various features and benefits commonly offered on most credit cards. These benefits can include dining discounts, complimentary golf access, valet parking, fitness club membership and so on. Reward programs are almost standard across the UAE market while specific designs and constructs are customized by each bank. There are primarily three different types of rewards that customers can get in the UAE.

Cash back Credit Cards:

The most popular reward where customers receive a certain amount of cash back as a credit on the card based on their usage. The qualification and the reward rates may vary from card to card. This is very popular because it can be deemed to be a discount on the purchase. How does one go about identifying which is the best one?

It is important to understand that cashback rates can be different across different spend categories, there may be maximum usage caps to avail cashback, the methods of redemption may vary from fee waivers to automated statement credits and so on. Hence, it is not necessary that a credit card which offers a 2% cash back is better than one which offers 1.5%. You need to consider the following as well:

a. Does the credit card offer you the maximum rewards from a cash back perspective for ‘Your Customized’ spend, i.e. for the specific categories that YOU typically spend on?

b. How does the cash back redemption happen – is it automatic or does this need a call back or request has to be raised for fulfilment? Which credit card provides the most easy and convenient option?

c. Small print: Are there any usage caps? Are there any exclusions? Are there any specific merchant criteria? Are there any timelines? These are points to consider while choosing the best cash back credit card for you.

d. Other benefits: Does the card have the benefits that you might want -complimentary airport lounge access, movie tickets, golf offers, valet parking etc? Explore!

SoulWallet’s “Saving Simulator” tool uses a smart algorithm which can give you an excellent indication on which credit card gives you the maximum savings based on your individual customized spend.

Airmiles / Travel Credit Cards:

Did you know that 2/3rds of the world’s population lives within 8 hours and 1/3rd within 4 hours of the UAE (Source: Gulf News)? With an expat population of close to 80%, travel is not a luxury but indeed a necessity for all UAE residents. Thus, it is not surprising that travel credit cards are very popular among UAE residents. These cards are usually loaded with benefits such as complimentary airport lounge access, marhaba meet & greet services, travel insurance, hotel discounts, free flight tickets and many more features.

Travel reward credit cards give you miles or travel points based on your card usage. The benefits don’t end there as free checked bags or airline fee credits may also be a part of the rewards package. There are broadly two types of travel credit cards:

a. Co-branded Travel cards: generally these are linked with a specific airline and offer value miles which can be redeemed with a specific airline. For e.g. Emirates Skywards, Etihad Guest Airmiles and so on.
b. Bank-specific Airmiles cards: As a unique proposition offered by some banks where customers earn airmiles on their credit card spend which can then be redeemed with multiple airlines (based on the bank’s agreement with these airlines). The redemption rates may vary from one airline to another.

What are the key points to consider while choosing an Airmiles or a Travel Card?

a. Earn rate: In simple terms find out how much your spend is going to be rewarded in airmiles. For example, every USD of spend could earn you 1 Air mile.

b. Burn rate: How many miles do you need to spend to avail a free ticket or an upgrade? This might vary from bank to bank and might also include black out zones for booking with airlines.

c. Now the interesting question-do you get a joining bonus offer? There are several banks which offer irresistible joining bonus miles offers most of the time.

d. Is there a validity for these miles? In other words, do they expire if not redeemed within a specific period?

e. Benefits and Features: Does the card offer you benefits such as complimentary airport lounge access, airport pickup and drop, travel insurance, travel insurance certificates and so on. Do your research, compare all these options on the Soulwallet Credit Cards page and then make an informed decision.

Reward Points Cards:

These cards are popular among those who shop frequently. Banks offer reward points for spends incurred on their credit cards. These reward points can be redeemed in multiple ways including vouchers from your favourite malls or for purchasing, jewellery, holiday tours, electronics, beauty products and many more.

