How to apply for a personal, car or home loan in the UAE?


Dubai: Moving to the UAE can often be an instant upgrade in one’s lifestyle – from a safe community to state-of-the-art infrastructure, the country has a lot to offer residents. Add to that an easy availability of loans and you have yourself a very tempting mix. From buying a brand new car to going on your dream holiday, everything can be funded through banks. However, it is important to borrow wisely as it is also quite easy to get stuck in loans that you are unable to repay.

Here, we break down all that you need to know to apply for a loan in the UAE.

What kind of loan are you looking for?

While there is a slew of options for customers, loans can broadly be categorised as …

  • Personal loans
  • Auto/car loans
  • Home loans/mortgage
  • Business loans

However, before you begin the process of applying for a loan, there are certain eligibility criteria that you need to consider. Banks evaluate the credit worthiness of an applicant based on income, credit score and debt burden ratio, so know what these terms mean before applying for funds.

What is a credit score?

It’s a three-digit score assigned to an individual that plays an important role in deciding one’s eligibility for a loan or credit card at the bank. The higher your credit score the more benefits you can enjoy like faster processing, less paperwork, low interest rates, high loan amounts and credit limits.

The Al Etihad Credit Bureau (AECB) provides the credit report, which includes the credit score of an individual. It collects financial information of an individual from various sources and generates a report by analysing the details.


The credit score ranges from 300 to 900. The higher the score, the higher the probability of getting a loan approved. Usually, a credit score above 700 is considered good. A score below 400 is most likely to be turned down by most banks. If your credit score is somewhere in between the two, you can improve it as well. If you miss payments on existing commitments, like credit card payments or your electricity bill, these can have a negative effect on your credit score.

So, before applying for a loan, make sure your credit score is good to avoid rejection.

What is a debt-burden ratio?

Another factor that can have an effect on your loan eligibility is your debt burden ratio (DBR). Central bank regulations makes it mandatory that one’s DBR should not exceed 50 per cent of his/her total monthly income. DBR calculations include installments on all existing loans including personal loans, auto loans, credit card limits and other loan products.

How to find your DBR

DBR = [All loan installments + installment-based credit taken on credit cards + 5 per cent of the total limit on all cards] as a percentage of total income.

Consider this example, if you have two loans with a total of Dh1,500 monthly instalment and your credit card limit is Dh20,000 and your salary is Dh10,000, then your DBR will be 25 per cent.

That is 1,500 + 1,000 (which is 5 per cent of 20,000)/10,000 = 0.25*100 = 25 per cent

How can I get my credit report?


You can get your credit report online, here or by downloading the Al Etihad Credit Bureau app. It and will cost you Dh140 for a credit report with score.

Personal loan in UAE / Personal loan in Dubai


Personal loans are also known as unsecured loans because they don’t require a collateral for approval.

The bank may or may not require that you transfer your salary to the account. Another aspect to look at is whether you company is on the approved list of companies for the bank. Some companies that have a history of late payment of salaries, for example. Some banks only provide personal loans to employees of companies that are on the approved list.

If you do choose the salary transfer option, it could offer you a lower interest or profit rate.

For no salary requirement, rates can be twice as much or more, according to experts.

Interest rate for personal loan in UAE : 

Flat interest rate starts from 2.90% and goes up to 6% depending upon your salary, Loan amount. Different bank have different interest rates. Details of different loan rate mentioned below:

Bank Personal Loan Minimum Salary Reducing interest rate Flat rate
dubai islamic bank personal loan rate Dubai Islamic Bank Al Islami Goods Finance for UAE Nationals AED 3,000 10.97% 6.00%
Dubai Islamic Bank Al Islami Salaam Finance for UAE Nationals AED 3,000 10.97% 6.00%
RAK Bank Personal Loan interest rate RAK Bank Personal Loan AED 5000 9.99% 5.43%
citibank personal loan rate Citibank Personal Instalment Loan AED 8,000 17.99% 2.63%
Citibank Salary Transfer Loan AED 8,000 8.00% 4.99%
adib personal loan ADIB Personal Loan For UAE Nationals AED 5,000 6.75% 3.72%
ADIB Personal Loan for Expats AED 5,000 6.99% 3.85%
abu-dhabi-commercial-bank ADCB Personal Loan for UAE Nationals AED 5,000 5.49% 2.90%
ADCB Personal Loans for Expats AED 5,000 5.49% 3.03%
hsbc personal loan rate HSBC Personal Finance AED 7,500 5.99% 3.3%
cbd interest rate on personal loan Commercial Bank of Dubai Personal Loan for Expats AED 12,000 5.99% 3.27%
Commercial Bank of Dubai Personal Loan for UAE Nationals AED 12,000 5.75% 3.14%

*Interest Rates are subject to change at any time.

