Personal Loans - SoulWallet

Credit cards need not be just fair weather friends!

Posted on May 7, 2020October 23, 2020 by admin

As we are in the thick of the COVID-19 pandemic, all of us in the UAE are taking a close look at our personal finances. Money can be tight—especially if we or a family member lost a job. These are uncertain times, and because of this, it can be helpful to think of ways to ease some of the financial pressures that we are experiencing.

One way to do this is through strategically using credit cards in UAE. The operative word, of course, is strategically. Used recklessly, credit cards can instill even more financial pain on your family. But if you carefully use some of the best cashback credit cards, you will find yourself with more hard-earned money in your pocket.

Tips on Strategically Using Credit Cards

Before describing some of the ways that credit cards can help you amidst this uncertainty, an important point must be made. That is the fact that all of these benefits and strategies are moot if you cannot make your monthly payments. Failing to make your monthly payments can result in onerous interest payments, which can be financially devastating. Even if there is a compelling signup incentive for one popular credit card or exciting purchase rewards for another, they will be for naught if you cannot pay off your bill. This is rule number one as you think about strategically using credit cards amidst COVID-19.

Now, onto the good news. Here are some of the many benefits that you can get if you strategically use credit cards:

Compelling credit card offers. There are plenty of credit cards out there today, including those from popular UAE banks, that offer terrific sign-up bonuses. All you’ll need to do is make a certain number of purchases within a specific timeframe to receive the bonus. For instance, with the FAB Cashback Credit Card, you can obtain AED 300 on your first retail transaction. You could theoretically make small purchases on this First Abu Dhabi Bank (FAB) Credit Cards and use your cashback reward for some other pressing purchases in your life.
Cash back rewards. Some of the best credit cards offer up to 5% cash back on certain purchases. You will want to read the fine print to determine which purchases qualify for some of the most compelling cashback offers. That said, every credit card awards you cash back or points, which can be used to redeem flights and more. To save money during this crisis, think about strategically using your cash back rewards. For instance, when you are grocery shopping, use the credit card that gives you the most cash back for your grocery purchases. Planning in advance can add some cash to your pocket.
Credit card offers with zero percent interest for an introductory period. Simply put, if you miss a payment during an initial zero-interest period, you won’t have to pay interest. These credit cards can be game-changers in paying down your principal, especially if you are pursuing a balance transfer. However, the introductory period doesn’t last forever. Typically, these credit cards will have a significant increase in your APR, so keep that in mind if you leverage this strategy.
Insurance benefits. Credit cards can go a long way in protecting you from fraud. Compared to making purchases through a debit card, it is much easier to dispute and remove unauthorized charges. No one ever likes being a victim of fraud, but the pain can be especially stark in this period of uncertainty. Ultimately, credit cards can remove some of that uncertainty by protecting your account from unauthorized purchases and other types of fraud.
Credit shields. Credit cards can also be helpful if they offer so-called credit shields. Credit shields are programs where you can pay a monthly fee now in exchange for future leniency if you’re unable to pay off your credit card. For instance, if you later lose your job due to COVID-19, you may be able to suspend payments and interest, keep your account in good standing in the eyes of credit bureaus, or only make minimum monthly payments. These benefits, to put it lightly, can provide an immense amount of financial relief.
Return protection. In this time of uncertainty, return protection can offer you some added flexibility. Essentially, it gives you extra time to return new items that you don’t want to keep. Even though a store may reject your return for not being timely, your credit card may be able to reimburse you for your purchase. For this benefit, you’ll definitely want to read the fine print. Assuming your credit card offers it, however, it can be a way to get some cash for purchases you intended to return.
Free credit score information. In these challenging and uncertain times, it is important to maintain a good credit score. That said, checking your credit score can be complicated. Generally speaking, it costs money to check your score. Some credit cards, however, offer this service for free, allowing you to skip these fees and get a granular look at your financial health. While the fee may not be too onerous, every dirham saved is valuable.
Tracking your payments. While it may not be the most exciting task, tracking your credit card purchases can be extremely insightful. You can get a granular look at your spending habits and cut back as necessary. Strategically using credit cards is all about building smart habits, so create a weekly (or monthly) practice of examining your charges. It can be extremely insightful.

