Several financial institutions in UAE offer personal loans to individuals who fulfil the eligibility criteria. These loans have several benefits and are easy to avail too.
Key Benefits of Getting a Personal Loan
To know more about the personal loan benefits, the following points can be helpful:
Flexibility and Versatility
Unlike an auto loan or a house loan, where the loan amount needs to be used for purchasing a new car or a home, personal loans come with no such fixed requirements. A personal loan can be used to fund a wide range of personal expenses such as consolidating high-interest debts, buying appliances and home decor items, funding a wedding, paying school fees, etc. Hence, these loans are versatile and flexible, as their usage is not limited only to a particular purchase.
Low Interest Rates
Most financial institutions such as banks offer personal loans at attractive Annual Percentage Rates (APR). These rates are however not constant and can vary from bank to bank and the individuals profile. They may also depend on the repayment tenure that the individual has selected. Individuals who are looking to borrow for longer tenures can opt for personal loans. However, for smaller loan amounts and shorter repayment tenures (for example, less than 6 months), individuals can explore credit card loans.
No Collateral Requirement
Where most other types of loans require individuals to pledge a collateral for availing the loan, most personal loans do not come with such terms and conditions. Additionally, the loan amount is also approved by several banks without the requirement of any lengthy paperwork. However, some banks may require customers to submit security cheques.
Easy to Manage
Typically, personal loans in UAE do not come with variable interest rates. This means most of them have fixed interest rates and thereby fixed Equal Monthly Instalment (EMI) amounts too. As a result, individuals can adjust and manage their monthly budget according to the fixed Equal Monthly Instalments amount.
While there are several benefits of a personal loan, there can be some challenges too, which individuals may want to look out for. Missing out on monthly payments may lead to late-fee penalties, credit bureau ratings getting negatively impacted, and it may also limit the individuals ability to get further financing. Additionally, early settlement and partial prepayment may be subjected to a one-time charge.
Personal loans can be an ideal option for individuals who want extra funds to fulfil their urgent monetary requirements or even otherwise. So, those who wish to apply, instead of visiting a bank, can choose to apply for a personal loan online. Borrowers, before applying for a loan, can use a personal loan calculator to get an estimate of the Equal Monthly Instalment amount that they may have to pay against the loan amount that they want to apply for. Doing so can help them budget their expenses better.
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