Guide to choose the right Personal Loan for you


You don’t want to compromise on anything when it comes to making it special- Whether it be a wedding, family holiday or buying a car. It's obvious, you need money to achieve what you want. People often need more than their earning capacity to make it an auspicious. Here where the loan comes in picture. People opt for loan option to meet such desires.
With so many options in the market and cunning options coming at your doorstep, it can easily lead to the attracted side of the loan but may later show its biting teethes.
Often your purpose and need will determine which loan to go for. And before just sticking to one loan, go for other loan options. Here the simple thumb rule is- ‘compare, compare & compare’. Use smart comparison tools to identify the perfect product as per your needs.

Interest rate

·       Find loan with low-interest rate in which you fulfill their criteria
·       Keep the greed aside. Don’t get pulled by the interest rate that looks good. Sometimes good can turn evil for you. Do your research to find the hidden cost.
·       Ensure whether ‘flat’ or ‘reducing’ interest rates are being stated and more to the point and understand the difference. As per the myth, flat interest rates are normally lower than reducing balanced rates and can lead to misleading. Therefore, when it comes to evaluating various personal loans alternatives, the best way to compare their principal cost is to convert everything into the common reducing interest rate.

·       Some banks offer very low rate with a hidden truth. They give you the concession on a particular period which may apply for one year only and later increases their rate of interest.

Islamic or Conventional finance

·       There are banks which buy and sell Islamic finance products to their customers at a decided profit after paying monthly installments for some period. Customers are not charged rate of interest on it.
·       In a meanwhile, some customers may wish to choose Islamic finance products for moral reasons, as the Islamic financial market has matured, the differences between Islamic and non-Islamic loan products have narrowed considerably. We suggest you compare Islamic and non-Islamic loan product directly and select wisely which will benefit your individual purpose or need.

Your bank or another

·       If you take the personal loan from the bank in which you hold your salary account then there are various benefits you will receive along with your loan. Don’t just go with this guesswork, explore your bank whether there are such benefits or other bank is providing you better benefits.

Loan Amount
·       Banks in UAE have different maximum loan limit as per your minimum salary. Select the banks which provide you the best option as per your salary.
Fees
·       Arrangement fees? Whether the arrangement fees are fixed or depend on the percentage of your total loan amount?
·       Processing fees?
·       Settlement fees?
·       As per the UAE Central Bank regulations, the fees and charges are closely associated with loans. For Example, Early repayment fees cannot exceed 1% of the outstanding loan amount but some banks may charge less than this. So if you in a position to pay loan early, then take this calculation into account.
·       What are the penalties for paying late?



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