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Everything to Know to Get Education Loans to Study in the UAE

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UAE is one of the safest countries for international study. It ranks high in terms of international-level universities and placement too. Many aspirants hence plan to pursue higher education in UAE. However, the cost of studying in the UAE is astronomical. So, most students look for UAE student loans.

Securing a student loan in UAE can be a challenge. Although cheaper than in America or Europe, UAE is not pocket-friendly either. You must arrange funds beforehand if studying in UAE is your dream. Keep reading this blog to know everything you will need to get an overdraft in UAE 

Eligibility Criteria to Apply for the Student Loan in UAE

To get student loansin UAE, you must meet certain criteria –

  • You should be a UAE national or resident
  • You must be within 21 to 65 years
  • You must meet a minimum salary bracket [AED 7000/month – AED 10,000/month]
  • You must have a current account in banks offering education loans in UAE

Meeting all these criteria can be a challenge for students. However, they can ask our experts to guide them whenever they need.

Characteristics of Student Loans in the UAE

If you want a student loan in UAE, you must know its features. There are mainly two types of credits in UAE. Their characteristics are –

Private Credits

  • Rewards Good Credit Scores
  • Offers Higher Borrowing Limits
  • Statute of Limitations
  • Quick Application Process
  • Great Alternate Options to Government Funding

Government Credits

  • Lower Interest Rates
  • Moratorium Policy
  • Covers a Wide Range of Expenses
  • Subsidies on Education Loan Interest
  • Eligible for Tax Benefits
  • Improves Credit Rating
  • No Need for Asset Liquidation

Here is an overview of both types of education loans for a better understanding –

CharacteristicsPrivate CreditsGovernment Credits
Standardised interest ratesNoYes
Upfront Loan FeesUsually NoYes
Fixed and Variable RatesYesNo
Need for Credit CheckYesUsually No
Requirement for Co-signerYesUsually No
Access to income-driven repayment plansUsually NoYes
Access to Forgiveness OptionsNoYes
Loan LimitsUsually, the total cost of the programDepends according to the loan program

A Comparison of Student Loan Options in the UAE

Now that you know the characteristic, let’s compare to see which loan is best. You can avail student loans in Dubai through two channels –

Loans from Private Banks

Most students prefer this option. There are certain benefits of borrowing from banks. Firstly, their rates are much more competitive. Secondly, you can take it as a personal loan too. That way, you can spend it on other things like rent, travelling, etc.

However, students must check the criteria before applying for a personal loan. If needed, you can always ask us to help you. We can assess your files and guide you on the right path.  

Aids from Universities

If you cannot meet the bank criteria, don’t worry. Many UAE universities also allow grants to students. International students can apply to the university for financial aid if needed. These universities are well-connected with the banks. So, you may get student loans in UAE, even through universities.

Reach out to us for the updated university list. You can check it and know which university to approach easily. We can even help you cover your families through financial aid.  

The Advantages of Student Loans in the UAE

Get Access to Quality Education

UAE offer student loans to give undergraduates better access to higher education. Most reputed institutions in the UAE are extremely costly. So, many of you cannot afford their course fees. Loans help them get easy access to better education opportunities.

Flexible Repayment Terms

Another advantage of education loans is their flexibility. Students get various repayment options, like grace periods after graduation. This allows borrowers to make themselves stable before repaying.

Competitive Interest Rates

UAE-based credit options are extremely competitive. So, you may find it extremely affordable in the long run. You can even ask us to find the most competitive rates for you.

International Student Support

This encourages more international students to come to UAE. International students can get better support and have a smooth learning experience. You can consult with us and know what to expect from UAE loans.

Zero Collateral Requirements

Most education loans are unsecured in UAE. So you don’t need any collateral. This can be advantageous for students without substantial assets.

Creating Solid Credit History

You can also create a solid credit history by availing a loan. We can help you understand the various advantages of positive credit scores. You can apply for future loans easily with better credit ratings.

Deferred Payment Options

This is another advantage you should know. Certain banks allow you grace periods. So, you can start paying only after securing a job. Students don’t need to pay while pursuing their studies. This becomes a big relaxation for them.

If you are still unsure of anything, let us know. We can help you clear any doubts about education loans in UAE.

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The Disadvantages of Student Loans in the UAE

Despite so many advantages, there are a few disadvantages too. Be alert of these issues before applying for one –

Accrued Interests

Like any loan, you also need to pay interest here as well. But, many students take an extended time to pay it. This increases the overall cost over time. So, accrued interests become a major challenge for them.  

Debt Burden

They always increase the debt burden. Especially, students who borrow high sums can haunt them in the future.

