Debt service ratio on personal loan and credit cards in Dubai/UAE is also known as the Debt burden ratio in Dubai/UAE usually abbreviated as DBR/DSR, and it is a very crucial tool for the issuance of a personal loan or credit card in Dubai/UAE. This ratio is used by all banks in Dubai and it is a tool implemented by the central bank of UAE to make sure that borrowers/clients, will not burden themselves by over-borrowing on personal loans and credit cards in Dubai/UAE. This ration is calculated on the fixed monthly salary, plus allowance, commissions or bonuses, to come up with the total income, and from that total income, that is where the DBR/DSR in Dubai/UAE emanates from. This ratio should be considered for all personal loan and Credit card facilities, be it salary transfer personal loan, non-salary transfer personal loan or credit cards in Dubai/UAE.

DBR/ DSR Calculation-Parameters

Banks in Dubai/UAE calculate the debt burden ratio or debt service ratio as a proportion of the debts of financial commitments you are paying, against the income you earn on a monthly basis. Banks in Dubai differ on these calculations, with some considering only the salary as per salary certificate, and some consider the salary as per salary certificate plus allowances. Dunia finance LLC for example, considers the DBR/DSR in Dubai/UAE as the salary as per salary certificate plus allowances such as medical insurance, life assurance, overtime, commissions, air tickets, uniforms whilst on the other hand a financial institution like Finance house pjsc, only considers the salary as per salary certificate plus accommodation but they do not take into account other allowances such as medical insurance, life assurance, overtime, commissions, air tickets, uniforms etc.

DBR/ DSR Calculation

The debt burden ration in Dubai/UAE is always calculated as 50% of the total income which is recognised by the disbursing bank or financial institution in Dubai/UAE.I hereby exemplify:

Jamal works for Dnata as a customer services representative in Dubai and has the following package:

  • Basic Salary AED10500
  • Overtime AED8000
  • Medical insurance ***********provided
  • Transport ***********************provided
  • Air ticket ***************************provided
  • Uniform ******************************provided
  • Accommodation ***********************provided

Notes to DBR/ DSR Calculation

It should be noted that when you have allowances and benefits from your workplace as an employee on a job in Dubai/UAE, each and every benefit has a monetary value attaché to it by banks, and they use this value to calculate your DBR/DRS in Dubai/UAE. Medical insurance is accounted for as AED200, transport provided by the company is accounted for as AED100, an air ticket to home country is accounted for as 125 or the amount divided by 12 (whichever is higher), uniform is placed a AED100 value whilst accommodation has a whopping AED750 value place on it for personal loans or Credit cards’ DBR/DSR Calculation. It is only logical to attach these values since the client, will not be burdened to folk out more money for a resource being provided by the company.

If Jamal for instance has an existing debt of AED6500 on a personal loan he took, then this is how Dunia Finance and Finance House do the DBR/DSR calculation.

Dunia Finance DBR Calculation

Salary + Overtime + insurance + Transport + Air Ticket + Uniform + Accommodation=Total Income

AED10500+AED8000+AED200+AED100+AED125+AED100+AED750 = AED19775

Finance House DBR Calculation

  • Salary + Accommodation=Total Income
  • Accommodation is calculated as 25% of income
  • AED10500+ Accommodation (25%*10500) = AED13125
  • Assuming that the client has an existing emi of AED6500

In Dunia

(6500/19775)*100= 32.9% DBR/DSR, this DBR/DSR Ratio is below 50% thus in Dunia Finance, the client may get AED100000 more comfortably


In Finance House

(6500/13125)*100= 49.5% DBR/DSR , this DBR/DSR Ratio is below approximately at 50% thus in Finance House, the client’s DBR/DSR is too high and thus the personal loan /Credit card is rejected.

The same client, approaching two different banks, in the same country, with the same set of financial position is approved in one bank, but in the other bank, he/she does not meet the criteria

DBR/DSR is very important to the bank involved, the client himself and the Central bank of UAE

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