UAE personal finance

What are the Eligibility Criteria for Personal Loan in the UAE for Expats?

Posted on November 9, 2021November 9, 2021 by admin

Nestled in the southeast corner of the Arabian Peninsula, the UAE is an ever-growing country. Since the 1960s, the Emirates have experienced significant economic growth and have quickly become one of the richest nations in the world. The UAE is a melting pot of cultures, with around 85% of the entire population consisting of expatriates. Many come to the UAE seeking new opportunities and growth. Thus, the UAE has a large and vibrant community of expats and with many professional opportunities available to expatriates, it is one of the best destinations to live and grow in.

Understanding your money management options as an expat living in the UAE can be tricky and confusing. It is important to know which options are right for you to open and operate your bank account and ensuring your family’s home and belongings. With the rise in the cost of living in the UAE, it may sometimes become difficult to save funds for a rainy day, which can further lead to a financial crisis during emergencies. You can opt for a personal loan from banks for financial aid. However, to get a Personal loan in the UAE for expats, you have to be eligible as per the requirements of the banks. The eligibility criteria usually differ from bank to bank and are based on the applicant’s profile.

Banks in UAE offer two types of personal loans to expats:

Personal Loan Without Salary Transfer: Personal loan in UAE without salary transfer provides the loan applicant to apply for a personal loan without having to transfer their salary into a particular bank account. Citibank, FAB or some banks offering loans without salary transfer.

Personal Loan With Salary Transfer: Personal loan in UAE with salary transfer rewards the loan applicant to maintain an account with the bank by transferring their salary into it every month. ENBD, Mashreq, FAB and Citibank are some popular salary transfer loans in the market.

The loan with salary transfers offers an attractive interest rate as compared to the ones without a salary transfer. In general, a personal loan without a salary transfer is opted by those who either do not have their company listed by the banks for a salary transfer loan or for those who are looking for a second loan.

The eligibility requirements for a Personal Loan in the UAE for expats are:

Minimum Income: Banks in UAE have different requirements for the minimum monthly income of expats for personal loans. While the minimum requirement is AED 5000 fixed salary per month, most of the banks have their entry level criteria ranging from AED 7000 per month. The higher the income the better are the options.
Employment Status & Listed Company: This applies to salaried individuals. While some banks give approval with company listings, some banks in UAE require expats to be employed in their listed companies. Listed companies are those which have been categorized or scrutinized by the banks as companies eligible for such a Salary transfer loan for its staff. The listing is basically done on the company credibility such as years in business, number of employees, setup, and other factors.
Salary Transfer: Some banks in UAE require salary transfers for personal loan approval.
Age: The maximum age of applicants is 60 and the minimum age is 21 for applying for a personal loan in UAE for expats.
Proof of Residency: Almost every bank offers loans for expats, but it is difficult to find a bank that can offer personal loans for non-resident expat. Expats can apply for personal loans that can provide residency proof by providing a passport with a valid visa and documents supporting proof of residency.
Credit history: Customers applying for personal loans in UAE should have a good credit score with a good credit history. A good credit report shows that the applicant is eligible to repay the loan. Applicants with high credit score can get preferential interest rates from banks. Minimum Credit Score (Al Etihad Credit Bureau Score) starts from 651. The better the score the lower the interest rate in general.
Employment and Income Proof: This can be shown by presenting a salary slip and documents supporting your employment status. Certain banks also require the applicant to have a specified experience in their job to qualify, in such a case the joining letter would also have to be submitted to the bank
Bank statements: Depending on the banks, the applicant would have to submit their bank statements ranging between the last three to six months.
Loans for Self-employed Customers: Some of the banks such as RAKbank, ADCB and DIB provide loans to self-employed customers. The criteria usually are the years in business, nature of the business and the Average Annual Turnover.

Along with the eligibility criteria, applicants also need to present official documents to the banks for getting a personal loan.

For Identification of the Expats:

Copy and Original Emirates Identity Card
Resident Visa proof
Address proof (for example utility bill)
Security Cheque (Undated)

For salaried expats:

Salary transfer letter or salary certificate
Bank statement of the previous 3 months

For Self-employed Expats:

Power of attorney
Memorandum of Association
Trade license
Bank statement of the previous 6 months

The interest rate for personal finance varies for expats and differs across different banks. They are based on two options.

