Moving to and living in a different country is an exciting opportunity; however, it comes with plenty of logistical challenges. One of the most significant considerations that expats have to make is where to do their banking and how they are going to afford the move and any additional expenses.
Taking out a personal loan to help settle down into your new life, or to enhance the experience you are currently having, is a fantastic option — as long as you choose the right bank and the right loan.
1. Understand the different types of personal loans
There are a wide range of reasons why an individual may choose to take out a personal loan. Some of the most common reasons for taking a personal loan are debt consolidation, home remodeling, emergency expenses, consumer durable purchases (furniture and electronics), educational expenses, jewelry, wedding expenses, vacation costs, and other large purchases.
As an expat in the UAE, there is a good chance that you are experiencing similar scenarios that make getting a personal loan a desirable option. The Commercial Bank of Dubai (CBD) offers several different salary transfer personal loan options for expats, including:
New personal loan
Top-up of existing personal loan
Transfer of the personal loan from another bank (with or without topping up the loan amount)
These loans are available for salaried expats who receive their paychecks from employers that are on the approved list of CBD employers. To qualify, you will need to be a confirmed employee and with a minimum of six months of service with your employer, with a total monthly salary of more than AED 8,000. Even if you are a new expat, as long as you meet these criteria and CBD approves your employer, these personal loans are an option for you.
In all of these cases, the personal loans granted by CBD are to be used for personal use and are repaid through deductions from the individual’s salary. For this reason, your monthly salary must be transferred to your account with CBD.
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You can apply for the personal loan instantly and conveniently through the CBD Mobile app and all you need is a valid Emirates ID. You will be instantly informed if you are eligible for the loan and you have the flexibility to change the loan amount or the duration of the loan and once confirmed, the amount will be credited into your account instantly in a matter of minutes.
Please note that you will need to make regular monthly payments until you have repaid the loan. As stipulated by the Central Bank, the maximum tenor is 48 months. For these loans, the minimum age requirement is 21 years, and the maximum age is 60 years at the last instalment due date for expats.
While there are many great reasons to take out a personal loan, you still need to consider how much you can afford to borrow and pay back. After all, taking out any type of loan is a significant financial responsibility, so you want to make sure you are approaching it responsibly.
When calculating what you can afford, it is important to keep in mind that just because you can cover the monthly payment, it doesn’t necessarily translate to it being affordable for you. In many cases, individuals are living in homes or driving cars that they can’t truly afford – even if they are able to make the monthly payments.
Therefore, it is essential that you reframe your understanding of “afford” and put the amount in a broader context of how much of your monthly take-home pay the loan will eat up.
Rather than merely focusing on the interest rate, it would be best if you calculated how much you would pay over the life of the loan. This means both the amount you borrow in addition to the interest. Sometimes a lower monthly payment doesn’t necessarily make a loan the more affordable option. That’s because over time, you may end up paying significantly more; therefore, it is vital to do these necessary calculations when comparing potential loans.
3. Remember that interest rates vary by lender.
When looking at potential loan lenders, you want to pay close attention to the interest rates they have as this will significantly impact the cost of the loan, and these interest rates vary from lender to lender. Additionally, your interest rate is going to be determined by your individual credit profile which includes your monthly wages, loan amount, employer, and existing debt.
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For example, one of the best personal loans for expats in the UAE is the CBD Personal Loan which offers interest rates starting from 7.25%pa that then reduce per year. The maximum amount for this particular loan is 20x an individual’s monthly salary or up to AED 750 thousand for UAE expat residents (whichever is lower).
Again, the better your credit score, the lower your interest rate will be. Plus, the longer your loan term, the more interest you are going to have to pay.
4. Know that a credit check is one of the most important aspects.
For expats who are looking to get a personal loan in the UAE, a credit check is going to be one of the most important aspects of your eligibility. In fact, one of the main reasons that loan applications in the UAE get denied is because of a low credit score.
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Generally, a good credit score is considered to be one that is above 650. The higher your credit score, the higher your chances are of having your loan application approved.
