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Personal loans in UAE: What are the eligibility criteria for expats?

As per the Central Bank of the UAE, individuals may apply for a personal loan secured by the borrower’s salary and end of service gratuity

Published: Sun 25 Feb 2024, 2:22 PM

Updated: Sun 17 Nov 2024, 5:05 PM

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Banks in the UAE offer countless options for expats to take loans. From education loans for students to co-applicant programs that family members can take together, the pool is very diverse. Many institutions are also offering quick online options for those looking to borrow money.

When it comes to personal loans, as per the Central Bank of the UAE, individuals may apply for a loan secured by the borrower’s salary and end of service gratuity, or any regular income they have from a well-defined source.

From eligibility criteria to rules for banks and applicants, here is how expats can take out a personal loan in the UAE.

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Are you eligible?

Age: Applicants must be 21 years of age to apply for a personal loan in the UAE. The maximum age to apply is between 60-65 years. Some banks may allow 18 year olds and above to apply for a loan.

Minimum income: An individual's minimum income should be between Dh5,000-8,000, depending on the financial institution.

Employment status: Applicants must show proof of employment and must be working for at least 6 months with a confirmed salary.

Credit score: Banks require a credit report to check if there are any active loans taken by the applicant, as well as checking their credit history. A good credit score means the borrower is capable to repay the loan.

Documents required

  • Copy of Emirates ID
  • Passport and visa copy
  • Bank statement from 3-6 months depending on the requirement by the bank/ financial institution
  • Salary transfer certificate

Rules for borrowers, banks

  • As per the Central Bank of the UAE, personal loans cannot exceed the value of the borrower's salary by 20 times. Banks and financial companies authorised to give loans must ensure that this limit is not exceeded.
  • Borrowers are required to repay the amount within 48 months, against a monthly deduction of no more than half the borrower’s salary.
  • Some banks may offer loans up to Dh5 million, depending on their policies and the customer's fulfilment of requirements.
  • If a loan or a banking facility's repayment period extends to the retirement age, banks must ensure there is a deduction of only 30 per cent of the income or salary.
  • Banks and finance companies cannot take post-date cheques from customers that exceed 120 per cent of the loan's value or debit balance.
  • Banks in the UAE are required to calculate and declare the interest rate charged on loans based on reduction of the loan balance on an annual basis.

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