Taking Control of Unique Opportunities

Credit cards can be terrific tools to build financial wealth—so long as you use them responsibly. You’ll need to be disciplined and vigilant, whether you just signed up for a popular credit card for its signup bonus or took on a zero-interest credit card for a balance transfer.

But having said this, it isn’t an impossible task. By being responsible, you can have access to a swath of rewards and cold, hard cash. Even amidst a global pandemic, this is an outstanding time to take advantage of everything that credit cards have to offer.

Soulwallet is a personal finance comparison portal in the UAE. With a team of “out of the box” thinkers and a deep understanding of the UAE consumer banking industry, we help customers make the best choices while shopping for financial products such as credit cards and personal loans in UAE.

Why You Should Use Comparison Websites Before Signing Up for a Credit Card?

Posted on March 27, 2020October 23, 2020 by admin

Whether you have great credit or are working hard to improve your credit score, you undoubtedly receive plenty of credit card information or application forms in the UAE. The potential offers and rewards are often extremely compelling, whether it is extra points for eating at your favorite restaurant or travel deals that are only available to certain cardholders. Credit cards also have many different terms, and these terms can become all too real if you are behind on a payment.

Therefore, when analyzing which credit cards in UAE to pursue, it is helpful to compare all of the offers that are available to you. This is much easier said than done. However, You may find yourself placing pieces of paper side-to-side or simply choosing a credit card that your friend or sibling likes.

Luckily, there is a better way. We believe that comparison websites are a true game-changer when signing up for a credit card. These websites make it extremely easy to compare different types of credit cards, thereby making it more obvious to you when making your final decision. Everyone from the first-time credit card holder to more experienced borrowers can find immense value from credit card comparison websites.

Below, you will find several key reasons why these websites are so important in today’s financial environment.

A Clean User Interface

As referenced above, credit card comparison websites make it easier and enjoyable to compare different credit card offers. Many websites, in fact, let you place credit cards side-to-side. They make it seamless for you to compare cards’ interest rates, annual fees, join fees, and more. This side-by-side layout is more effective than you may think, as it quickly gets to the crux of why certain cards are better for you than others. Instead of spending hours sifting through the paperwork and comparing the fine print, you can get a great first glance through credit card comparison websites.

Opening Your Eyes to New Opportunities

Credit card comparison websites aren’t just for comparing credit cards that you are considering. Arguably just as valuable (or even more valuable) is the fact that you can use them to discover new credit cards. For instance, if your most important factor is a low interest rate, you may use a credit card comparison tool to find a low-interest card that you haven’t even considered yet. This is just one simple example, but the discovery nature of credit card comparison websites makes them attractive to credit card applicants.

Helping You Maximize Your Points

In the example above, we explained how credit card comparison websites can help you find low interest card cards, thereby saving you cash if you end up making a late payment. But the flip side to this, however, is that credit card comparison websites can help you maximize potential incentives. If you enjoy traveling, for instance, you can find a new credit card that caters to travelers. Moreover, the website will help you understand how you can maximize your points so that you can rack up free flights or vacations. To put it another way, these websites are your trusted guide to get the most value out of a potential credit card.

A Godsend if You Have Bad Credit

Finally, credit card comparison websites can be especially helpful if you have bad credit and are looking for a new credit card. Repairing or strengthening a credit score is always time-intensive. That said, this shouldn’t mean that you can’t find a great credit card now. Credit card comparison websites can help you with this task. They can highlight some of the most attractive options for you—considering your financial situation.

Your Secret Weapon

These are just several key reasons why credit card comparison websites are so powerful. They are simple and easy-to-use, yet extremely powerful. They can help you stumble upon key insights about your spending goals and budget. They can even be a massive assistance in helping you more quickly save up for your dream vacation.

Whatever the case may be, we encourage you to check out these websites. Spend some time reviewing both the websites themselves and the credit cards that they let you compare. In sum, we believe that credit card comparison websites can be your secret weapon as you work toward achieving all of your financial goals.