By running a credit check, a bank in Dubai is able to ascertain an individual’s ability to repay the loan on time by looking at their debt to burden ratio (DBR). The DBR is the ratio of total monthly commitments of credit card, loans or any other monthly repayments to the total income of an individual. For example, the maximum permissible DBR for an expat personal loan is 50%, as set by the Central Bank.
Taking out a personal loan can help you to move to the next stage of your expat life, which is why it is crucial that you consider all the different aspects of loans and choose a bank and a loan option that makes sense for your personal situation.
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Are you an expat in the UAE who is considering getting a personal loan? Why do you think this is the right move for you? What are you still unsure about? Let us know your thoughts and any additional questions you may have in the comments below!
Manvendra Chaudhary, with over 5 years of professional experience as CEO of Unique News and Megalent Marketing, shares insights on life, business, and health for your success.
Nowadays, the proliferation of fake videos on stock market operations is increasing and getting viral. In the wake of this, the NSE and the National Stock Exchange have issued certain guidelines on these, reported Livemint.
NSE has extended a stern caution to those investors who make fake videos purportedly recommending stocks by showcasing Shri Ashishkumar Chauhan.
Notably, Shri Ashishkumar Chauhan is the Managing Director and Chief Executive Officer of NSE. NSE said, “NSE in a few investment and advisory audio and video clips falsely created using technology.
The National Stock Exchange (@NSEIndia) cautioned investors on #fake audio and #videos of their MD- CEO @ashishchauhan recommending stocks — which are circulating on social media.
Such videos seem to have been created using sophisticated technologies to imitate the voice and facial expressions of Shri Ashishkumar Chauhan, MD & CEO of NSE.”
As per TimesNow, the national stock exchange has also requested investors to verify information, exercise vigilance and only trust what appears on official NSE channels.
Information can also be verified from www.nseindia.com, the official website. Other official social media handles include, “Twitter: @NSEIndia, Facebook: @NSE India, Instagram: @nseindia, LinkedIn: @NSE India, and YouTube: NSE India.”
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Ashishkumar Chauhan, the MD and CEO wrote on X, “Caution – clarification on fake audio/ videos of NSE MD and CEO recommending specific stocks – circulating on social media for last few days.”
This statement is the follow-up of the surfacing of the manipulated video and audio clips regarding stock recommendations.
These fake videos make use of advanced and sophisticated technology which mimic the MD’s voice and facial expressions. Thus, this creates an alarming and misleading situation for unsuspecting investors.
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NSE Employees Cannot Recommend Stocks
Thus, investors are advised not to fall for such fraudulent content and take investment decisions. NSE also clarified that its employees are “not authorized” to recommend or endorse any specific stocks.
NSE has also asked online platforms to take back potential deceptive videos. Meanwhile, the public and investors are requested to verify the authenticity of information and exercise caution before taking any wrong step which may cause financial loss and personal harm.
The notion of taking out a loan can be quite daunting, especially with various financial products available. Borrowing money is a significant decision, and it’s crucial to understand not only the types of loans out there but also the implications for your financial health. This comprehensive guide will walk you through the loan landscape of Canada, detailing the different types of loans, their uses, and what to consider before taking one out.
Understanding the Different Types of Loans
Lending institutions in Canada offer a multitude of loan options tailored to meet the diverse financial needs of individuals. Understanding the differences between these loans is the first step in making an informed borrowing decision.
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Personal Loans
Personal loans are among the most versatile financial tools available. They come in two main varieties—secured and unsecured. A secured personal loan requires the borrower to pledge an asset as collateral, which can be seized by the lender if the borrower defaults. On the other hand, unsecured personal loans do not require collateral, instead, they are approved based on the borrower’s creditworthiness.
Uses: Personal loans can be used for various purposes, including consolidating debt, making home improvements, and funding large purchases.
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Mortgage Loans
A mortgage is a loan specifically used to purchase real estate. It’s a long-term loan that can be repaid over a period of 15 to 30 years. Mortgages require the property being purchased as collateral.
Uses: Most commonly used to buy a home or investment property.
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Car Loans
Also known as auto loans, these are used to finance a car purchase. The car being financed serves as collateral for the loan.
