Mandatory Guidelines for Loan in UAE

While it seems relatively easy to avail loan in the largest Gulf economy, there are however mandatory guidelines for loan in Dubai. For instance, you’ll first need a regular job with a fixed salary or you should be able to show bank statement of several months if you’re self employed.

Last year the Central Bank of Dubai had issued a new set of mandatory guidelines for loan in Dubai. This new set of regulations defines the eligibility criteria of borrowers that is based upon a loan to property value ratio. The aim of the Central Bank is to ensure that banks and other financial institutions offering secured loans to Dubai residents and emigrants should be done in conformation with best practices and controlled frameworks in place.

The guidelines run without privilege to banks and other financial firms offering Shariah complaint loans for the purchase of properties. (Shariah-compliant funds are investment funds which meet all of the requirements of Shariah law and the principles articulated for “Islamic finance.”)  To summarize, these Dubai loan guidelines are enforced by the Central Bank to manage the loan processes such as personal loans and business loans by reducing the level of leverage presently available to the loan seekers and increasing equity in property investments.

Personal loans in Dubai are designed specifically to meet the loan requisites of all Dubai residents, whether they are availing for a home to invest in, to travel or to meet any function expenses. Vying loan amounts, interest rates and quick approvals yield essential value, whilst meeting the medium and long term financial urgencies.

In case of no salary transfer personal loan, loan is designed specifically to aid the borrowers in availing hassle free funds that meet their financial emergency. This type of loan is designed for the salaried migrants working in Dubai, who are seeking a personal loan without having to go through the trouble of transferring salary to the bank.

Mandatory guidelines for loan in Dubai

  • The UAE National must be aged between 21 and 65 years at the time of loan maturity or if he/she is an Expatriate then must be aged between 21 and 60 years at the time of loan maturity
  • The borrower must be a confirmed employee or with six months minimum length of service with a bank approved employer
  • Total monthly income/salary must be between AED 7,000 and AED ​8,000​
  • The loan installment along with the overall regular monthly installments should not exceed 50% of the monthly salary

Required Documentation:

  • Application form and loan agreement
  • Copy of Passport and Valid Residence Visa
  • Copy of valid Emirates ID
  • Salary Certificate
  • Last 3 months bank statement
  • Direct Debit Form (For non-account holders of a particular bank)
  • Security Cheque covering 120% of the loan amount
  • Personal Loan Application Form – “will be provided by the bank

Before offering the loan, the processing must entail all the required data about the size of the loan, maturity and interest rates while borrowers on the other hand must submit a letter from their employer assuring to have his salary and end of service benefits transferred to that bank during the debt period.

For every type of loan banks should make their clients aware about the terms and conditions in length. For instance, in case of overdraft, the bank provides extra amount rather than their savings that they can draw from their account to their trustworthy clients. Also, the borrowers should be able to pay back at a date mentioned by the bank provided the borrower is given the 30 days notice.

Those were a few mandatory guidelines and regulations to consider while availing loan in Dubai. Hope you found this post useful!

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