The decision was made on Tuesday by the UAE Central Bank…
31 October 2018| Last updated on 31 October 2018
For those who live in the UAE and wish to obtain personal loans, here’s what you should know
Personal loans pertaining to retail-banking have been amended by the UAE Central Bank on Tuesday.
The new rules set in place are applicable to all personal loans and services provided to individuals in Dubai.
The Central Bank has set up amended terms and conditions for the transfer of personal loans and finances from one bank to another or finance company to another.
And now banks and finance houses will have to do the following:
- 1. Reduce the interest rate
- 2. Not increase the period loans
- 3. Not increase the loans for retail and individual customers
UAE banks and finance companies can also accept the transfer of personal loans under certain conditions – given that they follow the new rule, loan amount rule, duration of repayment rule and monthly instalment rule.
And if any loan was made prior to this new law, the banks and finance houses must reduce the interest rate and not increase the repayment period.
UAE’s Federal Laws
Article 20 of the UAE Federal Law No 10 of 1980 for the Central Bank has now been amended to include:
"Any borrower is entitled to transfer his personal loan/financing from any bank or a finance company operating in the country in return for an early repayment commission not exceeding 1 per cent of the remaining amount of the loan, or Dh10,000 whichever is less."