Reducing the rate of interest: The reducing rate of interest starts at a certain percentage but declines every year.
The flat rate: The flat rate of interest is decided at the beginning by the bank and is consistent and cannot be reduced on a yearly basis.

Some of the best consumer loan providers in the UAE for expats are:

List of Banks	Maximum Finance Amount	Minimum Monthly Salary Required
Emirates Islamic Personal Finance	Up to 2 million AED	AED 5000
Ajman Bank Goods Murabaha	Up to 1 million AED	AED 6500
ADIB Personal Finance	Up to 1 million AED	AED 8000
CBD Personal Loan	Up to 750,000 AED	AED 8000
Emirates NBD Personal Loan Without Salary Transfer	Up to 500,000 AED	AED 10,000
Mashreq Personal Loan for Expats	Up to 1 million AED	AED 7000 (for applicants from the approved list) AED 10,000 (for applicants of the unapproved companies)
RAKBANK Personal Loan for Expats	NA	AED 5000

Tips for Getting Your Application for a Personal Loan Approved:

In order to ensure that the application does not get rejected, applicants should keep certain tips in mind

Ensure that the applicant meets the eligibility criteria that has been stated by the bank. If the applicant fails to meet any of the eligibility criteria, the request will be denied.
Ensure that the applicant has a good credit score to let the banks know the risk associated with providing the applicant the loan.
Ensure that the applicant would be able to payback the loan factoring your monthly salary and expenditures.
Most banks in the UAE give upto 4 years for repayment.
Sending out multiple applicants would damage the chances of getting a personal loan.

The process to apply for a loan has become simple and easy to help and encourage expats in gaining a personal loan in the UAE. However, applying for a personal loan does not confirm the loan approval. Expats will have to qualify certain eligibility criteria to be approved and financed.

The well-researched, solidly structured, unbiased content along with unique tools at SoulWallet helps you make well informed financial decisions for your personal and business transactions. In the process, SoulWallet helps you identify the options that will let you save money and enjoy the best perks.

SoulWallet grants their users services that would help them make the most of a wide range of personal finance solutions, from credit card reward cards in the UAE, to personal loans, to Islamic credit cards, to air miles credit card application and a lot more.

A Comprehensive Guide to Personal Loan Interest Rates in 2021

Posted on August 24, 2021August 24, 2021 by admin

A personal loan is a loan that may be secured or unsecured and is offered with minimal documentation. You can use the funds from this loan for any financial need. Like any other loan, you must repay it as per the agreed terms with the bank in easy EMI (equated monthly installments).

Personal loans in UAE today are the preferred means of short-term credit. The bank offers personal loans based on two types of interest rates – flat rates and reducing rates. A flat rate of interest on a loan refers to when the interest and sum payable is calculated at the start of the repayment schedule and do not change until the loan has been paid off. Whereas in terms of reducing rate of interest on a loan the principal amount reduces after each installment. The interest percentage (which remains constant) is charged on the reduced amount, every month. Thus resulting in different installment amounts each month.

Types Of Personal Loans

Personal loan with salary transfer: This is most probably the first loan one can avail from the bank where the customer holds a salary account. These loans are low in interest rates compared to the other personal loans without a salary transfer. Banks offer competitive interest rates for their customers for such loans and generally require a minimum salary requirement of AED 5000 (which differs from bank to bank). If you wish to take the loan from another bank where you don’t have any account then you have to maintain an account with the bank and transfer the salary into it every month.

Personal loan without salary transfer: This is one of the popular loans that allow the loan seeker to apply for a personal loan without having to transfer their salary into a particular bank account. Interest rates are higher for such loans and the lending amount might be lower than a Salary Transfer loan.

Expat loans: Expatriates are those people who live in the UAE but aren’t residents of the UAE. To help them manage their financial needs easily, banks offer personal loans to ex-pats as well with attractive interest rates and repayment tenure up to 48 months.

