The interest rates on personal loans recorded a stability that ranges between 3 and 4% constant, according to the value of the salary since the beginning of the year until now, while real estate financing prices declined due to weak demand, supported by the repercussions of the Corona virus, according to sales and bank officials, along with information gathered by «Emirates Today »Among the customer service centers in five banks are: Abu Dhabi Islamic Bank, National Abu Dhabi, Dubai Islamic, Emirates NBD, and Emirates Islamic Bank.
In detail, the Personal Finance Officer at a national bank, Salik Kumar, said that “the interest rates on personal loans differ from one bank to another, and they are calculated according to the value of the customer’s salary. For example, if the salary is between 15 thousand and 20 thousand dirhams, interest is calculated at 4% Almost, if the income is between 20 and 30 thousand dirhams, it is about 3.5%, and if it is higher, it will decrease by 25 points to half a percent.
He showed that the cost of funds somewhat decreased due to the main interest rate cuts, but the banks have a minimum that cannot be relegated to calculating interest, in order to achieve a reasonable margin that covers the costs and makes profits.
In the same context, the director of the personal finance department in an Islamic bank, Nora Sallam, said, “The financing price is currently between 3 and 4% unchanged, where demand is quieting for new loans due to the outbreak of the Corona virus, and many customers abandoned any plans. At the moment to borrow. ”
It showed that "it is difficult to bring down the interest rate from 3.48%, in the absence of a large demand that compensates for the reduction in interest, so banks are keen on a minimum that achieves profits."
She added that «banks are trying to compete to reduce transaction or insurance fees, or give the customer a period of two to three months before the start of payment, but the financing price is close and stable during the past five months.
In turn, the banking expert, Saddam Muhammad, said, "There are interest discounts offered by the banks to citizens between 0.5% and 0.75%, but these differ according to the value of the salary and also from one bank to another," noting that the number of years the customer spent in his job And the nature of the business, whether governmental or private, also makes a difference, but the situation has been largely stable since the beginning of 2020 until now.
For his part, real estate finance expert, Ahmed Arafat, said, "The demand for real estate finance has declined since the beginning of the Corona crisis, so the interest rate has decreased to 2.75%, while some banks have made offers up to 1.99% for specific projects in Abu Dhabi."
He added, "There are also reductions in real estate transaction fees by banks to stimulate demand."
For his part, the banking expert, Muhannad Awni, said that "the real estate market has many opportunities for investment, in light of the price declines, in addition to the low price of bank financing," noting that interest rates on real estate loans in most banks start from
2.75%, and competes in fees, insurance, and others. He pointed out that the banks finance up to 85% of the value of the property, after the recent decision of the Central Bank to reduce the down payment to the customer, whether for the citizen or the resident.
He explained that the spread of "Corona" negatively affected the demand, and this is what prompted the banks to make offers and cuts, to move the funding and restore momentum to the market.
- Interest rates on personal loans vary from one bank to another, and are calculated according to the client's salary.