Limited Grace Periods

Students do get a grace period for repaying the loans. However, that time is also finite. This time isn’t enough for most students. Eventually, they find it hard to stabilise their finances with limited grace periods.

No Employment Guarantee

Students plan to repay the loan after securing a job. Education loans, however, don’t guarantee a job. Personal issues and unforeseen challenges force many students to drop out. Without jobs, they find it impossible to repay it anymore.

Dependency on the Job Market

Students depend on the job market to get employed. But the job market is extremely uncertain. If the job markets experience a slump, borrowers can be in trouble. Over-dependency on job markets makes money lending a big threat.

Credit Score Impact

Taking overdrafts can build your credit score. However, failing to repay one can shatter it. It becomes challenging for them to get further loans in the future.

No Discharge in Bankruptcy

People can declare themselves bankrupt to evade repayments. This isn’t a possibility in UAE. Students cannot declare bankruptcy and avoid repayment.

Long Commitment

They usually have long repayment terms. So, borrowers get tied to a long-term commitment. This is why many get second thoughts about applying for a loan.

These are a few disadvantages that you must know. You can consult us anytime to clear any dilemma and apply for one.

The Interest Rate on Student Loans

Different banks charge different interest rates for lending money to students. So, you must conduct thorough research on banks having the lowest interest rate. The interest rate can also differ based on your salary. The interest rates may change because of the bank policies too. Ideally, the average interest rates are between 7-8%.

Two types of interest rate policies are prevalent in UAE – Flat and Reducing Rates. You must check the pros and cons of both before choosing one. You may consult our experts in case of any doubt. We can help you understand and guide which loan is perfect for you.

Tips for Manage Student Loans in the UAE

You can follow these tips to manage education loans in UAE –

Create a Budget

Start by creating a detailed budget list. Include all the expenses, income, and debts you have. This will portray a clear picture of your financial situation. Then accordingly, you can allocate funds. You may ask us to help you create a detailed budget.

Know Your Existing Debts

Understand the types of your debt. List down the repayment terms, interest rates, and necessary details. Familiarise yourself with the different repayment options.

Explore Repayment Options

There are various ways to repay the borrowed money. There can be standard, extended, or income-driven repayment options. Choose a plan that best suits your needs. You can also consult us to know the best option for you.

Pay More than Minimum

Always aim to pay more than the minimum amount. Squeezing something extra than the stipulated amount will lower the debt. Even a small excess amount can create big impacts in the long run. It will reduce the total interest paid, shortening the repayment term.

Automate Payments

Always opt for auto-payment options. You will never miss a due date by doing so. Many lenders even offer reduced interest rates for auto-payment options. You can discuss with us to understand the pros and cons of auto-payment. Our consultants can help you figure out the ideal repayment options.

Check Loan Forgiveness Policies

Always prepare yourself for the worst. Understand that you may succumb to unforeseen troubles. So, explore the forgiveness policies beforehand. Depending on your career, you may become eligible for one. We can help you find which careers will be best for you. For example, PSLF is available for students working in government sectors.

Know How to Handle Credit

Avoid failing to pay your EMIs at any cost. They can affect your credit score and lead to legal consequences. It is better that you communicate with the lender if you face financial difficulties. And if you have trouble managing your finances, you can always seek personalised financial guidance from our experts. They can guide you with repayment options like forbearance and deferment.

Loan Repayment Options and Strategies

There are fixed rules within which students should repay the loan. This duration gets decided by the bank itself. Usually, you need to repay the entire amount within 48 months. In case of default, the bank may issue a legal notice demanding payment. So, you should aim to settle it as soon as possible.

You may follow these 5 strategies to repay the loan faster –

Begin Early

The best way to repay faster is to start to pay early. Paying during the moratorium period reduces the principal amount. As the principal amount goes down, you can easily pay it off faster.

Budget your Income

Always follow the 50-30-20 rule. This simple guideline can help you budget easily. Save 50% of the income for necessities. Keep 30% for things you desire and 20% for debt and savings. You may want to tweak this formula for faster loan repayment. For example, stop eating out, or discontinue streaming services to save more.

Refinance the Loan

You can also refinance your existing loan. Explore lenders who can help you refinance. By refinancing, you can lower the interest rates. Especially if you are earning, you can negotiate for better terms and conditions. If you cannot find one, ask us to help you.

Use “Found” Money

Explore avenues to find more money. It can be a relative’s money or a tax refund. If you get your hand on some money, immediately use it to repay the loans. You can reduce the interest payable by paying in big chunks.

Create Extra Income Sources

Look for a part-time job or any side hustle. If you start earning more, you can pay faster. Once you start paying more than the EMIs, the debt will be reduced. There are many ways to earn more money.

