I WOULD LIKE TO TAKE A LOAN
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