HSBC: AED20,000 monthly salary needed to get loan

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CREDIT CRUNCH: HSBC has raised its minimum monthly salary threshold to 20,000 dirhams. (Getty Images)

HSBC has raised the minimum monthly salary someone in the UAE must earn to qualify for a personal loan to 20,000 dirhams ($5,445) due to the global credit crunch, the bank confirmed to Arabian Business on Monday.

The bank said it doubled the minimum monthly salary threshold on Nov. 1 from 10,000 dirhams.

HSBC raised its threshold to 10,000 dirhams from 5,000 dirhams in early October, it said.

The bank said in a statement the new credit eligibility criteria “will ensure that customers receive loans that they can afford to repay at a time of considerable uncertainty around the world”.

Raj Madha, equity anaylst at EFG-Hermes, said HSBC might be trying to reduce its exposure to a section of the market that many see as overleveraged and other banks could follow suit given the current liquidity squeeze.

"We would expect banks to be less agressive in going after loans, particularly where the returns do not necessarily match the risks," Madha said.

The news has left customers worried about how they will afford to pay their rent.

As many landlords demand tenants pay the entire year’s rent upfront it is common for tenants to take out a personal loan and pay it off over the course of the year.

HSBC's new threshold compares to just 3,000 dirhams a month which is required to take out a loan with Standard Chartered.

Have you been refused a personal loan because your bank has tightened its credit eligibility criteria? Arabian Business wants to hear from you. Email us at This email address is being protected from spam bots, you need Javascript enabled to view it .

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