As part of the Debt Panel, The National published an article on the debt woes of a Dubai account manager, who has accumalated a debt of more than AED 100,000 on his five credit cards and one loan. Souqalmal Founder & debt panellist Ambareen Musa answers his queries.
I earn Dh12,000 a month as an accounts manager and have five credit cards from five different banks with outstanding balances of Dh103,500. I also have a loan on which I make monthly payments of Dh5,400. I want to settle the credit cards as soon as possible with a single loan. However, no bank is giving me a loan. I am from India and borrowed this money for my cousin to help him set up a business, however his business has now flopped. If any bank gives me a loan, I can then pay and settle the cards in one go. I am suffering because there are too many financial charges and late payments fees on the credit cards.
Here is what one of the debt panellist – Ambareen Musa had to say:
The Dh5,400 monthly instalment on your personal loan alone takes your Debt Burden Ratio (DBR) close to the 50 per cent limit prescribed in the UAE. Then there’s the Dh103,500 outstanding balance on your credit cards which is multiplying every month owing to the high interest rates on UAE credit cards, close to 40 per cent per annum, on average. This will most likely make consolidating all your debt a problem, so here’s an alternative solution.
For full article go to The National