Maintaining a Good Credit History: Some Helpful Tips and Strategies

Posted on March 3, 2020December 7, 2020 by admin

Whether you are seeking personal loans to pay off outstanding debt or simply want to obtain some new credit cards, one of the first things that lenders will do is check your credit history. Your credit score, as calculated by the AECB (Al Etihad Credit Bureau), is essentially a profile of your financial health. It is something that lenders in the UAE closely scrutinize before deciding to extend you credit.

Because of this, it is extremely important to maintain a good credit history. Doing so will make it much easier to get access to some of the best credit cards in the UAE today. Having a poor credit history, however, will make it much harder to accomplish your financial goals.

In this post, we want to share several important tips and strategies on how you can maintain a good credit history. Following some (or all) of these tips, you’ll drastically increase your chances of avoiding any unpleasant surprises and increase the chances of getting the loan or credit card that you desire.

Ways to Maintain Your Credit History

To start, one of the best ways to maintain your credit history is to pay your bills on time. It’s simple enough. If you are a borrower that doesn’t skip or delay payments, banks and other financial institutions will view you as more creditworthy. They will have the confidence that you will make your required payments for your loans and credit cards, thereby extending you more credit than others. On the opposite side, making late payments not only costs you in interest or other penalties, but it hurts your credit score. From there, a lower credit score hurts your chances of qualifying for some of the best credit cards or future personal loans.

Along with paying your bills on time, seriously consider paying off your credit cards in full. This is a great tactic both for the health of your pocketbook and the health of your credit history. Paying off your balance in full helps you avoid interest payments, which can become substantial if you are solely paying the minimum required payment on your credit card. But not only that, paying off your entire balance, once again, shows financial institutions and the AECB that you are a responsible borrower. Your credit score will rise and you’ll be more likely to receive even more generous credit terms in the future.

So one significant part of maintaining your credit history is to be on top of your payments. But that said, another key area centers on credit utilization. By this, we mean responsibly using the credit that has been provided to you. Just because your credit card has a credit limit of Dh100,000, for instance, does not mean that you should draw upon all of that credit. Instead, the general rule of thumb is that you should use only 30 percent of that credit limit. While it isn’t the worst thing in the world if you go above that guideline, you should tread lightly. It may put you at greater risk of being unable to pay off your credit card in full.

Finally, don’t apply for loans that you don’t need. If you already have great credit, it is all too tempting to apply for a wide range of loans. You may use those loans to get a more luxurious car or to splurge on something for your home. Whatever item or experience that you want, it is much safer to fund it through your day-to-day savings and cash flow rather than a loan. Yes, it may take longer to find the funds to make the purchase. However, foregoing a loan that you don’t actually need minimizes the potential hit to your credit score. To put it another way, it is an investment in your long-term financial future.

Get Started Today

Obtaining and maintaining a good credit history is an ongoing task. That said, it is certainly doable. Following the tips and strategies above can help you fortify that credit history, allowing you to obtain the best credit cards and personal loans in the future. By staying disciplined and on top of your pending payments, you will be setting yourself up for continued financial success.

Smart Money Moves for a Financially Healthy 2020

Posted on February 3, 2020December 7, 2020 by admin

Planning to set your financial goals right at the beginning of the year is a great way to start in 2020.

Review your financial position, check where your money goes, review your debt, cut down on extra expenses and plan efficiently. This will help you stay on savings course and prevents you from getting into any money hurdles.

Here are a few ways to help you do that:

1: Revisit your mortgage loans.

Home loans are one of the biggest financial responsibilities that require regular revisits. Look for better options to save your money or get other benefits when there is a change in your financial situations, bank’s loan terms or interest rates.

Check if refinancing can help you save money. Compare your loan interest rates with the current rates because even half of a percentage point drop will give you substantial savings.

Lower interest rates help in reducing your mortgage term because here you can raise your monthly payments and prepare to clear the loan early. For example, paying off the loan in 10 years instead of 20 years offers great savings incentive to the homebuyer.

2. Get a personal loan

A personal loan is a viable money-saving solution in many situations when you borrow it for the right reasons. With personal loans, you can settle higher interest loans, create a good credit score, pay off credit cards or consolidate debts with more manageable fixed EMIs.