Buyout loans: When you take a personal loan that can be used to pay all of your previously existing loans or a credit card debt it is known as a buyout loan. In this type of loan, the borrower has to pay a fixed monthly payment to the bank for a pre-defined period that is usually two years to five years to pay off your buyout loan. Both UAE nationals and ex-pats can apply for such loans.

Consolidation loan: Debt consolidation services allow for the consolidation of all your outstanding liabilities arising from various loans or outstanding dues on credit cards into one single consolidated liability. Such loans are advantageous because you are being able to manage all outstanding liabilities together in one consolidated form.

Consider the comparison table below on interest rates offered by banks in the UAE

Bank Name	Loan Name	Fixed Interest Rate	Reducing Interest Rate	Minimum Salary	Maximum Loan Amount
Abu Dhabi Commercial Bank	Personal Finance	3.25%	5.90%	AED 10,000	AED 0
Abu Dhabi Commercial Bank	Personal Loan	6.25%	11.33%	AED 10,000	AED 250,000
Abu Dhabi Commercial Bank	Personal Loan For Expatriates	6.25%	11.33%	AED 10,000	AED 25,000
Abu Dhabi Islamic Bank	Debt Settlement	3.58%	6.50%	AED 8,000	AED 1,000,000
Abu Dhabi Islamic Bank	Education Finance	3.85%	6.99%	AED 8,000	AED 250,000
Abu Dhabi Islamic Bank	Personal Finance	3.72%	6.75%	AED 8,000	AED 1,000,000
Al Hilal Bank	Personal Finance	3.25%	5.90%	AED 10,000	AED 0
Arab Bank	Personal Loan	3.30%	5.99%	AED 5,000	AED 550,000
Citibank	Personal Installment Loan	7.71%	14.00%	AED 8,000	AED 175,000
Citibank	Salary Transfer Loan	3.85%	8.00%	AED 8,000	AED 250,000
Commercial Bank Of Dubai	Personal Loan	3.03%	5.50%	AED 8,000	AED 750,000
Deem Finance	Personal Loan	11.01%	19.99%	AED 5,000	AED 0
Dubai Islamic Bank	Liabilities Settlement Finance	0%	0%	AED 5,000	AED 0
Dubai Islamic Bank	Personal Finance	6.06%	11.00%	AED 5,000	AED 2,000,000
Emirates Islamic	Personal Finance	2..17%	3.94%	AED 5,000	AED 1,000,000
Emirates NBD	End-Of-Service Benefit Backed Personal Loan	3.30%	5.99%	AED 5,000	AED 0
Emirates NBD	Loans For Nris	2.20%	3.99%	AED 5,000	AED 0
Emirates NBD	Salary Transfer Loan	2.63%	5.99%	AED 5,000	AED 1,000,000
Emirates NBD	Salary Transfer Loan For UAE Nationals	2.63%	5.99%	AED 5,000	AED 3,000,000
Emirates NBD	Loans For New To Country, New To Employment	2.63%	5.99%	AED 10,000	AED 400,000
Emirates NBD	Personal Cash Loan	4.96%	8.99%	AED 10,000	AED 500,000
Emirates NBD	UAE National Personal Loan With Additional Income	3.18%	5.24%	AED 10,000	AED 3,000,000
Emirates NBD	Personal Loans For Self-Employed Professionals	10.40%	18.90%	AED 20,000	AED 300,000
Emirates NBD	Personal Loans For Self-Employed Individuals	10.40%	18.90%	AED 25,000	AED 0
First Abu Dhabi Bank	Buyout Loans	4.08%	7.40%	AED 5,000	AED 5,000,000
First Abu Dhabi Bank	Landlord Loans	5.10%	9.25%	AED 5,000	AED 2,000,000
First Abu Dhabi Bank	Islamic Personal Finance	2.64%	4.99%	AED 7,000	AED 5,000,000
First Abu Dhabi Bank	Personal Loans For UAE Expats	4.99%	3.99%	AED 7,000	AED 5,000,000
HSBC	Personal Loans	4.13%	7.49%	AED 7,500	AED 750,000
Mashreq	Debt Consolidation Loans	0.00%	0.00%	AED 5,000	AED 0
Mashreq	Personal Loan For Expatriates	6.25%	11.50%	AED 5,000	AED 1,000,000
Mashreq	New To UAE, New To Employer Loan	4.07%	7.38%	AED 7,000	AED 150,000
Mashreq	Non Salary Transfer Personal Loan For Expatriates	14.10%	25.60%	AED 7,000	AED 150,000
Mashreq	Emirati Personal Loans For Pensioners	0.00%	0.00%	AED 10,000	AED 0
Mashreq	Personal Loans For Emiratis	0.00%	0.00%	AED 10,000	AED 3,000,000
Nbf	Personal Loans	3.25%	6.25%	AED 5,000	AED 0
Rakbank	Non Salary Transfer Loan	5.99%	10.86%	AED 5,000	AED 1,250,000
Rakbank	Business Finance	12.00%	21.00%	AED 50,000	AED 3,000,000
Sharjah Islamic Bank	Personal Finance	0.00%	0.00%	AED 5,000	AED 0
Standard Chartered	Saadiq Personal Finance	4.16%	7.55%	AED 15,000	AED 1,000,000
Standard Chartered	Debt Consolidation Plan Loan	3.89%	7.05%	AED 30,000	AED 1,000,000
Standard Chartered	Personal Loan	3.89%	7.05%	AED 30,000	AED 1,000,000
Union National Bank	Expatriates Loan	3.13%	5.68%	AED 5,000	AED 500,000
Union National Bank	Education Loan	4.96%	9.00%	AED 10,000	AED 0
Union National Bank	Non Salary Transfer Loan	7.72%	14.00%	AED 10,000	AED 0
Union National Bank	Rent Loan	4.96%	9.00%	AED 10,000	AED 0
Union National Bank	UAE Nationals Loan	2.48%	4.50%	AED 10,000	AED 500,000
United Arab Bank	Personal Loan For Expatriates	3.03%	5.49%	AED 7,500	AED 2,000,000
United Arab Bank	Personal Loans For UAE Nationals	3.03%	5.49%	AED 7,500	AED 2,500,000

