Several banks in the United Arab Emirates have announced offers to purchase customers' "debts" from other banks. These offers include receiving 50% of the salary, a cash gift after transferring the debt and depositing the salary for three months straight, as well as a complete waiver of administrative fees, insurance fees, and the option to postpone repayment for up to three months.
In accordance with these banks, the interest rate on personal loans starts at a declining 4.7% and fluctuates depending on the customer's wage and citizenship status.
Fix "interest"
In order to lessen the burden of "interest" on dealers, banker Salik Salim told Emirates Today that the current competition is to buy existing debts by lowering the interest rate to the lowest profit margin that the bank can sustain. This is done in addition to a complete exemption from all fees of any kind, including transaction fees and insurance.
The rates that banks supplied to their customers were impacted by the rise in the main interest rate during the past 18 months, he continued, and they increased in practically all loans. Therefore, banks turn to pleasing the customer and luring him with offers like providing him a cash bonus while transferring his pay or postponing its installments for a convenient time.
discerning approach
We discover that "financial stumbling blocks" have decreased, as well as debt allocations that are made, as Selim stated that banks have become more selective in choosing the dealer whose debts are bought and that he has a good credit history, works for a listed entity, and other applicable conditions. Because it was lower than the prior one, banks spared it.
Salim stated that bank offers on personal loans and the purchase of debts have been active since the start of Ramadan and will continue over the following two months to meet the needs of dealers looking to pay the last of their student loan installments as well as the season of travel and vacations.
Given that the majority of employees already have bank commitments, he emphasized that the demand for new personal loans is only seeing a modest increase. The alternative, he said, is for the bank and the consumer to purchase "debts" and take a break from monthly payments.