For instance, when you want to consolidate debts on your different credit cards, taking a personal loan can help pay off all the charges in one monthly payment. You benefit from lower loan interest rate compared to the annual percentage rates (APRs) on your credit cards.

However, before taking a loan, calculate your repayment capacity using an online app, select repayment tenure that is within your reach and carefully review all the fine print.

3. Select the right credit card

A properly selected card can help you make savings on purchases, but the choice of the card should be based on your use and habits.

For instance, a frequent traveler will make savings when his card offers discounts and rewards on air tickets, hotels or lounge access.

The choice of the card also depends on whether you carry a balance each month or pay off dues before time. When you take forward a balance on credit, select a card that has a low annual percentage rate (APR).

Knowing your credit scores always helps you to apply for a card that is more likely to get approved. Lastly, compare the annual savings you make on the card against the card’s annual fee to see if it is right for you.

4. Find a balance transfer scheme

A balance transfer can help you make substantial money savings. Transferring high-interest debt from credit cards or loan to a card with a lower interest rate gives saving on interest and helps in clearing off the debt faster.

However, check if any balance transfer fee is levied to carry the balance to your new card. Another critical factor is the new card APR rate; check the introductory APR offer and price after the promotional period ends.

Always evaluate the terms carefully and put a debt repayment plan in place. Remember your debt doesn’t disappear when you do a balance transfer, but effective planning can help make good money savings.

5. Work out your monthly budget

Make a note of your cash flows to curb all unnecessary spending. Different apps come as a handy tool to do all the calculations for you.

Feed-in your monthly income and your expenses and the app will give you a clear picture of how to plan yourself well.

These tools help you consolidate all your bills, track the spending pattern and get an alert message when the due date of any statement is nearby to avoid late fees. Money management is a vital step to rein spending and get finances under control.

6. Review your subscriptions

If you are a Netflix and Amazon Prime addict, ask yourself if you need all these subscriptions and if you have the time to watch them?

Most people pay more on subscribing too many services but hardly use that entertainment and reading channels they have.

It’s the time to evaluate the spare time you have at hand to use these services and the cost you are spending monthly on subscribing to these. This helps you track the service you can do without and make money savings.

Besides entertainment, your current telephone and mobile plan also needs to be reviewed. Check your bills to study your usage patterns. If you are not using the full service, try considering another package. And if you are paying extra after the service amount, see if you can sign up to a new scheme that serves best to your needs.

Top 4 tips to consider while looking for Personal Loans

Posted on January 5, 2020December 8, 2020 by admin

UAE Residents have several options to finance purchases or to meet certain expenses. Savings is probably the best option to start with, but for those who are on tight budgets there are other options such as Credit Cards and Personal loans in Dubai, UAE. While there are several other options which are mushrooming across the globe for instance, peer to peer lending and alternate finance, the most prominent and favoured one is the Personal loan which has several advantages over the rest. UAE banks offer personal loans up to AED 1 Million based on several qualifying factors.

Personal loans are generally preferred due to the following reasons:

Easy to avail – Simple and easy documentation. Most banks don’t even need a bank statement these days as they would be able to verify your salary details from your bank thorugh your IBAN, of course based on your authorization.
Short term generally – Payback period can generally be as short as 1 year
With or Without Salary transfer
No collateral required
Clear visibility on interest that one would end up paying for the entire loan availed.

This article primarily focuses on certain key aspects of personal loans that one should be aware of prior to signing on the dotted line-

1. Compare Personal Loans

It is important that one is aware of the various loans available in the market. UAE banks offer personal loans both with and without salary transfer. The ones without salary transfer, loans are offered on higher interest rate than the ones with a salary transfer. To compare loans, best places to refer are the comparison sites which are a one stop place to do research prior to signing up.

Make sure you do the math, refer to the interest rates, fees and processing charges. You can compare personal loans offered by UAE banks here

2. With or Without Salary Transfer?

It is always wise to take a personal loan with a salary transfer as the interest rates are as low as 5%. However, you will have to also check with your HR if they are fine in transferring salary to the bank of your choice. Normally, HR has a tie up with certain banks for processing salaries and the best place to start would be to identify the banks from your HR.