Uses: Specifically for purchasing new or used vehicles.
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Student Loans
Student loans are specifically designed to help students cover the cost of higher education. They come with lower interest rates and more flexible terms than many other loan types.
Uses: To cover tuition fees, books, accommodation, and other educational expenses.
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Business Loans
Business loans are taken out by entrepreneurs for commercial or operational purposes related to their business.
Uses: Funding new ventures, purchasing equipment, or covering working capital needs.
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How to Choose the Right Loan for Your Needs
Selecting the right loan is crucial for successful borrowing. Here are several factors to take into account:
Determine Your Purpose
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Different loans serve different purposes. Determine the specific reason for your loan before proceeding. Whether it’s securing a hard asset like a home or car, consolidating debt, or investing in your education or business, the purpose will point you toward the most suitable loan type.
Interest Rate
The interest you pay on your loan is a significant cost of borrowing. Shop around to find the best interest rates, and remember that they can be variable or fixed.
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Loan Term
This is the duration within which you agree to pay off the loan. A longer loan term may have lower monthly payments, but you’ll pay more interest over time. A shorter term can save you money on interest but means higher monthly payments.
Fees and Charges
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Loans often come with additional costs, such as origination fees, prepayment penalties, and late payment fees. Be sure to factor these into your loan decision.
Repayment Flexibility
Some loans offer more flexibility in how and when you repay them. For example, personal lines of credit may have open-ended terms, while student loans may offer grace periods.
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Effect on Credit Score
Taking out a loan can impact your credit score, both positively and negatively, depending on how you manage the debt. Consider how the loan will affect your credit when choosing a loan type.
The Loan Application Process in Canada
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Each loan type has its own application process, but most follow a standard set of steps.
Preparing Your Documents
Banks and lenders will require certain documents, including identification, proof of income, and financial statements. Having these ready can expedite the application process.
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Submitting Your Application
Whether online, over the phone, or in person, you’ll need to provide information about the loan amount you’re seeking, the purpose of the loan, and your financial history.
Underwriting
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The underwriting process is where the lender assesses your creditworthiness and the risk of lending to you. They’ll consider your credit score, income, debt-to-income ratio, and employment history.
Approval and Disbursement
If approved, the lender will present you with the loan terms. After you accept, the funds can be disbursed, typically through direct deposit or a check.
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What to Consider When Repaying Your Loan
Repaying your loan is as important as selecting the right loan. It has implications for your financial stability and creditworthiness.
Creating a Repayment Strategy
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Create a plan to manage your loan repayments. Budgeting and setting up automated payments can help you stay on track.
Consider Accelerated Repayment
Paying more than your minimum monthly requirement or making extra payments can reduce the total interest you pay over the life of the loan.
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Understanding Default and Collections
If you can’t make your loan payments, you risk default. Defaulting can lead to damaged credit, wage garnishment, and the loss of collateral if the loan is secured. It’s vital to communicate with your lender if you’re experiencing financial hardship.
Impact on Credit
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Successfully repaying a loan can improve your credit score, making it easier to borrow in the future. Conversely, defaulting on a loan can have long-lasting negative effects on your credit.
Loans and Your Financial Future
Taking out a loan can be a significant step in your financial life. It can help you achieve your goals, but it also comes with responsibilities. Here’s how loans relate to your financial future in Canada.
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Building Credit
Responsible borrowing and payment of loans can steadily improve your credit score, which is essential for future borrowing needs such as mortgages, car loans, and credit cards.
Savings and Investments
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Loans can help you make large purchases or investments that you might not be able to afford upfront. Be sure to consider the return on investment and the cost of borrowing when making these decisions.
Emergency Preparedness
An emergency fund can reduce the need to take out loans in unexpected situations. Having cash reserves can provide peace of mind and reduce the overall debt burden.
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Retirement Planning
High-interest debt can derail your retirement savings. Understanding your loan terms and prioritizing debt repayment can free up more money to invest in your retirement accounts.
