(ThyBlackMan.com) The key to becoming a successful entrepreneur lies in a balanced combination of innovation and vision for your business idea. If you are a women entrepreneur in the UAE who is looking for a good exposure without having to worry much about the funding, this is the right place for you!
A woman’s role in society has been increasing tremendously. As per the UAE Ministry of Economy, women contribute to almost half of the SME sector. There are numerous reasons as to why UAE is the place for women entrepreneurs having startups ideas; namely: beneficial visa changes for women expats, various female-led entrepreneurs’ groups, advisories & workshops and support for a woman to return after childbirth.
As funding is one of the major factors while starting a business, Personal loan in the UAE is a preferred means of credit in case of scarcity of funds. It is a source of funding that doesn’t require any collateral. There are numerous banks in UAE offering loans such as Emirates NBD Personal Loan, United Arab Bank Personal Loan, ADCB Personal Loan, among the others. PLs from these banks can be availed at either flat interest rates or reducing interest rates.
Flat interest rates, as the name suggests, are constant throughout the tenure of the loan. Whereas, reducing interest rates takes into consideration the change in the principal amount after every EMI (Equal Monthly Instalments) and the interest percentage is calculated on the reduced principal amount.
How Personal Loan is the Right Choice for You?
Personal Loan is rapidly becoming the preferred source of finance, here’s why:
1. No Limit to the Uses
This the top benefit of a Personal Loan; it can be used for many purposes. There is no limit to the uses of a Personal Loan. It is the best source of financing when it comes to an emergency in cases of funds.
2. Quick and Easy
If you can meet the eligibility criteria and carry a good individual credit score, you can get a Personal Loan easily.
The eligibility criteria often vary across providers in the UAE, however, the common eligibility criteria often looks like:
- The applicant must be above the age of 21 years
- The length of services varies from 6 to 12 months
- The applicant must be earning a salary between AED 3,000 to AED 5,000 (in some cases it may be up to AED 15,000)
- Most of the providers require a salary transfer
- At the time of maturity, the age requirement is below 60-65 years.
The documentation process is also easy and not lengthy like most loans. Some banks also offer online approval of such loans if you are an existing customer. The documentation can be different depending on the provider, the general documentation usually required is:
- Complete loan application form
- Documents for identification such as passports, VISA, Emirates ID.
- For Expatriates: a copy of a valid passport with valid UAE residence visa
- Salary certificate, or salary transfer letter
- Bank statement for the period of 3 to 6 months
- For self-employed customers: trade license
3. No Collateral Required
You don’t have to secure an asset against a Personal Loan. It is an unsecured loan, which makes it easy to obtain.
4. Flexible Tenure
You have an option to choose the tenure that suits your vision the best. Most banks offer maximum finance for up to 4 years. A longer tenure usually has a lower EMI.
5. Other Added Benefits
There are additional benefits, such as:
- Some banks offer optional insurance coverage
- Numerous banks over free lifetime credit card
- Customers can choose to top-up depending on an increase in salary or as per personal requirements
- Few banks offer no payment options for two months
- Pull-over finance is offered from other banks, in some of the cases
- Several banks offer a free debit card to expatriates
- Loan return option can be availed by customers, offered to them by a few banks
However, they vary across providers. It is best to compare different providers as per the needs of your business. This can be done using a web aggregator, such as policybazaar.ae where you can compare different available options in one place as per your budget.
To conclude
Personal Loan can be an easy and beneficial method of financing, especially for women entrepreneurs. They have a fair share of advantages, which makes them even more attractive. However, certain things to keep in mind before taking the final dip would be:
- Since it is an uncollateralized means of financing which increases the risk involved, the interest rates are generally higher than most loans.
- As these loans are risky, your credit score holds great importance in availing this source of financing. The providers hold your credit score as a determining factor upon evaluation.
- There are fees involved varying among providers. You should be clear about the fees your provider charges
With the above mentioned, Personal Loans have a lot of advantages especially when it comes to borrowing via entrepreneurs as it is quick and easy to obtain and can be used as a cash cushion in the hour of need.
Staff Writer; Steve Jones