A salary transfer loan would need a letter from your HR in the format as specified by the bank. A personal loan without a salary transfer is recommended as a second loan or when someone is not eligible for a top up loan on their current salary transfer loan. This type of loan does not require a salary transfer letter from your HR but might need just a salary certificate.

3. Credit History dictates your loan interest rate or cost to borrow

Most of the banks in UAE have moved to a credit score / credit history-based interest rate. A high credit score would mean a lower interest rate.

Please refer to the article to learn about credit history and how to maintain a health credit score

4. Other eligibility criteria

Apart from credit bureau, banks also look at:

Work information: Employer, Designation, Years in Work, Fixed and Variable income

Debt Burden: Percentage of liabilities (financial obligations one owes on a monthly basis like Loan EMIs, minimum dues on credit cards etc.,) against total fixed salary. The general condition is including the new loan EMI debt burden should be less than 50%.

Takeaway

Personal Loans are a convenient and popular method for purchasing products or services. Soulwallet recommends customers to make sure if there is a real need for a loan as any sort of debt must be avoided if possible. Having said that personal loans are also a simple and easy to avail with many banks in UAE moving to digital channels.

As a personal finance aggregator Soulwallet has analysed various personal loan features. For more details visit us on personal loan in UAE page.

Good Credit Score Means Good Financial Health – Understanding How Credit Score Works can Help You Save Thousands of Dirhams

Posted on November 12, 2019December 8, 2020 by admin

Credit reports and scores are essential to financial health of any economy. Its primary use is to help financial institutions use the information provided in the report to assess the credit standing of an individual prior to issuing individuals any credit products (credit cards, personal loans and so on).

Al Etihad Credit Bureau is the entity which provides credit reports to consumers and financial institutions in the UAE.

As an individual it is beneficial to have a good credit score as this will not only ensure that your chances of getting a credit card or loan (personal loan, auto loan, home loan) etc. are increased but, almost more importantly can help you save money as banks frequently give better terms (lower interest rates, higher loan amounts etc.) to individuals with better credit scores.

In this article we will help you better understand credit reports.

Components of a Credit Report

Financial Liabilities – Financial institutions are required to provide details of credit facilities such as credit cards, personal loans, mortgage loans etc., to the UAE Credit Bureau. Details such as assigned credit limits, utilized limits on credit cards, payments made, delayed payments, returned/bounced checks, loan amounts issued, outstanding balances, age of the loan/credit card, active status, police case history and so on are some of the key data points shared. In addition, the below details are also shared with the credit bureau:

Employment Details: Employer Name, Income, Date of Employment are a few details pertaining to employment

Addresses: Residence address, emirate, contact details including mobile numbers and email ids.

Personal Identification – Emirates Id number, Passport Number, Date of Birth etc.,

The Al Etihad Credit Bureau (AECB) manages the process of collating the information received from all financial institutions (as well as some other non-financial entities such as telecom and utilities providers) and summarizing this at an individual customer level.

These details are structured in a systematic and easily readable format which the financial institutions can access in assessing the credit worthiness of potential customers.

What is a credit score and why is it important?

Credit score is a three- digit number which is assigned by the credit bureau based on various variables such as number of loans, repayments, delayed payments, credit utilization and so on. Credit scores range from 300 to 900, higher the better from a financial health perspective.

The credit score is an indicator of a customer’s financial profile and it is important to note that quite a few banks have moved to offer credit score-based features (interest rate, loan amounts etc.) to their customers. This means you will get more beneficial terms the higher your credit score .

So, what is the mantra to maintain a healthy credit score?

