UAE banks back to wooing you with promises of ‘easy money’

Some UAE banks are wooing people to avail of personal loans, credit cards and home loans by offering a wide range of incentives like quick loan processing (24 to 48 hours), low or zero processing fee, cash back offers, insurance coverage, electronic gadgets such as tablets and smartphones, air tickets, shopping vouchers, gold coins, raffle draws, etc.

Banks and finance companies are competing to lure reluctant customers, with personal loans being offered even to finance summer travel to holiday destinations.

The personal loan segment is once again seeing hectic activity after a slow period.

Credit life insurance, deferred loan repayment over varying periods, deferred first instalment payment and job-loss coverage are among the offers made by banks and their agents to encourage people take personal loans.

One bank is offering gold coins and a chance to win kilos of gold if customers transfer their salary to the bank, use their credit cards at specified outlets or apply for a personal loan.

A foreign bank is offering ‘a free gift for your family’ along with a personal loan and the freebie is an ‘electronic gift of your choice’.

Some banks are also promising to restructure existing loans with other banks, top-up loan amounts and other sops.

“It is a kind of harassment. Even after I told them several times that I am not looking for a personal loan or credit card, different representatives of the same bank or credit card company keep calling me again and again,” said an Asian employee of a leading company. He also said he is aware of the strong-arm tactics used by loan recovery agents.

However, this time banks are spelling out the pros and cons of taking a personal loan or credit card. Nevertheless, they remain aggressive in marketing personal loans.

Unlike in the past when personal loans and credit cards were offered to low-income people, a minimum salary of Dh5,000 is now mandatory to avail of the loan offers. Some banks have fixed Dh6,000 as the minimum salary for a personal loan. The minimum loan is Dh15,000 and the maximum can go up to Dh3 million.

A foreign bank is offering a Dh5 voucher every time a customer refuels his car for Dh25 or more using its credit card at Emarat petrol pumps.

Another prominent UAE bank is promoting its personal loan products through limited time offers – a personal loan in just 24 hours with one per cent cash back. “We are the only bank to offer the dual benefit of loan coverage. Not only is the loan repaid to the bank by the insurance company, but also the equivalent amount is given to the next of kin in the event of unforeseen circumstances,” says a local bank’s representative, who also offered Dh500 off for online loan applicants, free bank account, debit cards and an option to repay the loan within seven days, if the customer is not satisfied with the terms and conditions!

Banks are also changing their marketing tactics according to the changing foreign exchange rates. When the Indian rupee was weakening and the rupee-dirham exchange rate was about to reach Rs17 to Dh1, banks were luring people to take personal loans by sending this SMS to potential customers: “Save in Indian rupees with a personal loan to invest in NRE fixed deposit at our partner banks in India.”

Now that the Indian rupee seems to have strengthened, banks are coming out with other incentives, including 50 per cent discount on processing fee, if the loan amount is less than Dh100,000.

An Abu Dhabi-based bank, which is running a ‘loan festival’ promises loan approval in just ten minutes for any expatriate over 21 years of age, six months service record and a minimum salary of Dh5,000. However, the job-loss protection is restricted to a six-month deferred payment schedule free of charge.

“I am looking for a personal loan and some of the offers are quite good. However, I have to be careful about my repayment capacity before signing for a big loan. I am quite careful about not falling in a debt trap, but taking a personal loan or credit card is not a bad idea right now,” added another customer.

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