Coping with financial obligation and loans into the UAE: First-hand records

Coping with financial obligation and loans into the UAE: First-hand records

You borrow to repay other loan providers

– Mohammad from Jordan

Crunching figures became an exercise that is scary.

Mohammad, from Jordan, has called the United Arab Emirates their home since 2004. An engineer, their selection of career has provided him a career that is lucrative. Mostly. As he ended up being making their option to the emirates, in 2000, he paid small heed into the company he had been signing as much as.

“You understand when you initially come right here you wish to utilize any business, you don’t understand the title, their procedures, how they are doing. But we began with a really company that is bad they’re not having to pay salaries and so I need certainly to remain two-three months without wage. I need to make use of bank cards and loans to survive (sic),” he explains.

The others ended up being simply a spiral that is downward. When you begin, he claims, you can’t simply stop. “You don’t have actually other earnings. The individuals through the bank had been extremely sweet, very kind…i obtained one charge card by phone, i did son’t also submit any paper –like zero. 2008 we required bank card, the 2nd time it had been within the mail,” he claims associated with simplicity with which he gained use of funds.

And though a couple of years later on Mohammad had discovered himself a far more dependable manager, he had been nevertheless up against an uphill task. He recalls: “My worst instance had been about 2 yrs ago; we had to pay for like Dh45,000 and my wage had reached Dh40,000, and so I had to borrow to pay for it.”

“You eliminate a hat with this mind use it another mind,you borrow from one to pay the other” he says.

a episode of cancer tumors in 2014 additionally took a cost. Medical debts that are unsecured along with his bank card trouble led him to that loan of very nearly Dtitle million.

Come 2016, Mohammad felt lost. Into the depths of despair, he came across financial obligation consolidators whom assisted him balance more favourable regards to interest. “Previously I experienced you realize like charge card with the limit Dh200,000. I must spend Dtitle0,000. They deduct Dh8,000 as fees. I did son’t realize about it. Now i will be having to pay however they are using it out from the outstanding principal so it’s reducing thirty days by month,” he describes.

Thus far, the gent has was able to shut about five credit cards. Their amount of time in the mortgage home is nearly up.

We can’t live with my loved ones, due to my financial obligation

-Rafiq, from Pakistan

Circumstances can tare families aside.

“I’m 45 years old,” says Rafiq, their voice strained but determined.

“I’m working at the airport as being a basic helper. I happened to be managing family members in the nation. Then a year ago my children left. It had been 2007 when we arrived right here, from Pakistan.”

The cost of living began to tug at Rafiq’s bag strings nearly straight away. He took one loan for the automobile and their kiddies – he has got five; the very last came to be when you look at the UAE – began getting an training.

“School costs is quite expensive, residence is quite expensive so we had been surviving in Sharjah and then…we were in financial dilemmas,” he claims.

Due to the stress, their household left. By having a sound cracking with feeling he claims, like you can easily state fish can’t reside without water.“ We can’t stay here without my household –”

Rafiq is wanting to cover his debt off. Presently, he has Dh28,000 kept in charge card re re re payments and that loan of Dh25,000. He states it’ll simply simply take about couple of years for him to settle just what he owes.

Paydays are especially tough. While his wage is Dh9,000, whenever Gulf News talks to him regarding the to begin the he has only Dh200 left in his account month. “I delivered cash, like Dh2,500 to my children for college charge, living, etc. And right here i will be having to pay around Dh2,000 for banking institutions and loan amounts. And Dtitle,000 for gas,” he explains. Then comes food and rent for himself.

How exactly does he handle? He’s running right through a borrowing maze. He explains: “Salary is total – including gas, accommodation – Dh9,000. At this time we don’t have hardly any money during my hand.

“What they did, RAK Bank, it absolutely was Dtitle7,000 bank card. Whatever they did was increase Dh4,000 within the card. Therefore I’m using that amount and from now on i’ve Dtitle,400 in my own card, that I have always been utilizing.”

He nevertheless has hope though, “Hopefully within the next couple of months we could save Dtitle,500, I quickly will deposit to my bank and perhaps into the future I’ll increase my income and I’ll call my children right right here.”

What type of loan suits you?

just exactly What you may not require?

You will find five kinds of borrowings that you could give consideration to predicated on the needs you have:


Do your homework.

Signature loans may also be called quick unsecured loans simply because they don’t need a security for approval. “The unsecured loan market into the UAE is mainly split up into salary-transfer and non-salary transfer loans, describes Ambareen Musa, Founder & CEO of

“Further, loans could be divided in to traditional and Shariah-compliant options, for expats or UAE Nationals, plus some banking institutions might also provide signature loans for employees of non-listed organizations (where in fact the company is not in the bank’s approved list),” she says.

Salary transfer loan:

It provides a lesser interest/profit price,

The borrower is required by it to move their income to your loan provider.

Non wage transfer

No income transfer requirement,

Prices could be two times as much or even more, states Musa, in comparison to the salary-transfer variation.


A loan that is conventional a mortgage that isn’t assured or insured by any federal federal federal government agency. This has a fixed price and time for payment.


Islamic Loans could be offered by various Islamic and main-stream banking institutions in accross the emirates. These banking institutions and their Islamic finance products are governed by independent Fatwa and Shari’a Supervisory Boards.

Papers necessary to apply:

UAE national ID card or perhaps a passport that is valid

Just in case the applicant is definitely an expat then the residency that is valid when it comes to UAE can also be required.

In the event that bank calls for an income transfer then the page of income transfer is likewise required.

Combined with papers mentioned previously the financial institution may require post-dated cheques for EMI (Equal Monthly Instalment) for protection reasons.


Plan out your borrowings – and repayments.

Trying to start your own personal company? Or isn’t it time to grow but end up straining at your financial allowance? That’s where company loan will come in handy.

Term loans: money provided now, become reimbursed over a predetermined duration. On line loan providers are your most readily useful bet in this situation with their processing time is swifter as it is the total amount being offered. The bad component? You will need a security that could be offered to cover down the debt in the event that you can’t get back the total amount over time. The interest rate can also be something to keep clear of.

Small enterprises loans: payment schedules vary with regards to the time you’ve held it’s place in business, its return price, you plan to use it for whether you want to use a flat or reducing rate and what.

Company personal lines of credit: a cope with an institution that is financial result in the creation of the tab – or of a credit limit. You are able to just withdraw funds as much as this degree and you also pay only interest about what you’ve withdrawal. This really is typically unsecured, but can rack up costs such as for example withdrawal and maintenance.

Gear loans: These could be employed to furnish your organization utilizing the gear it needs, The expression is produced through the calculation associated with product’s shelf life plus it in change becomes security. In this kind of situation, you may have to fund a advance payment.

Invoice factoring: Bills, bills, bills. In other words, money you may be owed, have actuallyn’t received, but they come in urgent need of. You might notice it to an invoice factoring firm that could then lead to the collection.

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