Below are some simple disciplined practices one needs to follow:

Do not hold too many credit cards. Find out the best credit cards for “You” and stick with it. Close the ones which are not suitable for you or you carry but don’t use too often. Use Soulwallet’s “Best Fit Credit Cards Tool” to find out how good your credit card isyou’re your individual spend patterns and other requirements.
Ensure payments are made on time. And whenever possible, in full. This is the most important aspect and has a significant weightage in one’s score. Missing payments is a huge no-no and will definitely adversely impact your credit score. Remember the golden rule – “only borrow what you can afford to repay”!
Avoid going over the credit limiton your credit card.
Try and stay below 40% of your credit utilization. If you have a credit limit of AED 10,000 and your current credit card balance outstanding is AED 4,000, your utilization rate is 40%. The lower the better.
Keep copies of your bank clearance letters for records, there are possibilities that one might have to provide them to have the details amended (if they still show up on the credit report).

Please note – credit scores are not carved in stone, it is a dynamic and ever-changing variable, updated periodically when inputs are received from banks and financial institutions.

Credit scores take a significant time and effort to improve and, in this case, we would clearly recommend that prevention is better than cure.

How and where can I get my credit report?

For individuals the best recommended option is to download the AECB (Al Etihad credit bureau) app on the mobile phone via Google play or the IOS App store and download the report or score. Note, the charges are much lower to download the report online rather than by visiting an AECB branch. Click here to find more details.

Takeaway

Soulwallet strongly recommends you to compare products through a neutral and unbiased comparison site before you make a financial decision which can be as simple as signing up for a credit card in UAE.

Most UAE residents at some point or the other will need to explore options to avail credit facilities from a financial institution. The reasons could be as simple as managing to pay an annual school fee or to cover an unexpected medical expense. Having a good credit score can not only make the process of getting a loan much simpler but can also potentially help one save thousands of dirhams (a simple example is the money saved through a lower interest rate offered on your personal loan in UAE based on a good credit score).

A Dream Come True: Personal Loans without Salary transfer & Easy documentation

Posted on April 25, 2019December 8, 2020 by admin

The growing trend in today’s lifestyle is opting for a loan that is readily available especially for the salaried class as it is seen as one of the easier targets to win over by banks. And how?

Enter Personal Loans with easy documentation, minimal fuss, and practically the money is in your hands within a day of application.

It is a fact that Personal loans are today available for every purpose heard and unheard of. Apart from meeting marriage expenses, emergency medical situations and tiding over the odd credit card overdue, you can opt for a loan to go on an overseas vacation, purchase one of the most expensive headphones and even take your valentine for a boat ride around the Dubai Marina.

Easy documentation and process

While banks in UAE demand other documents such as a valid passport or a UAE National ID, for an Expat, a valid residency visa is mandatory. The salaried or self-employed people have the option of showing their salary slips as it is one of the major proofs the banks seek in order to sanction a personal loan.

No more Salary transfers

Initially, some banks in the country had demanded people to create a salary account in their bank and transfer the salary to it. By doing so, the customer is benefited with exclusive offers, faster processing of loans and even a free credit card. But many do find the process tedious or some may prefer not to change their existing salary account.

Nowadays, UAE banks are offering personal loans to customers without mandating them to transfer their salary. This is commonly called as a Non-salary transfer loan. This is a hassle-free process and it doesn’t consume much time for banks to process since there is no salary transfer involved. But the income proofs need to be provided. Furthermore, these don’t require any collateral or guarantors.

Though banks do not mandate customers to give any collateral, do keep in mind the interest rates are mostly high when compared to other loans such as home, car or gold loans. The loan amount is purely dependent on the salary and the interest rates which vary from bank to bank.

Let’s look at various banks which offer personal loans without salary transfer:

Emirates NBD:

It is a National Bank in Dubai and the United Arab Emirates. It is one of the oldest and largest banking groups in the region. They offer loan amounts up to AED 500,000 for both UAE Nationals and Expats who have a minimum salary of AED 10,000. The repayment period offered is up to 48 months and the interest rates start from 14.99%.

Dubai Islamic Bank:

It is the largest Islamic bank in terms of assets and is the first bank to incorporate principles of Islam in all practices. People are considered eligible if they earn a minimum salary of AED 3000 which would get them loans up to AED 400,000. The repayment period extends up to 48 months.

Union National Bank:

One of the leading domestic banks in the UAE region which offers personal loans up to AED 200,000 for UAE Nationals and Residents. For this amount, the bank expects the applicant to have a minimum salary of AED 10,000. The repayment period offered is up to 12 months.