In conclusion, navigating the loan landscape in Canada requires careful consideration of the multitude of options available and the implications they hold for your financial health. By understanding the types of loans, selecting the right one for your needs, managing the application process, and planning for repayment, you can make informed decisions that support your financial goals. Remember, borrowing is a tool to be used wisely, not a solution in itself. Make sure to consult with financial professionals when necessary and always be mindful of your long-term financial well-being.
In a new development which will have far reaching implications for Indians, the U.S. has hiked Visa fees by a huge margin and it will come into effect from April. The visa fees hike will impact everyone from those who seek employment in the US like IT professionals, employers, sponsors, US citizens who seek to bring their relatives to the US and also high profile investors who want to do business in the US. The move has evoked sharp criticism by experts who have contended that there is a paucity of resources needed to address the increasing humanitarian workload and efforts to reduce backlogs.
The changes in the visa fees is as follows-
70% hike for H-1B visa petitions being sponsored by employers. Also the H-1B electronic registration fee will rise from $10 to $215.
L-1 visa fees hiked by 201% and O-1 visa hiked by 129%,
The initial EB-5 investment-linked green card visa fee has been hiked by $3,675 (over Rs 3, 00,000) to $11,160 (over Rs 9, 00,000)
Provision of a new Asylum Program fee of $600 which will be applicable for specific worker and immigrant petition
The visa fees hike for H1-B, L-1, and EB-5 categories will affect the Indians most because these three visas are the most common which is applied by Indians. This has been the most significant hike since 2016 and the hike as per US Citizenship and Immigration Services (USCIS) , which comes under the Department of Homeland Security (DHS), will help recover the costs and help in speedy increase processing of applications.
Fallout On Families And Spouses
The I-130 form fees have been hiked by 26% to $675 and it will impact those families which seek reunification including marriage which will enable spouses to migrate to the US. If a green card holder applies for an I-130 visa seeking to enable a relationship with an eligible relative who seeks to permanently settle in the US and seek a green card the fee stands at $1,440 as compared to earlier $1,225. Also if the person seeks to bring his fiancée to the US via Form I-129F, the fee has been hiked from $535 to $675, an increase of 26%.
Even if the couple goes for an out of country marriage the petitioner would need to file Form I-130 for their spouse to immigrate. The Form I-130 carries fees of $675; therefore, out-of-country marriage would not result in significant cost savings.
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Also the process of applying for American Citizenship has also become very expensive but the fees for the online application for naturalization with biometric services has seen a decline from $725 to $710.
The most notable increase is seen in the EB-5 – the investment-linked green card visa program has been hiked almost three times from $3,675 (over Rs 300,000) to $11,160 (over Rs 900,000) for their initial I-829 application. This increase will significantly impact the wealthy Indians who seek to invest in the US for residency purposes.
The EB-5 program will require the applicant to go through a consulate interview. They must also possess a conditional green card valid for two years and for a permanent green card, the applicant will have to go through an application process. The EB-5 program came into existence in 1990 and was aimed to bring in high value foreign investments and applicants will have to invest a minimum of $5,00,000 in a US business and get a visa to stay in the US.
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Fallout On IT Professionals
This is a hike which will affect most of the Indians who seek a job in the IT sector in the US. H-1B visa was originally meant to suck in highly qualified Professionals in India who had passed out from premium Institutes such as IIT or IIM. It was a big source to attract highly trained professionals which will serve to dill in the requirements of the IT sector. Thousands of highly trained professionals apply for HI visas for better employment opportunities in the US. The H-1B visa has been increased from $460 (over Rs 38,000) to $780 (over Rs 64,000), with the registration fee also increasing from $10 (Rs 829) to $215 (over Rs 17,000) – an increase of 2,000%.
USCIS has contended that the increased fees will boost revenue and help improve customer experience and backlog.
USCIS director Ur M Jaddou said “It is for the first time in over seven years, USCIS is updating our fees to better meet the needs of our agency, enabling us to provide more timely decisions to those we serve”.
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The hike in Visa fees has been severely criticized by many experts. One of the main critics has been the IT sector and the music industry which is dependent on overseas employees and the latest visa hike will affect this sector the most.