The above interest rates are purely indicative. Interest rate is generally based on factors such as

Bureau Score
Income
Loan Amount
Employer

The Biggest Advantages of Using an EMI Calculator Before Applying For Your Personal Loans in UAE

Before finalizing any personal loan, you should always use the EMI calculator because it will assist you to evaluate, simulate and arrive at the maximum loan amount, interest rate and affordable easy monthly instalments will help you select the best suited personal loan as per your budget. Soulwallet personal loan EMI calculator is easy to use, simple to understand, and is quick to perform. All you need is to use the slider to adjust the loan amount, interest rate (reducing), and tenure. You will get the EMI, total repayment, total interest, and interest rate (flat) as per your input.

What are the Eligibility Criteria for Personal Loan in the UAE for Expats?

Posted on August 24, 2021August 26, 2021 by admin

Banks in UAE offer two types of personal loans to expats – personal loans without salary transfer and personal loans with salary transfer.

Personal Loan Without Salary Transfer: Personal loan in UAE without salary transfer provides the loan applicant to apply for a personal loan without having to transfer their salary into a particular bank account. Citibank, FAB or some banks offering loans without salary transfer.

Personal Loan With Salary Transfer: Personal loan in UAE with salary transfer rewards the loan applicant to maintain an account with the bank by transferring their salary into it every month. ENBD, Mashreq, FAB and Citibank are some popular salary transfer loans in the market.

One must always opt for loan with a salary transfer as these loans carry an attractive interest rate compared to the ones without a salary transfer. In general, a personal loan without a salary transfer is opted by those who either do not have their company listed by the banks for a salary transfer loan or for those who are looking for a second loan.

Eligibility Criteria for Personal Loan in UAE for Expats

Eligibility criteria differ from bank to bank based on the applicant’s profile. Here are some of the basic eligibility requirements for a personal loan in UAE for expats:

Minimum Income: Banks in UAE have different requirements for the minimum monthly income of expats for personal loans. While the minimum requirement is AED 5000 fixed salary per month, most of the banks have their entry level criteria ranging from AED 7000 per month. The higher the income the better are the options.

