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Q I would like to understand my loan eligibility. My salary is Dh12,000 and I have a car loan. But I would like to take an­other loan as I have some pend­ing fi­nan­cial com­mit­ments. Do I still have po­ten­tial to bor­row some more money? My wife and I are work­ing. What is your ad­vice?

AEli­gi­bil­ity for the new loan would de­pend on your cur­rent monthly out­flow and to­tal house­hold in­come. Con­versely, you need to have a cau­tious ap­proach when ac­cess­ing the credit ap­petite. Se­condly, it de­pends on the type of loan you are con­sid­er­ing – is it a per­sonal loan, home loan, car loan, as ev­ery lender has a set bench­mark for qual­i­fy­ing the bor­rower ac­cord­ing to the re­quire­ment. Hence, first iden­tify which cat­e­gory of loan you plan to ac­cess.

Once, that is done do some re­search on dif­fer­ent mar­ket lenders.

Since you and your spouse are work­ing, you have the op­tion of com­bin­ing the in­comes. This means you can ask the bank to pool both of your in­comes and de­cide the terms for the loan re­quire­ment.

With this op­tion, you can utilise the big­ger fi­nance to value (FTV) per­cent­age and might in­flu­ence the eligibility cri­te­ria (if the bank has a se­lec­tion to com­bine the salary)

In the UAE, banks have a better rate and term op­tions if the bor­rower has the op­tion to trans­fer his/her salary to the bank from where you are tak­ing a loan.

This gives the banks a sense of se­cu­rity and the abil­ity to mon­i­tor the on­go­ing cash flow in the ac­count.

To check the eligibility, banks would re­quest the stan­dard doc­u­men­ta­tion, in­clud­ing the lat­est bank state­ment, salary cer­tifi­cates, per­sonal iden­tity ev­i­dence doc­u­ments and a li­a­bil­ity dec­la­ra­tion.

Keep a close watch on fi­nance if you are plan­ning to take the loan and make sure you have a healthy credit rat­ing to make the process smooth.

Banks have a better rate and term OP­TIONS if the bor­rower has the op­tion to TRANS­FER his salary to the BANK from where you are tak­ing a loan

DHIREN GUPTA man­ag­ing di­rec­tor of 4C Mort­gage Con­sul­tancy, is a fi­nan­cial ex­pert

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