Did you know that UAE has one of the highest number of international schools in the world? According to a 2017 ISC research report, the UAE has 627 English-medium international schools, with over 600,000 students enrolled in total.

The most popular are British and Indian curriculum schools, which charge an average of over AED 50,000 and AED 22,000 per school year, respectively.

The steep rise in cost of living in the UAE has become the main point of concern amongst expats. According to Mercer’s 2019 Cost of Living Survey, Dubai rose in rankings to become the 21st most expensive city in the world (up from being ranked 67th in 2014) and Abu Dhabi rose to 33 (up from 68 in 2014).

To add to the financial burden faced by parents, school fees had been steadily increasing every year in the UAE, up until last year. Although KHDA’s 2018 freeze on school fee hikes had offered some respite to struggling parents, we’re again looking at an approximate 2% increase in school fees for the upcoming academic year.

And besides the tuition fee, parents also have to pay for transportation or bus fee, books, stationery, uniforms, school trips and events, which could easily cost over AED 10,000 per child per academic year.

So what are the options available for parents looking to ease the burden of school fees in the UAE?

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Credit cards to the rescue

Credit cards in the UAE offer two types financial benefits with regards to school fee payments – up front discounts or cash back on school fees, and zero percent monthly installment plans for a period of 3 to 12 months.

Examples include First Abu Dhabi Bank’s GEMS Titanium Credit Card, a co-branded credit card designed to facilitate school fee payments. The FAB GEMS credit card offers a fixed discount of up to 4.25% on advance payment of tuition fee at any of the 49 GEMS schools in the UAE, along with a 0% easy payment plan for up to 12 months. This credit card also offers education protection insurance with a total coverage of AED 500,000 per child.

Other examples of credit cards that offer cash back on school-related spend include the Standard Chartered Platinum credit card. With this card you can get up to 10% cash back on school fee payments. The card also offers a 0% monthly installment plan for 6-12 months for school fee payments.

What to look out for

If you’re thinking of opting for an easy installment plan, check with the bank if it actually is zero percent or whether there are any extras such as a processing fees for setting it up. Also check about the fees involved if you miss a payment. If you miss your monthly payments, you may end up paying interest along with late payment and over-limit charges.

Beside easy installment plans, also, look out for ‘minimum spend’ requirements as well as ‘maximum cash back’ limit when using cash back credit cards.

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What about personal or education loans?

Many banks in the UAE offer personal loans to parents to help with school fee payments. Emirates NBD, ADIB, UNB and SimplyLife are a few banks that offer Education Loans for the specific purpose of paying for school or university education. Reducing rates start from as low as 4.5% per annum, and can go up to 9% for such loans.

However, parents aren’t just limited to the handful of education loans on offer in the country. All banks offer general personal loans, which can be used to pay for school or college fees among other things.

What to look out for

Make sure to include all the fees levied by the bank when calculating your total cost, besides interest or profit rates. Also check the early settlement fees and terms and conditions before signing on the dotted line.

Even though banks may not require you to transfer your salary, you might get a lower rate and a higher loan amount if you do. The rate advertised might not always be the one offered to you, so check with a bank representative about the loan terms before applying.

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