Are financial decisions easy?

After much thought, I decided upon embarking on the second innings of my entrepreneurial journey. The path that took me to reach where I am today hasn’t been a cakewalk. At times an experience alone can unknowingly pave the way for us to take certain decisions. But were those experiences always easy? Well, not really as you would soon find out.

As much as I love venturing outdoors, summers in Dubai literally force me to stay within the limits of my perfectly air conditioned home. Being an avid fitness enthusiast, this means visiting the gym regularly. That day at the gym I was politely reminded about the impending renewal of my annual membership. As I was about to swipe my credit card, the manager informed that the loyalty programs’ benefit of my card entitled me for a complimentary renewal. Needless to say, I was overjoyed hearing this but right at that moment it struck me that all these years I have been burning a hole in my pocket unknowingly. Had I been aware of these benefits earlier, I would not have had to shell out such enormous amounts of money. I would have instead used my credit card to the best of its potential. The banker in me felt a bit cheated for having lost out on a potential savings opportunity. I realized that perhaps I wasn’t the only one carrying unexploited credit cards in their wallets.

The next instance was at the Dubai Airport, my husband was traveling and forgot an important document. Of course, I rushed to the airport in peak traffic and handed over the car to the valet. Once I handed over documents and bid adieu to dear hubby it was time to redeem my car by paying fee. I was pleasantly surprised to see my parking ticket because it offered complimentary valet parking on the credit card neatly tucked in my clutch. I had a feeling of déjà vu.

Haven’t we all faced situations similar to this? Whether we end up using all the benefits or not is a prerogative best left to the person concerned. But we must be aware of what our credit cards can offer as additional benefits apart from only paying bills and taking care of shopping trips.

It wasn’t the only time I realized my mistake and one such experience literally pushed me to the brim of my patience.

Like most expats in the UAE, we sacrifice a lot to realize the dream of building a house back in our home country. We stretch our limits to save each dirham. After my husband and I had finished finalizing the deal of our dream home, we religiously kept paying the pre-EMI. At that point, little did we know that we were in for a rude shock. Almost 2 years down the line, our loan officer informed that we had only been servicing the interest and not paying towards the loan principal. This essentially meant, we had lost out on substantial savings. To top it all, we realized that this was definitely avoidable. Coupled with these experiences, I wondered if my ignorance about the importance of proper investment decisions could affect my long term financial management.

For the uninitiated, it is always a challenge to take the smartest of financial decisions.

Especially in our 20s and 30s, when we have to decide about various financial needs like car loans, home loans, personal loans, etc., it definitely helps to have a portal that compares and assists with our financial decision making.

With a career in HR spanning over 17 years, I have met people from all walks of life seeking a simple, transparent and trusted friend who can help us with financial planning. Somebody who can read the fine print, compare various products and help us chose the best, not necessarily the cheapest. This triggered the inception of SoulWallet, an unbiased and comprehensive comparison portal for the financial products like Credit Cards, Personal Loans, Home Loans and Car Loans and more. At SoulWallet we have earnestly tried to create a virtual friend who helps make financial decisions with confidence.

10 things to know before you take a loan in UAE

10 things to know before you take a loan in UAE

It is common today that you need a loan for your day to day expenditures. In every country, banks have different rules and regulations to offer loans to its customers. In the same way, United Arab Emirates (UAE) banks have their own rules and regulations which must be followed to obtain a loan.

There are different types of loans available in UAE, for example, personal loan, car loan, home loan and business loans. For every type of loan, you have different requirements. But you should know what are the steps to take any loan you must consider them. These are the steps or things which you must know before taking any loan

  1. Rate of interest

Different moneylenders offer distinctive measures of credits at different interest rates. Complete an intensive statistical surveying on various banks and their offers. Banks typically offer loans at higher rates than conventional Islamic banks, for example, Emirates Islamic bank. Ensure you converse with numerous banks previously going to a choice. This will enable you to make a better choice for taking any type of loan.

  1. Know about the required Documents

Documents required for loans are normally

Salaried/Self-employed

  • UAE national ID card or a valid passport
  • In case the applicant is an expat then a valid residency visa for the UAE is also needed.
  • If the bank requires a salary transfer then a letter of salary transfer will also be needed.

Banks may have distinctive prerequisites for age and employing company as well.

In the event that you work for the private sector, requirements for least business period and qualified age might be higher as compared to Government sector.

  1. Know about your creditworthiness

If you have acquired any loan in the past, at that point there will be a record of your financial record with the bank. This is an extremely powerful method for knowing regardless of whether you are able to pay off any loan. If you missed a few due deadlines previously, your record score would have a tendency to be lower and banks may charge higher interest rates or give you a small loan.

In case you’re a first-time borrower, your financial assessment will be dictated by your pay, age, background and so on. : Each UAE bank will have a minimum standard salary they require you to earn in order to give you any loan.

  1. Secured and Unsecured loans

There are secured and unsecured loans which banks usually offer. Unsecured loans, for the most part, are lower in sums and charge higher rates of interests as they don’t include any guarantee to be set against the loans. In any case, acquiring an unsecured loan is generally easier than secured loans.

Secured loans include putting a collateral against the loan amount, which may be reallocated by the bank, on the off chance that you can’t reimburse the loan. Secured loans are esteemed against the estimation of the property/asset kept as collateral against the loans.

Find out your correct necessity with regards to the sort of debt that you have to dispose of, and choose whether you’ll be OK with a higher rate of interest or putting an asset as a guarantee.

  1. Least expensive ain’t the best

Try not to go for the least expensive loans with daze confidence; rather, take time to compute the genuine cost of borrowing which incorporates the loan sum, the length of the loan, reimbursement frequency, fees and interest charges. It is likewise fundamental to understand the financial guidelines the bank will follow in modifying rates.

Guarantee that whoever is advising you by taking a loan can take you through all the charges in detail and explain the total cost and hidden charges.

  1. Have alternatives

As a rule, a bank may not be your solitary alternative to acquiring a loan. On the other hand that you have a strong financial background, you might be qualified for some credit cards, for example, Citibank that would give you a chance to complete your activity and charge 0% interest for a year. Or then again in case you’re a piece of some trading organization, you may have the capacity to get cash from them at lower interest rate what banks offer.

  1. Don’t take a high amount of loan

Sometimes, banks will offer you more cash, in view of your credit assessment. Abstain from falling into these traps as this won’t just raise the weight of loans yet, in addition, you’ll wind up paying more interest on a little amount of money.

Acquiring a loan has something other than just completing the paperwork and getting the cash in hand. Numerous banks charge processing expenses, enrollment charges and so on as a rule in a level of the measure of cash you wish to get. Discover which banks offer the best arrangement, work it out a little and discover the amount you’ll have to pay the bank, including every one of the charges, expenses, and premium and so on.

  1. Know about Islamic Finance

There are numerous banks in UAE that provide sharia compliance products. Utilizing the Murabaha, the bank would typically purchase the product and after that re-sell the product to the client at a higher cost. The profit can be made in regularly scheduled payments and is referred to as the profit rate.

  1. Early settlement fee

If you are intending to take your loan for a long time, however considering paying it off before at that point, the early settlement expense turns into an imperative factor in your choice. This is an expense forced on you in the event that you choose to pay off your loan early.

  1. How you repay your debt

This is the final step to know how you can repay your loan. Banks offer from one year to five long payment plan with an alternate rate of interest for each offer. Be strategic and discover what amount you would be able to pay in EMIs (Equated Monthly Installment).

An informed and cautious approach to borrowing is the need of the hour.