Processing and Settlement Fee

There are no specific guidelines about the process fees. Each bank has its own policies and are always subject to change. So, always speak with the officials before finalising the loan. On average, banks may charge approximately 1500 AED as processing fees. Speak with our officials if needed. We can easily help you find the best loan for students.

Many students try to settle the loans early. Hence, every bank offers an early settlement option. You may look at the bank policies to understand your ideal payment option. You may consult us in these scenarios. Our expert guides can help you choose the best payment mode. Foreclosing loans can cost you an additional cost. Our guides can help you decide the most profitable option.

Banks that Provide Student Loans in the UAE

Each bank has its maximum limit of allowing funds. For example, some banks grant only 10,000 AED as a student loan. But, this amount can increase depending on the eligibility of the applicant. There is, however, a maximum limit. Students can avail a maximum of AED 3,00,00 as an education loan in UAE. This is a list of all the banks that offer education loans in the UAE for expats –

  • Abu Dhabi Commercial Bank
  • HSBC
  • Mashreq Bank
  • Emirates NBD
  • Barclays
  • RAK Bank
  • Abu Dhabi Islamic Bank
  • Union National Bank
  • Dubai Islamic Bank
  • Sharjah Islamic Bank
  • National Bank of Abu Dhabi

You may consult with us and choose one before taking your loan.

Universities that Provide Financial Aid in the UAE

These universities are most popular for offering scholarships to students –

  • United Aram Emirates University
  • Abu Dhabi University
  • American University in the Emirates

There are a few other universities that offer the same. Ask us, and we can provide you with the full list.

Documents Required for a Student Loan in the UAE

To secure student loans in UAE, you must submit the following documents –

  • Valid passport both in original and photocopy
  • Valid residence visa
  • Copy of University ID card
  • University enrolment card [optional]
  • Updated bank account statement for the last three to six months
  • Quotation mentioned by the university to the bank
  • Bank statement of salary for the last six months [original copy]
  • Original salary certificates
  • Trade license [applicable only for self-employed individuals]
  • A security cheque with 120% of the loan amount [depending on the bank]

The process of securing an education loan in the UAE differs for each university. So, always check the university website to get the full list of required documents. We can also help you get all the specifics if you need them.

Frequently Asked Questions

Can international students get loans in UAE?

Ans: International students can get 100% education loan coverage. This depends on the lenders, as well as your credit rating.

Can I get a student loan in UAE?

Ans: Yes, any international student can get a loan in UAE. They can avail it from either private or federal lenders.

Which bank is best for international student loans?

Ans: Emirates NBD is the best bank for education loans in UAE. Most online reviews and polls confirm the same.

What credit score is needed for a student loan in UAE?

Ans: You must have 700 points and above to get a student loan in UAE. The higher your point is, the more chances you have of getting a loan.

Who is eligible for a loan in UAE?

Ans: International students can get a loan in UAE if –

  • They are UAE nationals
  • They are UAE expatriates
  • They are between 21 to 65 years
  • Their minimum monthly income is 10,000 AED

How do I qualify for a loan in UAE?

Ans: To become qualified for a loan in UAE, you must have –

  • Salary transfer letter
  • Passport copy
  • UAE resident visa [for expats]
  • Bank account statement for three to six months
  • Trade license
  • Verification letter from loan provider

Can I leave UAE if I have a loan?

Ans: Yes, you can leave UAE without paying the loans. Legally, you don’t need to be in UAE to pay the loans. However, for defaulters, the lender can issue legal notice. So, the defaulter may face legal charges from international debt collectors. In certain cases, authorities can even detail you at the airport. For bilateral agreements, legal enforcements are valid outside UAE too. So, you should always inform the creditors before leaving the country without paying the loan.

Can I return to UAE if I have a loan?

Ans: You can return to UAE if you have a loan. But you need to conduct thorough checks. The country can issue travel bans and warrants against you. If there are no such issues, you can return to UAE. It is advised to contact the lender and discuss settlement options. That way, you may evade any legal complexities after returning.

Hi, I am Mark, a Literature writer by profession. Fueled by a lifelong passion for Literature, story, and creative expression, I went on to get a PhD in creative writing. Over all these years, my passion has helped me manage a publication of my write ups in prominent websites and e-magazines. I have also been working part-time as a writing expert for myassignmenthelp.com for 5+ years now. It’s fun to guide students on academic write ups and bag those top grades like a pro. Apart from my professional life, I am a big-time foodie and travel enthusiast in my personal life. So, when I am not working, I am probably travelling places to try regional delicacies and sharing my experiences with people through my blog. 

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