What are the key points to consider while choosing a Reward Points card?

a. Find out what is the worth of your spend from a reward point perspective i.e what is the value of 1 Reward point in AED?
b. Is there any expiry period for these points? If yes, what are the conditions?
c. Do the points get forfeited or lapsed in case payments are missed?
d. How can these points be redeemed? Is it an easy process or a complex one?
e. Does the reward card come with the required benefits as per your requirements?
f. Can you switch between different reward types?

While each of the above typesof credit cards (travel, cashback, reward points) caters to a specific need, it can also potentially be beneficial to have one of each type to maximise your savings and benefits. Provided one has a healthy credit score and manages credit card usage smartly and responsibly.

With 2018 coming to an end, it makes sense to review your wallet and see if you have the right credit card(s) for you. It only takes a few minutes to browse through the most suitable options on SoulWallet (www.soulwallet.com) and identify credit cards with the best savings for you using the “Savings Simulator”. After all, why say no to the idea of saving a few more valuable dirhams?

How to choose between Personal Loan & Salary Transfer Loan

How to choose between Personal Loan & Salary Transfer Loan

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Cash loans are a popular lending product in the UAE. These loans come in handy to service an immediate need which can be a purchase, holiday plan, school fee payment, medical expense not covered by insurance and so on. Cash loans offered by UAE banks can be classified into two categories.

a. Salary Transfer Loan: 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. These loans generally require the following eligibility criteria.

i. A Salary Transfer letter from the employer of the customer stating that Salary would be transferred to the bank along with certain other clauses as required by the respective bank. Your HR department can help you with issuing such letter.

ii. A minimum salary requirement which might differ from bank to bank. This generally starts from AED 5000.

iii. Security checks as required by the bank.

iv. Debt ratio including the new loan EMI should not exceed 50% of monthly income which is a simple calculation of your total financial monthly liabilities over monthly income.

v. All other eligibility criteria as applicable by the bank including a meeting with the borrower.

b. Personal Loan without a Salary Transfer: These loans are offered by banks without a need of having Salary transferred. Such loans are popular and can serve the purpose when one already has a Salary Transfer loan running with a bank. Interest rates are higher for such loans and the lending amount might be lower than a Salary Transfer loan.

It is important to understand the difference between the personal loan and the salary transfer loan before applying for a loan. Reaching out to your bank which holds your salary account and enquiring for a salary transfer loan should be your first option. However, there are banks in UAE which provide attractive interest rates and higher loan amounts for the personal loan without salary transfer. SoulWallet can help you compare and choose the best personal loan and salary transfer personal loan from banks across UAE. Also you can apply for loans online.

Here are the key points to consider while deciding upon a loan?

a. Am I getting the best interest rate?
Most banks offer interest rate based on a multiple criteria like your income range, employer, bureau score etc. These rates are generally available with the Sales Executive who reviews your application profile. Make sure you review the interest rates before signing up. High interest rate means higher EMI and longer repayment period.

b. Am I getting the loan amount to suit my need?
Different banks offer different loan amounts, generally a multiple of your monthly income. This obviously can be customized based on certain criteria as mentioned in the previous point.

c. Will borrowing a loan be a hassle free process?
Loan application processing might take anything from an hour to 5 working days. Ask whether the process is simple and hassle free as this is a key differentiator between the financial institutions.

d. Are there any Hidden Charges?
Review if there are any charges pertaining to loan processing, early repayment penalty, late
payment etc. Read the fine print. Or at least ask the Sales Executive. You can always go and check comparison sites like SoulWallet.

e. What are the Payment Options?
Understand the various payment options available to you. While a direct debit from your salary
account is a standard process, there might be situations one would need to make a payment
through alternate methods. These options must be easy and inexpensive.

f. Will Top-up loan be available?
Enquire on when one can avail a top up loan while servicing first loan. Some banks have a resting
period of 6 to 12 months from the time the first loan has been issued.

g. Will there be Statement and Email alerts?
How does one get reminders on payments and loan balance? Verify this as these are important to know while servicing a loan. In today’s forgetful and fast paced life, we tend to forget the payment date. Bank might charge a penalty for late payment.

h. Any Special Features?
Does the bank offer a flexible interest loan which can adjust over a period of time based on EIBOR (which is Emirates Inter Bank Offered Rate).

