After the approval of a personal loan application in Dubai/UAE, the disbursement of funds will only take place if the client/customer, meets a list of requirements set either by the Bank in Dubai, or by the Central bank of UAE. Once these conditions are met, disbursement will follow through.
- 1) Post-dated cheques (PDC)-
- 2) Direct Debit Authority-
- 3) Undated security cheque-
- 4) Consent-
- 5) Customer Acknowledgement-
PDC are required once the approval is effected, and banks in Dubai/UAE usually require 1 PDC for every 6 months, this therefore implies that if a customer is availing a 4 year tenure, then a total of 8 PDC security cheques are required from that particular customer. The PDC Cheques should come from the same bank account in Dubai/UAE, were the customer is receiving their salary.
The Direct debit authority which is known in Dubai/UAE as the DDA form, should be signed, and well filled in by the client, before the disbursement of the personal loan in Dubai/UAE may be effected. The DDA gives the disbursing bank in Dubai, the authority to debit the emi installment (computed by the emi calculator or loan calculator ), directly from either the current account or savings account of the applying customer. This means that , on every day of the month, for example 3rd, the DDA is effected, and a series of payments e.g. AED 2’937.50 is debited every month for the next 48 months , on a personal loan amounting to AED 100’000. Just like the PDC, The DDA Cheques should be effected on the same bank account in Dubai/UAE, were the customer is receiving their salary.
The approved personal loan application, should be secured by an undated security cheque, one which will cover the principal amount and the interest for the whole tenure. This is a single cheque, with the whole equated amount plus principal. The Security Cheque should be effected on the same bank account in , were the client is receiving their salary.
This simply requires the client to transfer the funds to his/her account or to issue a manager’s cheque along with his/her consent to deduct applicable processing, insurance, early settlement fees (as applicable) etc.; from the disbursement. This consent should be clearly signed and dated by the client in Dubai/UAE before the disbursement of the loan amount applied for.
The client, after applying for the personal loan, getting it approved, and providing all the necessary documentation, should be provided a personal loan repayment schedule, which they should go through with their financial advisor , lawyer, accountant or any third party assisting them to make decisions, thereafter, as a pre-condition to the disbursal, the client should sign the repayment schedule, and acknowledge that they are able to stick and honour that schedule from the time the disbursement occurs, up to the end of the personal loan facility applied for through a bank in Dubai/UAE. This schedule is signed, and submitted together with the above mentioned requirements, as a precondition to the disbursal of funds.
As a rule of thumbs, PDCs & security cheques should be drawn on the same bank account into which the salary is transferred , with the following exceptions :-
- a) In case of a borrower who is a bank employee with senior/similar positions with salary credited to a staff account; PDC for monthly instalments may be drawn on an account maintained with any bank in the UAE. However, security cheque must be drawn on the salary credited account (3 months bank statement to be submitted)
- b) In case of a borrower whose salary is credited to a savings account, PDC’s for monthly installments and security cheque may be drawn on an operative account maintained with any bank in UAE (3 months’ bank statement to be submitted) Once all these conditions are met, the personal loan application for the client is fully effected and funds will be dully credited to the account of the client, and the loan application is considered to be in full swing.