As part of ‘The Debt Panel’, The National published an article about an Emirati government employee who took out an AED 300,000 personal loan to start the construction of his house, and now needs AED 1 million more to finish building it.

I am Emirati, work in the government sector in Dubai and have outstanding debts of Dh350,000. This is made up of two loans, a personal loan of Dh300,000 and a car loan of Dh50,000. I don’t have any credit cards. I took out the personal loan to start building my house but then the contractors ran away. Now I am stuck with this debt and I want to complete my villa, which needs at least Dh1.7 million to finish it. I only need a loan for Dh1 million, as I am getting Dh700,000 from the government housing establishment, however no bank is willing to finance me. I earn Dh33,000 a month and my monthly installments are Dh12,000 for the personal loan, Dh1,000 for the car loan and Dh6,000 for my accommodation. What do you suggest?

Here is what Ambareen Musa, one of the debt panelists and Founder & CEO of, had to say.

Your current loan installments take up 40 per cent of your monthly salary, so logically the first step towards improving your financial situation should be to lower your DBR. And since your current DBR makes it hard for you to qualify for a home construction loan, you will have to find a solution to fix that first.

To reduce your DBR you will have to either pay off your personal loan completely or find a way to stretch your repayments over a longer tenure. The former option makes more financial sense, so you can explore that to begin with. Do you have any savings you could tap into, or any investment and assets you could liquidate? Even an interest-free loan from your relatives or employer, or a few months’ advance salary, can help you settle a huge chunk of the personal loan.

For full article go to The National.