Friday 26 April 2024 (UAE)
Coronavirus in the UAE: Some information on this website is out of date as a result of measures taken in the UAE to deal with the coronavirus crisis. Confirm with official or authoritative sources.
Debt Consolidation in Dubai
Debt consolidation in Dubai UAE - be careful of firms advertising debt consolidation services in the UAE. Usually the only reliable and safe way to consolidate your debt in Dubai is by borrowing personal loan from your bank in the UAE.
Debt consolidation is when you borrow sufficient funds from one source to pay all your outstanding debts due to other sources e.g. credit cards, car loans, personal loans.
- Be vary wary of any firms offering debt consolidation services in Dubai, especially those found online.
- There is a good chance of ending up even deeper in trouble since those companies usually either take a fee and disappear, or take a security cheque off you.
- In the worst case, a debt consolidation company might take a security cheque off you, promise to deliver funds but renege and probably disappear, and attempt to cash in your security cheque anyway.
- Really, the only safe way to avoid a bounced security cheque in Dubai, and a resulting jail sentence, is to either negotiate some sort of payment system with the bank, and/or borrow funds from a trusted source that also trusts you to pay it back. Or sell something if you have some assets to sell.
- A bank in the UAE might consolidate several loans into one for you and arrange repayment terms. This is especially desirable for those with outstanding credit card debts since the interest rate on credit cards is often upwards of 30% per annum, but on a personal loan might be 10-15%, or perhaps even lower if you're lucky.
- If you have a banking relationship with an offshore bank, or a bank in your home country, you might be able to arrange a loan with them to pay off your debts in Dubai.
- Family and/or friends might help with lending money but keep in mind that borrowing money from family and/or friends is a good way to lose friendship.
Credit card debt in the UAE
- If you are in trouble financially, consider cutting up your credit cards so you're not tempted to use them. Or at least take them out of your wallet or handbag and leave them at home so you're not tempted to use them for less essential purchases.
- Credit card interest rates charged, especially in the UAE, can be crippling. Usually at least 2-3% per month and sometimes more.
- For example, if you have AED 100,000 outstanding on your credit card bills (a figure that does not seem to be unusual in Dubai), then you are likely to be paying AED 3,000 or more per month just in finance charges.