Out of the total population of the UAE, a major portion comprises expatriates that relocate to the Emirates in search of better jobs, remuneration, and standards of living. Initially, when the expatriates move into the UAE, they face financial instability due to lack of a stable job which in turn leaves them with no option but to opt for debt via different sources. These sources primarily include high interest implicated lending tools like credit cards or online lenders that turn out to be helpful in the beginning but increases the chances of getting stuck amid repayments.
Apart from new expats a large number of UAE nationals as well as other expatriates opt for similar lending tools to make ends meet during the strokes of financial instability. When a debtor is unable to repay the due amount, timely there is an implication of interest and late fees over the principal amount which leads to accumulation of debts. Debt accumulation is a serious issue that can affect the credit score and financial solidity of an individual. Moreover, the financial institution i.e. creditor can file a legal complaint against the debtor in case of uneven repayments that can further lead to other severe problems.
When a debtor fails to settle their outstanding financial obligations, one of the most suitable ways out is debt consolidation. By the means of debt consolidation borrowers can settle their debts without struggling as these strategies are designed and developed in a way to ease the financial burden from the shoulders of the debtor via a personal loan in Dubai i.e. also known as debt consolidation loan in Dubai. In this thread, we will be sharing some important facts and nuances of consolidating debts via a personal loan in Dubai.
Personal Loan in UAE for Debt Consolidation
High-interest debts are stressful as they not only impact the credit score but also affect the long- and short-term financial goals of people. Opting for a personal loan in UAE to consolidate debt allow lenders to structure their EMI in one payment instead of various other payments with different deadlines. Ideally, when one opts for a debt consolidation loan in the form of personal loan in UAE all the debts are compiled into one single debt for which the repayment is made using the loan which makes it convenient for the debtor to deal with the debt. Once the payment is made by the debtor using a personal loan in UAE the total payment is broken down into the total number of lenders and is allocated their due amounts respectively. Another major benefit of settling debts via personal loans in UAE is that it makes it really easy to keep a track of repayments as the debtor is supposed to make a single instead of multiple payments.
When it comes to rates of interest personal loans are absolute bliss! It is most likely that the personal loan interest rate in UAE is less than the interest that you will have to pay over the debt. In such a situation where the rate of interest is high over the principal amount of the debt, choosing a personal loan in UAE to settle the outstanding debt is a wise decision. To enhance your savings on the payable interest rate you can verify and compare the interest rates of different lenders online. Doing so will reduce the interest thereby making it easier for you to settle the debt.
The repayment tenor of personal loans in Dubai is flexible varying from a time span of 1 year to 5 years which allows debtor ample time to manage their expenses and settle their outstanding financial obligations. When compared to original debt the repayment tenor is shorter and the associated terms and conditions are much more stringent which makes it difficult for the debtor to repay the debt. Having a well-versed idea of how much exactly is to be paid to the lender every month will make it easier for the debtor to plan expenses in a way to settle the debt as soon as possible with a personal loan in UAE.
Benefits of Opting for Personal Loans in UAE for Debt Consolidation
There are numerous benefits and features that make personal loans in UAE the ideal choice for Debt consolidation in UAE, Here’s a quick rundown-
- Quick Approval- Personal loans in UAE are unsecured loans that can be opted for managing a variety of reasons ranging from buying furniture to funding a child’s marriage. Keeping the urgent need of the loan seeker personal loans are approved quickly usually within a time span of 24 hours.
- Online Application- The majority of lenders that provide personal loans in UAE have online portals where loan seekers can submit an online application. Apart from there are numerous web aggregators that allow loan seekers to compare and get the best rate of interest on their personal loan in Dubai and the UAE. Applying for your loan online will make it easier for you to complete the process quickly without any hassle.
- Unsecure form of Loan- As mentioned earlier, the best part about personal loans in UAE is that these loans are unsecured and require no collateral. For a debtor going through financial turmoil, it becomes much easier and convenient to go for an unsecured loan instead of one that requires collateral.
- Flexibility- When compared to any other form of a loan, personal loans in UAE are probably one of the most flexible forms of loans. Taking into account the repayment tenor i.e. 1 to 5 years along with no requirement of collateral personal loans in UAE and Dubai actually turns out to be quite flexible.
- The facility of Foreclosure- Personal loans in Dubai and UAE allow debtors to foreclose the loan before the original tenor. In a scenario, where the debtor has enough funds to settle the loan, financial institutions allow the loan holders to make early payments so that the loan can be settled early making them debt-free.
Factors to Consider while Settling Debts Via Personal Loans in UAE
Although personal loans in Dubai and UAE appear to be one of the best ways to consolidate your debts, there are some important factors that are to be kept in consideration while you opt for personal loans to settle your debts. They are as follows-
- The tenure of your debts- Probably the first factor that is to be taken into consideration while opting for personal loans in UAE in order to settle debts is the actual tenure of the debts. One should assess and analyze the debts based on their period and if one concludes that they can be cleared with discipline and savings of a couple of months there is no point the debtor applies for a personal loan in UAE while settling debts.
- Credit Score- Your credit is one of the major factors that decide the amount of interest you’ll end up paying. If your credit score is average or good you will have to pay low rates of interest. Contrary to this, if your credit score is less than average, you’ll end up paying high rates of interest. Applying and opting for a personal loan in UAE to consolidate debts turns out to be suitable only if the rate of interest is reasonable. Therefore, debtors should thoroughly research the rate of interest while opting for personal loans.
- Repayment Term- The main reason why people opt for personal loans in the UAE is to extend the repayment tenor of the debt. Hence, debtors should lay emphasis on the repayment tenor while settling debts via personal loans in the UAE.
In a Nutshell
Overall, personal loans in UAE are viable options when it comes to settling debts. However, debtors should analyze their debts and consider numerous small and large factors while opting for personal loans to consolidate their debts in the UAE.