Employment Status & Listed Company: This applies to salaried individuals. While some banks give approval with company listings, some banks in UAE require expats to be employed in their listed companies. Listed companies are those which have been categorized or scrutinized by the banks as companies eligible for such a Salary transfer loan for its staff. The listing is basically done on the company credibility such as years in business, number of employees, setup and other factors.

Salary Transfer: Some banks in UAE require salary transfers for personal loan approval.

Age: The maximum age of applicants is 60 and the minimum age is 21 for applying for a personal loan in UAE.

Documents: The applicants are required to provide the following documents to apply for a personal loan:

For Identification of the Expats:

Copy and Original Emirates Identity Card
Resident Visa proof
Address proof (for example utility bill)
Security Cheque (Undated)

For salaried expats:

Salary transfer letter or salary certificate
Bank statement of the previous 3 months

For Self-employed Expats:

Power of attorney
Memorandum of Association
Trade license
Bank statement of the previous 6 months

Credit history – Customers applying for personal loans in UAE should have a good credit score with a good credit history. A good credit report shows that the applicant is eligible to repay the loan. Applicants with high credit score can get preferential interest rates from banks. Minimum Credit Score ( Al Etihad Credit Bureau Score) starts from 651. The better the score the lower the interest rate in general.

Proof of Residency – Almost every bank offers loans for expats but it is difficult to find a bank that can offer personal loans for non-resident expat. Expats can apply for personal loans that can provide residency proof by providing a passport with a valid visa.

Loans for Self-employed Customers: Some of the banks such as RAKbank, ADCB and DIB provide loans to self employed customers. The criteria usually is the years in business, Nature of business and Average Annual Turnover.

Five Things to Watch Out For When Opening a Bank Account

Posted on May 25, 2020December 7, 2020 by admin

Opening a new bank account may not be something that takes up much of our thought. Whether we want to take advantage of certain incentives and rewards or want to spread our assets across multiple banks, we have the power to open as many accounts as we would like.

When opening a new bank account, however, it’s important to stay on guard. Yes, it may seem like an innocuous process, but several things can trip you up when opening your new account. By being proactive, however, you can mitigate your risk and safeguard your future financial health.

Protecting Yourself When Opening Your New Bank Account

First, you will want to account for any maintenance fees. Some bank accounts have different types of maintenance fees just for holding an account with them. These monthly maintenance fees can be minor, yet they are real fees that can eat into your bank balance. In a low interest rate environment, any interest income that you obtain may not offset these fees.

The good news, however, is that some banks allow you to waive these maintenance fees under certain conditions. For instance, the fee may be waived if you have one direct deposit into the account per month. They may also be waived if you keep a balance above a certain threshold. Make sure that you read the fine print so that you can avoid these pesky maintenance fees.

Another thing to closely monitor when opening a bank account is overdraft protection. Overdraft fees can be much more substantial than maintenance fees. Moreover, you can get charged multiple overdraft fees in a single day. These costs can quickly add up.

All bank accounts have overdraft fees. That being said, you’ll want to see if your targeted bank account offers overdraft protection. As just one example, your bank may be able to issue you a line of credit that can cover any overdrafts. If you are opening checking and savings accounts at a particular bank, you may also be able to link them so that your savings account can cover an overdraft of your checking account. Simply put, make sure that there is overdraft protection before opening your account.

Next, be on the lookout for a bank account that offers a wide ATM network. Even though many of us are less reliant on physical cash, there may be times where you need to get cash in a hurry. If you open a bank account with a narrow ATM network, you’ll have more trouble finding an ATM from your bank. In all likelihood, you’ll need to use another bank’s ATM, which results in fees from that bank and your bank. To avoid this situation, open an account with a bank that has a wide ATM footprint.

Fourth, make sure that your bank has an easy-to-use website and mobile app. Increasingly sophisticated digital technologies and our busier lives make it extremely convenient to bank without walking into a branch. Because of this, keep an eye out for banks that offer great digital tools. You’ll want to make sure that these tools let you do everything from check your balance, deposit a check, and transfer money.

