Personal Loan Eligibility in UAE: How to Compute for It

One of the best ways for salary earners to get a financial institution to fund their needs is by getting personal loans. Personal loans can help you finance your dream holiday, fund a long-term investment, or even start a business. This allows you to have enough finances without waiting to build a minimum savings in your account. 

Personal loans help draw down your future income, but it requires you to be extra responsible since you repay your lender according to their loan contract and terms. Without a proper understanding of your loan eligibility, you may end up borrowing too much and create a bigger debt. That's why it pays to know the different regulations introduced by the Central Bank of UAE.

If you're looking to invest in Dubai or buy property, you may need personal loans. But before you jump and make that move, you should know the different factors that could help you calculate loan eligibility. 

What Factors Do I Need to Consider?

There are three things that you need to consider when it comes to computing for your loan eligibility. First, you need to factor in your salary amount and salary transfers; next are your debt burden ratio (DBR), and finally, your credit score. 

Will My DBR Decide if I Get a Loan?

When you look at all three factors, the most important that you need to consider is your debt burden ratio or DBR. This is a key eligibility criterion that plays a huge role when applying for a loan. Essentially, your DBR tells your lender your current debt burden as percent of your current income. With this view, your lender gets a better understanding of your total earnings. 

Based on central bank regulations, your DBR mustn't exceed 50 percent of your total income. This includes other installment loans, such as auto loans, credit card limits, personal loans, and other loan products. 

So if you're thinking of buying property or investing in Dubai, you need to know that you're financially capable of repaying your debts first, especially since these two financial moves are huge commitments. 

How Do I Compute for My DBR?

To get your DBR, here's what you should do:

DBR: [All installments + installment-based credit + 5 percent of the total limit on all cards] as a percentage of total income. 

So, for example, if you have two loans with a 1500 monthly installment, and you have a credit card limit of 20000, and your salary is 10000, your DBR is 25%. 

1500 + 1000(5 percent of 20000)/10000 = 0.25*100 = 25%

The Bottom Line: Knowing Your Personal Loan Eligibility Can Help You Make Wiser Financial Decisions

While computing for your DBR can be daunting, you must do so to make smart financial decisions. That's why if you're looking to invest in Dubai, working with a reliable property agent can help you manage your cash, allowing you to build your confidence in the market. 

How Can We Help You?

Dacha Real Estate was founded in 2004 and has become the top property agency in Dubai. With years of high-quality real estate experience, we provide comprehensive and customizable management services that fit each clients' needs. 

If you want to be a key player in the industry and invest in Dubai, reach out to us today!