If you live in the UAE and doing a job, ever think about having your own home that you can call home sweet home and hare with your beloved ones. Well, most people don’t because they always busy in their jobs or businesses and find it pretty much difficult to have a home due to a large number of expenses every month. The busy and lavish lifestyle in the UAE is clearly much expensive than any other region in the world. The point is if someone lives in a flat on rent and paying a handsome amount every month then why not an installment for mortgage loans in UAE. You can easily get the best loan services from any private bank or through a financial institution working with a reputed history.
This article is all about the banking sector and interest rate being charged on a loan scheme. There are two possible ways to approach a bank – first you can visit any branch of a bank or first check the e-banking options available through the official website of a certain bank. We suggest you read all terms and conditions about specific packages from a bank through its official portal and then call the relationship to manage for further queries. This way you will be able to compare the different banking options about your required loan package. Suppose you are looking for a mortgage loan, banks will vary in their packages while considering interest rate.
There are two options considering interest rate on a mortgage loan in UAE is:
- Interest rate through conventional banking
- Interest-free Islamic banking
Which loan option is best for Non-UAE Residents?
No doubt the banking sector is highly professional and up to the mark while providing excellent loan packages according to the needs of a borrower. But it is really hard to manage things if you will not pursue this agreement in a proper and responsible way. Major problems come from the interest rate that will increase if one would not be able to repay the installment on time. So what we do? You can completely skip this track by choosing Islamic banking and for the majority of the middle-class expatriates, it would be the most suitable choice.
While on the other hand conventional banking can also accommodate you through a suitable loan package with maximum ease. You can avail easy installment method with a minimum interest rate level and manage it through a fixed-rate repayment method. There is a difference between an average borrower and a high net-worth individual so maybe this formula will work for both:
- For High net-worth individuals – Mortgage loan through variable-rate repayment method
- For an average borrower – mortgage loan through fixed-rate repayment method
Both repayment methods are suitable to avail home loans for Non-UAE residents but the Islamic loan option is best suited for average account holders. Through Islamic banking, the loan is provided on the basic principle of Sharia law in which banks and borrowers are both partners while sharing profit and loss.