Citibank:

A subsidiary of the multinational company, Citigroup and is one of the famous banks in the UAE region. Possessing a Minimum salary of about AED 8,000 per month would get you a maximum finance amount up to AED 175,000. This bank is known for its fast approvals on personal loans.

Conclusion:

While there are several options for one to avail a personal loan in UAE. It is important to note that a clean credit history is essential for availing credit in the country. Hence, borrow if its required and ensure you make payments on time.

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

Posted on November 10, 2018November 10, 2020 by admin

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.

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.

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.
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 %)
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.
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.

Are financial decisions easy?

Posted on October 1, 2018October 31, 2019 by admin

After much thought, I decided upon embarking on the second innings of my entrepreneurial journey. The path that took me to reach where I am today hasn’t been a cakewalk. At times an experience alone can unknowingly pave the way for us to take certain decisions. But were those experiences always easy? Well, not really as you would soon find out.

As much as I love venturing outdoors, summers in Dubai literally force me to stay within the limits of my perfectly air conditioned home. Being an avid fitness enthusiast, this means visiting the gym regularly. That day at the gym I was politely reminded about the impending renewal of my annual membership. As I was about to swipe my credit card, the manager informed that the loyalty programs’ benefit of my card entitled me for a complimentary renewal. Needless to say, I was overjoyed hearing this but right at that moment it struck me that all these years I have been burning a hole in my pocket unknowingly. Had I been aware of these benefits earlier, I would not have had to shell out such enormous amounts of money. I would have instead used my credit card to the best of its potential. The banker in me felt a bit cheated for having lost out on a potential savings opportunity. I realized that perhaps I wasn’t the only one carrying unexploited credit cards in their wallets.

The next instance was at the Dubai Airport, my husband was traveling and forgot an important document. Of course, I rushed to the airport in peak traffic and handed over the car to the valet. Once I handed over documents and bid adieu to dear hubby it was time to redeem my car by paying fee. I was pleasantly surprised to see my parking ticket because it offered complimentary valet parking on the credit card neatly tucked in my clutch. I had a feeling of déjà vu.

Haven’t we all faced situations similar to this? Whether we end up using all the benefits or not is a prerogative best left to the person concerned. But we must be aware of what our credit cards can offer as additional benefits apart from only paying bills and taking care of shopping trips.

It wasn’t the only time I realized my mistake and one such experience literally pushed me to the brim of my patience.

Like most expats in the UAE, we sacrifice a lot to realize the dream of building a house back in our home country. We stretch our limits to save each dirham. After my husband and I had finished finalizing the deal of our dream home, we religiously kept paying the pre-EMI. At that point, little did we know that we were in for a rude shock. Almost 2 years down the line, our loan officer informed that we had only been servicing the interest and not paying towards the loan principal. This essentially meant, we had lost out on substantial savings. To top it all, we realized that this was definitely avoidable. Coupled with these experiences, I wondered if my ignorance about the importance of proper investment decisions could affect my long term financial management.

For the uninitiated, it is always a challenge to take the smartest of financial decisions.

Especially in our 20s and 30s, when we have to decide about various financial needs like car loans, home loans, personal loans, etc., it definitely helps to have a portal that compares and assists with our financial decision making.

With a career in HR spanning over 17 years, I have met people from all walks of life seeking a simple, transparent and trusted friend who can help us with financial planning. Somebody who can read the fine print, compare various products and help us chose the best, not necessarily the cheapest. This triggered the inception of SoulWallet, an unbiased and comprehensive comparison portal for the financial products like Credit Cards, Personal Loans, Home Loans and Car Loans and more. At SoulWallet we have earnestly tried to create a virtual friend who helps make financial decisions with confidence.

10 things to know before you take a loan in UAE

Posted on September 26, 2018October 23, 2020 by admin

10 things to know before you take a loan in UAE

It is common today that you need a loan for your day to day expenditures. In every country, banks have different rules and regulations to offer loans to its customers. In the same way, United Arab Emirates (UAE) banks have their own rules and regulations which must be followed to obtain a loan.