So Salary Transfer Loan or Personal Loan Offers. Choice should be yours.

How to choose the best credit card?

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A credit card is a very handy tool that makes life easy if managed smartly. It is also important that one understand how a credit card functions so that maximum benefits can be realized. Given the lifestyle demands, a credit card has become one of the most basic needs of any individual. And why not? If we are to analyze the uses of a credit card, we could end up counting the multiple benefits that it offers. Well, then the question shouldn’t be about whether at all we need a credit card or not. The right question should be how to choose the best credit card for ourselves.

By some estimates, there are more than 200 different credit cards in the UAE that caters to the diverse lifestyle and needs of the customer. The dilemma that one faces is- how to choose the best credit card? What is best for you may not be the same for me. When we are confronted with such relative and conditional situations, how do we determine what goes in favor of our best financial decisions?

Perhaps we can start by asking ourselves some basic questions. Before taking the plunge and narrowing down on the credit card, it is good to understand why we need it in the first place. The purpose of having a credit card varies from individual to individual. Some people may use credit cards to see them through a period of financial tight spot whereas some might use it to manage daily finances. For some people a credit card helps maintain cash flow. And no prizes for guessing that a credit card also simply enables us to indulge in opulence- whether occasionally or frequently depending upon the user.

Whatever are the reasons for expenditure, these tips must be considered before choosing the card that works best for you:

• Spending pattern – Even before we consider having a credit card, most of us already have a fair idea about our spending habits. What do we spend a lot on? Does planning a family holiday and spending on air tickets make a dent in our pockets or is it the paying of our kids’ school fees makes up for our biggest recurring expense? Sometimes events or entertainment can also count as our biggest spends and for some people expenses towards purchasing of grocery and utility are the heaviest. Hence, spending pattern is an important element while choosing the best card. There are various benefits offered by credit cards in the market which vary from a spend category perspective. For instance, one might get a higher loyalty reward (air miles, cashback, points etc.) on a certain spend.

• Annual fee: Depending on the card you choose you may have to pay an annual fee. Certain high-end cards offer additional benefits and their annual fees are also higher. You can weigh and decide if the benefits are worth the cost. However, there are some credit cards that don’t have an annual fee. Also, the bank will sometimes set a minimum amount for you to spend to remove the annual fee. You must enquire in details with the bank about the fees structure and terms.

• Instalment offers- To make the experience of owning a credit card more fruitful, a number of leading banks offer interest-free instalment schemes on purchases. Before purchasing an item, do some research to check which cards have the best instalment options. These installment plans make it easier for customers from a re-payment perspective. Most banks have attractive promotions interest rates for such installment plans.

• Benefits and rewards- There is no harm in being pleasantly surprised to learn about the benefits later but an informed choice can prove more advantageous. At the time of zeroing upon the credit card, enquire about the enjoyable aspects that your credit card offers you- the array of benefits and rewards. You can prefer to choose from a variety of cashback on purchases, movie ticket deals, air miles, discounts on school fees, dining discounts, complimentary valet parking and reward points redeemable on shopping or dining vouchers and retail merchandise. Some credit cards come with travel and lifestyle perks, such as airport lounge access, health club memberships and golf privileges to name a few. There is significant value in these benefits for customers and hence a detailed comparison of such rewards and benefits is key while choosing your next credit card.

• Incentives: Many banks offer reward programs on their credit cards and they don’t charge extra for the program. Now is that not a benefit to fall for? A program that offers flexibility of cash or travel and further gives rewards that are simple to redeem are the most beneficial. Be smart and cautious while choosing as these programs are subject to limits and conditions. It is also important to note that attractive rewards need not be the sole deciding factor, one must also review the process of redemption of such rewards. Automated redemption of rewards is a good point to look for while shopping for a credit card.

