Do you know what’s happening in the UAE personal finance market? From a macroeconomic point of view, the personal finance theme of the third quarter has revolved around rising personal debt, diminishing deposits and tightening liquidity across banks in the country. But what about the consumers, what’s affecting their big and small personal finance decisions? How are they deciding which personal finance products to choose?
The Souqalmal team analyzes data from over 800,000 visits the site gets every month, and reveals key trends in user behavior and factors that affect demand. Below are the top three personal finance trends uncovered in Q3-2016.
Personal loans most popular, Non-salary transfer options in demand
In line with the trend observed since the start of 2016, personal loans continue to be ‘most sought-after’ product category on Souqalmal.com this quarter too. Searches have gone up by 28 percent quarter-on-quarter, and personal loans now make up over 37 percent of total visits across all product categories on the site.
Further analysis of Q3-2016 data also revealed that non-salary transfer variants were the most searched for sub-category within personal loans. Compared to the same period last year, personal loans with no salary-transfer requirement garnered more searches this quarter. There has been an increase in searches for loans offered to non-listed companies’ employees too.
Credit cards form one-third of all visits, Rewards come first for users
Credit cards have become the second most sought-after product category on Souqalmal.com, with searches increasing by 14 percent in the third quarter. Breaking away from the trend noticed last year, users are moving away from fee-based search criteria and are now becoming increasingly mindful of the rewards programs on cards.
Results from Q3-2015 showed users placing a higher emphasis on Annual Membership Fees when searching for credit cards. However, an analysis of Q3-2016 data has revealed a surge in searches for credit cards that offer benefits like air miles, cinema and dining discounts among others, regardless of the annual fees levied.
Our analysis has also uncovered key differences in users’ credit card preferences, across different salary brackets. Those making AED 15,000 or lower per month, preferred cashback cards and cards that offer a balance transfer option. At the other end of the spectrum, those earning more than AED 35,000 showed an inclination towards credit cards offering an air miles program.
[Related: 5 ways credit cards can save you money]
More users seeking home loans, Variable rate options rule the roost
Searches for home loans on the site went up by 16 percent quarter-on-quarter. Following the trend we noticed in the last two quarters, fixed-rate mortgages seem to have taken a backseat, with more users now looking for home loans with variable rate arrangements. So what could be the reason behind this?
Introductory fixed interest/profit rates usually don’t last for more than the first two or three years, and there’s also the bank-imposed restrictions on partial loan settlement during the fixed-rate period. Given the fact that home loan tenures are very long going up to a maximum of 25 years, potential borrowers seem keen to opt for low variable rates and negotiate lower bank margins for the entire tenure.