Gulf news published an article on the importance of reading the small print on loan contracts. It emphasizes on the details that need to be understood before taking a bank loan. Ambareen Musa, founder of Souqalmal.com shares her thoughts on the topic.
It’s important to convert both the flat and reducing rate to the same rate for a realistic comparison and to find the best one that’s being offered in the market. Unlike a flat rate, a reducing rate takes into account the loan amount already paid off, and calculates interest on the outstanding amount. Besides the applicable interest rates, always ask about the fees when you’re applying for a top up. Early payment of loans can have their benefits as long as you do the maths. Some UAE Banks wont offer loans to non-salary transfer customers and often do so at very high interest rates.