In UAE, the population comprises approximately 80% of expatriates who are migrated to get a better job and to improve their financial situation. When expatriates do not have any fixed job or any other source of income, they take personal loans or use credit cards to manage their expenses. To ease their loan’s repayment, opt-out to be debt consolidation.

Debt consolidation is a way to help you to get over the burden of financial obligations conveniently. However, people have lots of doubts about debt consolidation. To clear those doubts, here given a description that you need to know, such as qualification criteria for debt consolidation.

Debt Consolidation

Debt consolidation is the process of merging numerous debts into a single debt. This will simplify your repayment via a management program or loan. The debt consolidation idea is very effective when you have to deal with high-interest debts like personal loans and credit cards.

Benefits of Debt Consolidation

  •       Lowered rate of interest as compared to the other
  •       Potential boost your credit score
  •       Make debt repayment easier and simple
  •       Gives you stress relief mind
  •       Fixed Repayment timeline, therefore easy to know the deadlines of payment
  •       Lock in a low rate and understand the exact amount of monthly payment
  •       Efficient to manage
  •        A lesser amount of capital spent per month to consolidate debt

Debt Consolidation Loan

The most convenient method of consolidating debts is to apply for a loan from a financial institution and an online lender. The debt consolidation loan is equivalent to the total amount of debt. The duration of repayment varies from 3-5 years.

Debt consolidation loans are the special type of personal loans and credit cards in the UAE. It will help people who are stuck in debt. Even if you have multiple debts consolidation, merge your all debts into one and also turn into one instalment per month. This will eventually settle the debt.

Documents Required for Debt Consolidation

If you are going to apply for a debt consolidation loan, you must have the following documents:

  •       Completed Application Form
  •       Copy of a Valid passport
  •       Valid Emirates Identity Card ( original must also be present)
  •       Salary transfer certificate from employer
  •       Bank statement of the previous 6 months or salary slip
  •       Resident Visa Proof

The applicant should provide all the documents required. If you are failing to submit a single document may lead to the rejection of a consolidation loan.

Qualification Criteria for Debt Consolidation

Every bank and financial institution has its own qualification criteria, so we need to be checking each institution individually.

However, some basic requirements as given below:

  •       Never exceed Debt to Burden Ratio (DBR) more than 50%
  •       Most of the banks need a salary transfer certificate
  •       Must have UAE residence proof ( Residence visa only for expatriates )
  •       The minimum salary must be AED 7000 for approved companies and AED 10,000 for unapproved companies
  •       The loans you have to consolidate must be in UAE
  •       Minimum 6 months of service or confirmed with current employer
  •       Must have valid documents (given above) required to apply consolidation of debt

 List of Banks Offer Debt Consolidation Loans in UAE

The following are some of the banks in UAE that offer debt consolidation in the UAE. The features of each bank are different. Here, the corresponding features of each bank have been given. This will help you to opt most suitable bank for your debt consolidation.

1.  Abu Dhabi Islamic Bank [ADBI] 

Features:

  •       Low – Interest rates and begins from 3.44%
  •       You will get a grace period of 90 days for your first installment
  •       No processing fee
  •       Can be postponed two installments for every year
  •       High Finance amount of up to AED 3000K
  •       Provide job loss protection
  •       Fast approvals
  •        The minimum salary should be AED 8000
  •       Loan Amount 3000 K

Benefits

  •       Free credit cards
  •       No processing Fees

    2. First Abu Dhabi Bank [FAB] 

Features:

  •       Provide a Long repayment  period of up to 144 months
  •       Minimum interest rates begin from 5.12%
  •       The applicant must be a UAE National and he has a debt burden higher than 50% of their monthly salary
  •       A salary transfer letter is mandatory
  •       The minimum salary should be AED 10,000
  •       Loan amount AED 5000K

    3. Mashreq Bank Debt Consolidation Loan

Features:

  •       Up to 48 months of Maximum repayment duration
  •       Higher loan amount
    • AED 1 Million for Expats
    • AED 3 Million for UAE Nationals
  •       The salary transfer letter from the employer is mandatory
  •       The minimum salary should be AED 5000
  •       Loan Amount AED 3000 K
  •       Up to 120 days of Deferred payment period

Benefits:

  •       Lower monthly payment
  •       Increased disposable income
  •       Reduced interest payments

4. Standard Chartered Bank 

Features:

  •        The minimum salary should be AED 30,000 per month
  •       Age limit – 21 to 65 years
  •       For UAE Residents who are working for a company approved by Standard Chartered
  •       Bank statement of previous 3 months
  •       Salary certificate is compulsory
  •       Salary transfer letter should be in SCB format