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Mon 13 Apr 2009 10:10 AM

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HSBC relaxes rules on UAE personal loans

Bank lowers monthly salary requirements to qualify for credit to AED10,000.

HSBC has reduced the minimum salary required to get a personal loan in the UAE to AED10,000 ($2,723) from AED20,000, it was announced on Monday.

The move is in line with current market conditions, said Abdulfattah Sharaf, chief executive of Personal Financial Services at HSBC Bank Middle East.

“Although we have relaxed salary levels for personal and auto finance, we will adapt a cautious approach to assess customers’ credit worthiness and offer loan amounts based on repayment capacity. Throughout our long history this approach has shown us that we are well placed to navigate periods of economic and market instability,” he said.

Arabian Business reported in November that HSBC had doubled the minimum salary someone must earn to qualify for a personal loan to AED20,000 from AED10,000.

As recently as January this year, the bank doubled the minimum salary limit for customers in the UAE and Qatar seeking a car loan, citing global economic uncertainty.

Personal finance loans at the bank range from AED50,000 to AED250,000 and can be taken over a maximum period of 60 months.

HSBC Middle East last month decided to re-enter the UAE mortgage market after all but pulling out of the home loan market due to the liquidity crunch. It now offers 75 percent financing on completed villas, 70 percent on completed apartments and 50 percent on off plan units.

Previously its loan to value ratio had been lowered to 60 percent and 50 percent for villas and apartments, in a tightening of lending policy that was mirrored across the sector.

On a more bearish note, HSBC in the UAE last month confirmed that it has been revising credit limits over the last two to three months.

One HSBC customer told Arabian Business he had received a text from the bank informing him his credit limit would be lowered by up to 40 percent.

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Joe 10 years ago

Foreign banks cannot revive the market on their own. Where are the UAE banks when it comes to lending for mortgages & personal loans?

Kaptain 10 years ago

That is why the bar was lowered.

Mumeen Chowdhury 10 years ago

Its always devastating to the card holder when the limits are suddenly lowered by deducting unilaterally from the salaries deposited into bank accounts. As long as the current limits are being paid by card holders on time, I see no reason to disturb this balance by throwing off the card holders' economics. It's these banks in the first place who offered the credit limits without fees, without securities, without anything. And when we got used to using the cards and utilizing the limits, these banks suddenly lower the limits by snatching away card holders' bank balances or salaries credits! This must be prohibited by law. We know how we have been devastated by such credit card reduced limits imposed by the central bank in kuwait in 2008. Our monies were virtually robbed by the bank as our salaries are deposited with them. International banks like HSBC shouldn't follow these GCC govts/banks standards.

Beth 10 years ago

Can anyone answer my question pls..i worked and lived in dubai for 4 yrs and had a credit card and personal loan from standard chartered, paid it for 3 yrs but left dubai and went back to my home country in asia due to pregnancy, the loan and credit card isnt fully paid because i am financially broke now. does anyone knows what the bank will do against me?are they going to submit my name to dubai police and immigration?how soon can they do this..?