The good news is that almost every bank offers websites and mobile apps. So when doing your research, get a sense of which banks offer the most features and most seamless experiences. Doing this will help you avoid headaches in the future.

Finally, make sure that you are taking advantage of incentives and rewards. These incentives and bonuses send you cold, hard cash that you can spend however you’d like. For instance, Mashreq Bank offers an AED 2,000 joining bonus for opening up an Instant Account. Make sure that you shop around and find the incentives that are most attractive to you. As you’re doing this, however, make sure to read the fine print so that you actually receive the incentive.

Safeguarding Your Wealth

Opening another bank account can be a great way to safeguard your wealth. When doing so, however, make sure to protect yourself through the tips above. By taking your time and keeping these insights in mind, you’ll be able to select the best bank account for your financial needs.

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 loans.

Online Credit Card-Related Fraud – What to watch out for?

Posted on April 29, 2020September 13, 2020 by admin

One of the best things about the Internet today is that you can purchase literally anything from the comfort of your own home. Whether you are browsing Souq or your favorite online clothing retailer based in the UAE, your next item can be at your door with just one click of the button.

That being said, there are some downsides to online shopping. One of the most notable is online credit card-related fraud. There are plenty of bad actors out there who are looking to steal your credit card number. With your credit card in hand, they can do a significant amount of damage before they are caught.

Yes, popular credit cards do offer some fraud protection. However, you cannot rest on your laurels, as there is no guarantee that your credit card company will reimburse you. Because of this, we want to take this time to share some key things to look out for related to online credit card fraud. Whether you think that you may a victim or you are simply trying to be proactive, these tips can keep some of your hard-earned cash in your pocket.

Things to Monitor to Avoid Credit Card Fraud

One of the first and most effective ways to prevent credit card fraud is to familiarize yourself with popular credit card scams. While it’s impossible to know every online credit card scam out there, understanding what some of the most popular look like can help you avoid them. While it is a never-ending task, it is a great habit to build in your personal finance life.

You can find some of these popular credit card scams by clicking here. For example, there is a scam where criminals call your phone and pretend they are from your credit card company’s fraud department. They ask you to verify some personal information—including the security code on the back of your credit card. Another scam involves credit card skimming, where fraudsters will steal your credit card number through a skimming device and use it to make later purchases. And you cannot forget about common phishing scams, where scammers impersonate your bank and try to have you click on a malicious link and enter your login information. These are just some scams that you’ll need to evade in your day-to-day shopping life.

From being knowledgeable about credit card scams, you’ll next want to be cautious when actually using your credit card online. Many Internet retailers have done a great job making their websites more secure. Nonetheless, you should only enter your credit card information on a website that is legitimate. Some scammers create websites that appear to be real, but were set up solely to steal credit card information. Be especially careful when making purchases on websites that do not have an “https://” in the address bar or a lock in the lower right corner of your browser.

Next, be careful when shopping on websites that are too good to be true. This is another common-sense rule in the world of personal finance. While there are plenty of great deals on the Internet today, you should be wary of those that seem truly unique or out of this world. It may be that a scammer or bad actor is simply trying to entice you to provide your credit card information without sending you your purchase.

Finally, make sure to monitor your accounts. For as much as we may want to monitor all of our purchases, we may fall short. Life gets in the way. A seemingly benign purchase on a new website may lead to stolen credit card information. Yet even though we may not be able to monitor every threat, we can view our statements every month. By getting into a monthly habit of reviewing your credit card purchases, you can quickly discover (and correct) any fraudulent activity.

Stay Vigilant

For as many benefits that Internet shopping brings to our lives, we must protect ourselves from the downsides. Credit card fraud certainly exists in the UAE and throughout the world. Whether you are a holder of several popular credit cards or just obtained a new credit card, we urge you to stay vigilant. By doing so, you will save yourself from tremendous headaches down the road.

Five Reasons to Consider Doing a Balance Transfer on Your Credit Card

Posted on April 22, 2020September 13, 2020 by admin

The sudden rise of COVID-19 has presented varying degrees of economic stress among UAE residents. Institutions like the UAE Central Bank and some of the UAE’s biggest banks have acted swiftly to relieve some of this unexpected, yet very real financial pressure. Yet even with that assistance, this is a great time for all UAE residents to take a hard look at their current finances.

