The introduction of digitalization in the industry of personal loan in UAE has made the process of availing the loan easy and absolutely hassle-free.
Most of the people now apply for personal loans online instead of visiting the branch of the bank or financial institution. This has helped in saving a lot of time in cases of emergency.
A few things are to be kept in mind when you apply for a personal loan in UAE, either online or at a lender’s branch or through phone banking.
The lenders have a certain criteria for deciding whether to approve your loan application or not. In case you have a time crunch, then go through these simple ways that may help you in speeding up your loan approval.
- Assessing your Needs
Before you make a decision of applying for a personal loan, make sure you have assessed your needs well. You should be aware of the loan amount you need along with the interest rate charged by the lender. This will help in speeding up your process of loan planning.
- Understanding and Meeting the Eligibility Requirements
Most of the lenders have set personal loan eligibility requirements in UAE, which you need to meet in order to be able to apply for the loan.
It might happen that you do have a great credit rating as well as a stable income. Yet you may fail to meet these common eligibility requirements, ending up saying bye to the possibility of getting a loan.
Before you start to apply for the loan, make sure you fulfil the requirements for the same. Here are a few personal loan eligibility qualifications that a bank or financial institution is looking for while approving your loan.
- Age limit (usually 21 to years in the UAE)
- Should have a bank account
- Salary transfer
- Should be a resident of UAE
- Should have a job confirmation with an employer that is approved by the lender
- Checking your Credit History
When the lender reviews your application for a personal loan in UAE, it checks your credit history through your credit report.
The better your credit history is, the more your chances of approval are. You can get a free credit report online that shows you your credit history. You should check for late payments or defaults (if any).
If you come across a recent history of late payments or unpaid fees, you might want to work on this before you apply for the loan. A better credit history won’t just increase your chances of loan approval, but might help you in getting favourable rates on your loan also.
In order to improve your credit history, make repay your outstanding debts regularly and try not to miss any payments. The lender first checks your most recent history. Hence, keeping a good record now might help you in increasing your chances of loan approval.
- Improving your Credit Score
Did you know?
Your credit score and credit history are related to each other. The credit bureaus use your credit history as a part of the information required to determine your credit score.
It is possible that you have an amazing credit history, yet you might not have an amazing credit score. If you haven’t check your credit score yet, go on and look for it on a trustworthy credit reporting agency online.
Once you are aware of your credit score, check with the bank or financial institution about the terms and rates offered to applicants as per their credit scores. In case you feel that a higher credit score would improve the probability of getting your personal loan approved, then take some time to review your credit report. Then, try to find out what is making your score go down and work on it to make quick improvements.
- Stable Income Source and Residence
Amongst the most dominant factors that affect your loan approval chances is your employment stability and living situation. When your application is checked by the lenders, they will confirm the duration of your residence at the current location.
The longer is your employment duration and the residence at the same location, the more are your chances of getting your loan approved.
- Demonstrating your Repayment Capacity
The most important aspect of your personal loan application is your loan repayment capacity. Even when you fulfil all minimum requirements, have a great credit history, an excellent credit score, have been a UAE resident for a long duration, and working with the same employer for quite some time, the lender will still consider your source for repayment of loan.
The concerned bank or financial institution will calculate your income against the expenses for determining if you have the ability to repay the loan or not. As compared to the expenses, the more income you have, more are the chances of your loan getting approved.
While you cannot get your income increased immediately, you may want to check your recurring expenses so as to find an opportunity of decreasing them before applying for the loan.
If by any chance you have an outstanding debt on your credit card, try to clear that debt first so as to remove it completely from the expenses.
- Be Transparent
Any lender would loan you money only when they trust that you will be able to honour all the aspects included in the agreement. The most simple and basic way of doing this is ensuring that you have been transparent with every personal information you have shared.
In some cases, the lender may also ask for some additional information. It is always advisable to comply in such situations. By doing so, you make them believe that there is nothing you have hidden from them. Hence, they will see fewer chances of you not repaying the loan.
- One Application at a Time
Most of you have this common belief that applying for a personal loan at multiple lenders will increase your chances of getting a loan. But is that so?
- It is not.
When you apply for a loan, the lenders before giving an approval dig out some information about you. They may end up finding the applications that you sent across to the other lenders.
The lenders may reject your application thinking that either you cannot manage your expenses well or you have planned some hidden motives. You need to be very careful about personal loan rejection reasons which are vary lender to lender.
- Take Loan from Reputable Lenders
There are a lot of lenders available in the market these days. While majority of these lenders are reputable, there are some scammers who want to take advantage of innocent people.
These fake lenders will sneak in useless clauses, which may result in making you pay very high interest rates and fees. Make sure you do a background check on your lender before applying for a personal loan in UAE to avoid this situation.
To Sum Up!
Although applying for a loan seems to very easy, it is not really a child’s play. Ideally, not all loan applications are approved, some may get rejected to. This article contains some tips which will help in boosting the probability of getting your personal loan approved easily and quickly.