Islamic banks are Sharia-compliant so interest or profit is not charged on the outstanding amounts This might be an important factor to consider while choosing your credit card.

Looking up multiple banks’ website to know about credit card features is a thing of the past. SoulWallet collects and analyzes information about various credit cards – all in one website at your disposal. Afterall, one must always devote some time on research and verification to choose the best credit card.

How to improve my credit rating?

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Having a good credit score plays an important role in your financial life as this determines your credit worthiness. This helps the lender or the bank to assess the credit risk of a prospective customer by predicting their ability to repay the debt.

The 3 digit number that determines your credit score practically becomes your identity to the bank while you plan to borrow money. The credit score reflects the potential borrower’s past and present financial behavior which further helps the lender determine if you are a low credit or high credit risk customer. Having a low credit score has an impact on the application decision when it comes credit lines, loan amount etc. This could also make borrowing a difficult scenario in case you have an emergency financial requirement.

Building a good credit score takes time. It is important one understands what steps to take to maintain a healthy credit score. The Credit Bureau collects data on your financial history and scores you accordingly. In case of late payments on EMI or defaulting, the data gets recorded which eventually plays a negative role in your credit ratings. On the other hand, when a person has a good credit history, he might get rewarded by having to pay lower interest rates on loans.

As important it is to gain good credit, it is equally important to maintain it. Your credit score can manipulate certain situations in your life. As some potential employers may refer to it as an assessment metric and conclude if you are a right fit for the organization. Insurance companies also check the credit score as an indicator to set premium.

Amidst all the things that we need to worry about, how do Rating Agencies keep a check on our credit rating? It’s not all that difficult to attain.

Firstly, to understand your credit rating one must get a copy of their own credit report. The report gives an exhaustive picture of their credit history. It shows the payments made over the last two years plus any payments that are outstanding or overdue. One can also check for the records of any missed or defaulted payments in the past.

Having this report handy enables you to judge your expenditures and lets you decide where to draw a line. This way it becomes easier to manage finances and you can reduce or completely eliminate the act of defaulting to make your credit score better over a period of time.

Here are a couple of simple and easy steps you can take to maintain a good credit score and use it to your benefit:

1)  Timely payment– Missing or delaying a payment beyond the due date is a trigger for the rating agency to score you low. Sometimes you can be tempted to pay just the minimum amount due on your credit card as this is a temporary relief on your monthly financial obligation. This increases the length of time required to pay back the actual debt and may have implications on your credit score. Paying off a higher portion of your credit card debt will lower the debt burden ratio and eventually lead to improving the credit score. Banks feel assured that you can manage your money smartly and you appear to be less of a risk while borrowing money.

2)  Manage your credit cards well– it could be a great lifestyle statement to own several credit cards in your wallet with high credit limits. This can’t be termed a bad practice as it alone does not damage your credit score. What counts is the way you manage them and under what circumstances you obtain them. Multiple credit cards mean a higher sum of total credit limit and this goes towards adding to your debt ratio irrespective of outstanding balances. Cancellation of credit cards to avoid bad credit would not help because it shortens the credit history. Banks deduce you as a risky borrower when they are unable to see your long term credit history.

Keeping a good credit rating and maintaining it is not an unachievable feat. With good financial habits, one can achieve a high credit score. A good credit behavior is often a lifestyle choice. There is no formula.  But losing your financial health can set you back by a long margin. The journey to correct it can be a tedious and lengthy one. Being punctual with finances will yield a good credit rating score.

UAE uses Al Etihad Credit Bureau. You can get a copy of your credit report by visiting one of the Customer Happiness Centers by providing an Original Emirates ID card and passport copy. There is a nominal charge for the issuance of the report. For locations please visit Al Etihad Credit bureau website.