There are several ways that you can proceed, but we believe that one of the first things you should do is closely look at the balances on your credit cards. For many of us, our credit card balances are some of our highest payments per month. While we may be able to pay off our monthly credit card balances during “normal times, COVID-19 this increased time of uncertainty may make those payments much more difficult.

If you are feeling this type of financial pressure, you may want to seriously consider something called a balance transfer. Balance transfers, put simply, let you move high-interest debt onto another credit card that has a lower interest rate. By doing this, you can keep some of your hard-earned money in your pocket.

To better understand the power of balance transfers, we want to highlight five reasons why you should consider them. Whether one or all of the reasons resonate with you, we believe balance transfers can be compelling options in this era of COVID-19.

Five Reasons to Consider Balance Transfers

The first reason to go forward with a balance transfer centers on your current credit card interest payments. Simply put, balance transfers can temporarily eliminate a high annual percentage rate on your current credit card, allowing more of your payment to go toward your principal. If you are in deep credit card debt, this is a huge deal. A significantly lower (or even zero) interest rate means that you are getting significantly closer towards a zero balance. Therefore, even if there is a small fee to complete a balance transfer, a lower APR may be worth it.

Directly tied with lower interest payments is the ability to save cash in the long run. It’s pretty simple. Allocating more of your monthly payment to your debt outstanding rather than interest is going to keep more cash in your pocket. It is a substantial step on your way toward financial freedom. A balance transfer can offer that unique opportunity, letting you have a few key months where you can make your outstanding principal more manageable.

Balance transfers can also be a great idea because they may be able to raise your credit score. The effect isn’t direct, but there are some ways that your credit score can be improved with a balance transfer. Most notably, it can reduce your credit utilization ratio. This is assuming that you don’t close your old credit card account. Along with paying off your principal, you may see a bump in your overall credit score.

Fourth, a balance transfer can help you build good habits and instill discipline. One primary reason why borrowers seek balance transfers is to obtain some breathing room from overbearing interest payments and debt. Balance transfers can provide this, but they also provide great opportunities to get into great financial habits. For instance, paying down your balance every month and spending less than you make are terrific habits to build.

Finally, credit card balance transfers can make you happier. They can provide both short-term and long-term financial relief. By capitalizing on this relief and getting a better hold over your finances, you’ll feel happier and less stressed. This is a real benefit—especially as we are living through COVID-19.

A Compelling Option

These are just some of the benefits of credit card balance transfers. Granted, you will want to read the fine print and find a balance transfer that makes the most sense for you. Some balance transfer arrangements have a low (or zero) APR, but ramp up significantly after several months or if you miss one payment.

Even so, balance transfers can be a valuable tool in personal finance. Whether or not you choose to use this tool, we encourage you to do your research. You may find that a balance transfer is just the thing you need to get your financial freedom.

How to Cope With Your Personal Finances and Debt Amidst COVID-19

Posted on April 2, 2020November 10, 2020 by admin

COVID-19 has been one of the most disruptive public health and economic stories in recent memory. The UAE has 42294 total confirmed cases (source https://doh.gov.ae/covid-19 as of 15th June 2020) and there will undoubtedly be more. Moreover, shelter-in-place orders and nightly curfews throughout major cities across the world (including in the UAE) have caused massive ripple effects throughout the global economy.

Even though the UAE has a relatively low case count compared to other nations throughout the world, it isn’t immune to the economic stress. In fact, you may be experiencing some of these financial pressures right now. It can be scary—especially because it’s unclear when normal life will return.

Having said this, there are reasons to be optimistic. While the situation is constantly changing, we wanted to share several personal finance suggestions and resources that you can leverage in these uncertain times. These resources will help you obtain some financial relief (and even unlock exciting financial opportunities) as we continue to battle COVID-19.

Take Stock of Your Current Finances

Generally speaking, one of the first things that you should do amidst this economic uncertainty is to take stock of your current finances. Take a look at your cash in hand (if any) and note any upcoming bills or payments, whether it is your rent or mortgage, credit card bills, or something else. If there is a significant chance that you cannot meet any (or all) of these upcoming liabilities, you’ll want to take action now.