There are different types of loans available in UAE, for example, personal loan, car loan, home loan and business loans. For every type of loan, you have different requirements. But you should know what are the steps to take any loan you must consider them. These are the steps or things which you must know before taking any loan

Rate of interest

Different moneylenders offer distinctive measures of credits at different interest rates. Complete an intensive statistical surveying on various banks and their offers. Banks typically offer loans at higher rates than conventional Islamic banks, for example, Emirates Islamic bank for home loans. Ensure you converse with numerous banks previously going to a choice. This will enable you to make a better choice for taking any type of loan.

Know about the required Documents

Documents required for loans are normally

Salaried/Self-employed

UAE national ID card or a valid passport
In case the applicant is an expat then a valid residency visa for the UAE is also needed.
If the bank requires a salary transfer then a letter of salary transfer will also be needed.

Banks may have distinctive prerequisites for age and employing company as well.

In the event that you work for the private sector, requirements for least business period and qualified age might be higher as compared to Government sector.

Know about your creditworthiness

If you have acquired any loan in the past, at that point there will be a record of your financial record with the bank. This is an extremely powerful method for knowing regardless of whether you are able to pay off any loan. If you missed a few due deadlines previously, your record score would have a tendency to be lower and banks may charge higher interest rates or give you a small loan.

In case you’re a first-time borrower, your financial assessment will be dictated by your pay, age, background and so on. : Each UAE bank will have a minimum standard salary they require you to earn in order to give you any loan.

Secured and Unsecured loans

There are secured and unsecured loans which banks usually offer. Unsecured loans, for the most part, are lower in sums and charge higher rates of interests as they don’t include any guarantee to be set against the loans. In any case, acquiring an unsecured loan is generally easier than secured loans.

Secured loans include putting a collateral against the loan amount, which may be reallocated by the bank, on the off chance that you can’t reimburse the loan. Secured loans are esteemed against the estimation of the property/asset kept as collateral against the loans.

Find out your correct necessity with regards to the sort of debt that you have to dispose of, and choose whether you’ll be OK with a higher rate of interest or putting an asset as a guarantee.

Least expensive ain’t the best

Try not to go for the least expensive loans with daze confidence; rather, take time to compute the genuine cost of borrowing which incorporates the loan sum, the length of the loan, reimbursement frequency, fees and interest charges. It is likewise fundamental to understand the financial guidelines the bank will follow in modifying rates.

Guarantee that whoever is advising you by taking a loan can take you through all the charges in detail and explain the total cost and hidden charges.

Have alternatives

As a rule, a bank may not be your solitary alternative to acquiring a loan. On the other hand that you have a strong financial background, you might be qualified for some credit cards, for example, Citibank that would give you a chance to complete your activity and charge 0% interest for a year. Or then again in case you’re a piece of some trading organization, you may have the capacity to get cash from them at lower interest rate what banks offer.

Don’t take a high amount of loan

Sometimes, banks will offer you more cash, in view of your credit assessment. Abstain from falling into these traps as this won’t just raise the weight of loans yet, in addition, you’ll wind up paying more interest on a little amount of money.

Acquiring a loan has something other than just completing the paperwork and getting the cash in hand. Numerous banks charge processing expenses, enrollment charges and so on as a rule in a level of the measure of cash you wish to get. Discover which banks offer the best arrangement, work it out a little and discover the amount you’ll have to pay the bank, including every one of the charges, expenses, and premium and so on.

Know about Islamic Finance

There are numerous banks in UAE that provide sharia compliance products. Utilizing the Murabaha, the bank would typically purchase the product and after that re-sell the product to the client at a higher cost. The profit can be made in regularly scheduled payments and is referred to as the profit rate.

Early settlement fee

If you are intending to take your loan for a long time, however considering paying it off before at that point, the early settlement expense turns into an imperative factor in your choice. This is an expense forced on you in the event that you choose to pay off your loan early.

How you repay your debt

This is the final step to know how you can repay your loan. Banks offer from one year to five long payment plan with an alternate rate of interest for each offer. Be strategic and discover what amount you would be able to pay in EMIs (Equated Monthly Installment).

An informed and cautious approach to borrowing is the need of the hour.