9 Best Personal Loans in UAE for 2020

  • ADIB Personal Finance.
  • ADCB Personal Loan.
  • DIB Personal Finance.
  • RAK Bank Personal Loan.
  • Emirates Islamic Personal Finance.
  • FAB Personal Loan.
  • Emirates NBD Personal Loan.
  • HSBC Personal Loan.
  • Citibank Personal Loan

Documents required to apply for personal loan in dubai:

  • Emirates ID and valid passport with valid residence visa.
    If the bank requires a salary transfer then a letter of salary transfer will also be needed.
  • The bank may ask for post-dated cheques for EMI (Equated Monthly Instalment) for security reasons.
  • Latest 3 months Bank statement with salary credits

Am I eligible for personal Loan in UAE?

Every loan has a minimum monthly salary requirement, and for personal loans you can get upto 20 times your salary with certain upper limits that can vary from bank to bank. The loan limit can also change based on whether your employer is on the approved companies list.

Interest rate can either be fixed or charged on a reducing balance. What does that mean? Variable rate is lower compared to the fixed rate. Since this is charged on the reducing balance, you pay less amount of interest for the first 6 months, when your principal loan amount is high, thus saving more.

Approvals can take anywhere between a day to a couple of weeks, depending on the paperwork.

Note: Some banks may not allow customers to take a home loan to fund the down payment of a property purchase. Speak to your bank to find out if you would like to take a personal loan for this purpose.

Car loan in UAE


A car loan is essentially a personal loan, with the car mortgaged to the bank. For these types of loans in the UAE, you must have a salary of at least Dh3,000.

Documents needed

  • Application form for the car loan including vehicle quotation
  • Valid visa
  • Driving license
  • Salary certificate/proof of income
  • Bank statement (three to six months depending on the bank)
  • Partnership certificate in case of partnership in business
  • Applying for these loans is relatively easy and most car dealerships have a panel of banks that they deal with. If you take a loan from one of these banks, the paperwork is managed by the dealership.

Home loan in UAE

Home loans or mortgages perhaps have the most detailed process, with several approvals and insurances required to get a loan approval.

For residents looking to buy a property in the UAE, banks offer loans that cover 75-80 per cent of the property value at the most. The rest has to be paid as down payment by the customer.

Documents needed

  • Emirates ID, passport and visa copy
  • Proof of income for salaried individuals.
  • Photocopy of trade/commercial license for self-employed inviduals.
  • Copy of allotment letter (the developer issues the allotment letter, which includes details of the property)
  • 3-6 months bank statements
  • Buyer Agreement
  • Proof of funds

If you are lucky enough to have a working spouse, then it is advisable to transfer all savings into one bank account.

You can provide details of this bank account on your loan application as evidence that you have enough savings and have prudent saving behaviour.

Apart from the regular documents, you will also need the following:

  • Pre-approval from the bank
  • Life insurance
  • Property insurance

Pre-approvals from banks would help you determine your eligibility for a Home Loan before you decided to finalise a property. When you are shopping around for the right mortgage, you can request for a pre-approval from banks, which would cost you around

Dh2,000. However, this will help you make a more informed decision on the mortgage that is offering you the best rates. Also, applying for pre-approvals does not affect your credit rating.

Life insurance and property insurance are mandatory for property purchases in the UAE and if you do not wish to take these policies from the same bank, you can always contact insurance providers for the best offers.


The loan process will take at least seven working days subject to submission of all required documents.

Business loan in Dubai


Whether you are looking to expand your business or start a new one, business loans are provided to small and medium-sized companies to meet their business requirements with minimal and hassle-free documentation. Within business loans there are several options that you need to look at. Whether you are looking for cash to increase your liquidity or need to finance the purchase of certain equipment, banks have various options available for businesses.

Documents needed:

  • Filled in the application form.
  • Partnership agreement/Power of Attorney (POA)/ Article of -Association/Memorandum of
  • Association (MOA).
  • Trade license (copy).
  • Bank statements.
  • Passport (copy).
  • Other valid documents (varies bank to bank).

Additional charges

Apart from the loan amount and interest, there are several processing fees that you need to keep in mind when budgeting repayments.

Processing fees – This is a one-time fee that is levied by the bank and is often non-refundable, even if the loan does not get sanctioned. The fees can vary based on the bank you deal with.

Insurance fees – Most banks also have loan protection insurance or additional insurance requirements like life or property insurance, depending on the type of loan you might be applying for.

Installment deferral fees – If you are unable to make a payment on time, you would need to request for an installment deferral, which comes at a cost. Most banks offer two installment deferments per year.

Early settlement fees – If you are in a position to settle your loan before the stipulated time, you can do so but would need to pay an additional fee., However, these may actually be minimal (1 per cent of the repaid amount or Dh10,000 whichever is less) compared to the interest you save on repaying the loan sooner.

Apart from these tips, it is always recommended that you take the time to read the terms and conditions carefully, to ensure you do not sign yourself up for a contract that you cannot fulfil. Also, even if you are in urgent need of a loan, make sure you look for the best option and the lowest interest rate on offer. Apart from these steps, always keep a buffer amount in place for a rainy day. Experts advise individuals to have enough money for at least six months of installments as savings in the bank.


Please enter your comment!
Please enter your name here