We will shortly describe some of these opportunities provided by the UAE government and financial institutions. Putting that aside, you may want to contact your credit card companies and lenders if you feel like you cannot pay your bills on time. While there are no hard and fast rules here, your lenders may be able to defer some of your payments if you explain your current financial situation.

Whether or not you are facing imminent financial pressures, you will want to adopt more stringent spending habits. Think long and hard about your discretionary purchases. While you may have been eyeing that new car or purse for some time, it’s probably better to be conservative here. It’s unclear when the economic pain from COVID-19 will end, so cash is king. Cash gives you optionality and will eliminate some stress if this crisis lasts longer than expected.

On a more optimistic note, COVID-19 can be a great investment opportunity if you have savings or significant discretionary income. Asset prices have fallen in the UAE and throughout the world. Because of this, you may want to think about purchasing index funds or other equities. As we’ll describe below, the government is also offering incentives for first-time homeowners. You will clearly want to do your own due diligence, but the bottom line is that this may be a great time to enter the markets. However, if you foresee any near-term financial pressures, you will likely want to stay liquid and keep cash on hand rather than make any long-term investments.

The bottom line? As with all personal finance advice, you need to closely monitor your income and spending habits. Stay conservative and make sure that you’re not spending more than you are making. And if you foresee any potential issues paying your current or upcoming bills? We encourage you to speak with your lenders and take advantage of the financial relief described below.

Financial Relief and New Incentives

Because of the sudden disruption that COVID-19 has caused, the UAE government has ordered banks and other financial institutions to provide relief to individuals and families. These are some compelling opportunities, so we encourage you to pay close attention.

For instance, if you have a mortgage, car loan, or personal loan, you can apply for a one month repayment holiday with no extra fees. Borrowers who have been financially affected by the COVID-19 outbreak may also be able to obtain loan repayment deferrals for up to three months and interest-free installment plans of up to six months on things like grocery purchases, utility bill payments, and school fee payments.

To take advantage of these payment plans and deferrals, you’ll want to follow up with your bank. UAE banks (like First Abu Dhabi Bank and Abu Dhabi Commercial Bank) have moved quickly to support their retail and SME customers. If you bank with a non-UAE financial institution, you will also want to read the fine print to understand all of the incentives that may be at your disposal. As just one example, if you bank with Standard Chartered, you will receive refunds for foreign currency translation fees on canceled travel bookings. Along with this, cash advance fees on credit cards are cut in half. Again, make sure you complete your due diligence so that you can take advantage of your bank’s available incentives.

Getting some more time to pay your upcoming bills can go a long way in providing financial relief. But along with this, you may be thinking that this is a good time to make some investments. First-time home buyers, for example, can obtain a reduced down payment of up to 5% on their home purchases. You can also obtain interest-free installment plans for school tuition. This includes the waiver of service of charges or a 0% interest loan until 30 June 2020. Ultimately, the UAE government has moved swiftly to relieve financial pressure on residents and to spur continued investment in the country. Therefore, don’t hesitate to take advantage of these opportunities (the sooner, the better).

Finally, if you are a small business owner in the UAE, there are additional financial opportunities available to you. For example, you can reduce their interest charges on new borrowings based on new prevailing interest rates for eligible customers. Along with this, you can reduce bank charges by half on the early settlement of existing borrowing for eligible customers until 30 June 2020. For some more financial relief opportunities available for small businesses, feel free to click here.

Riding Out the Storm

Unfortunately, we are likely nowhere close to the end of COVID-19. A potential vaccine is still far away and there is likely more economic pain ahead. We are truly living in uncertain times, so you must be proactive to minimize financial damage from this global pandemic.

The good news, however, is that there are plenty of resources to help you ride out this economic storm. The government has been proactive in helping you defer some of your upcoming payments. Also, there are new incentives to make a long-term investment in the UAE. Ultimately, we encourage you to take advantage of as many of these opportunities as necessary.

How to choose between Personal Loan & Salary Transfer Loan

Posted on October 27, 2018October 23, 2020 by admin

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.