By 1.99% for citizens, and 3.4% for residents
Banks compete to reduce interest on personal loans
Lending incentives include exemption from administrative fees and insurance.
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Ahmed Youssef: "Investment alternatives to employing banks' liquidity are declining, and lending to individuals is the currently active sector."
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Despite talk about raising the main interest during this March, banks operating in the country are competing to offer offers on personal loans, including reducing the interest rate, as well as exemption from administrative and insurance fees, and a grace period in payment of up to four months, in addition to postponing the installment twice a year.
According to information collected by "Emirates Today" from six banks: Abu Dhabi Islamic, Abu Dhabi Commercial, First Abu Dhabi, Ras Al Khaimah National, Dubai Islamic, and Emirates NBD, the interest rate starts from 1.99% (fixed) for citizens, and starts from 3.4%, and 4 .99% for non-nationals.
Some of these banks raise the ceiling of competition, in addition to reducing the financing price, to include the granting of an advance salary and overdraft facilities, such as Ras Al Khaimah Bank, while Abu Dhabi Islamic Bank offers a Nissan Patrol car draw and a prize of 20 times the salary.
Meanwhile, First Abu Dhabi Bank offers citizens an offer on personal loans, which includes besides reducing the interest rate, installments of the insurance amount estimated at 1% of the loan value, without any interest.
Most banks compete in granting a reduction in interest, according to the value of the salary and after studying each case on a case-by-case basis.
For his part, the banking expert, Ahmed Youssef, said, “Depositors feel safe about the banking sector in the UAE, so banks have large amounts of liquidity, which they are trying to employ in their main operating activities, and in lending to individuals, as they are largely guaranteed, and the risk ratio It is low, due to the guarantees provided, whether salary, personal income or end of service benefits.”
Youssef added, “Banks’ competition to reduce interest rates on personal loans does not conflict with the main interest-raising trends, as there are accounts set by banks in general, with regard to the cost of money they lend, whether by attracting more deposits or issuing bonds or Reducing costs, and all of this gives it a space to move flexibly, in terms of presenting offers on its products to compete in the market.”
He continued, "The investment alternatives to employing banks' liquidity are somewhat declining, and individual lending remains the currently active sector, and it is in its interest to provide advantages and discounts to attract more borrowers."
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