In 2012 The Central Bank of UAE decided to issue unified forms across all type of banks and loans, ending years of controversy over such contracts and persistent complaints by borrowers. These forms are binding to all the 51 banks and other financing firms operating in UAE. This is as per the report published by Emirates 24/7. Due to such standardized procedures it is easier to avoid common mistakes while getting loans of different types. If you are planning to get an investment loan in UAE here are common mistakes to avoid.
Not Looking Around
The biggest mistake for obtaining such a loan is to settle on the first company you like. When you need to borrow money for any type of loan, you must go through hours of research and compare policies by at least three different companies. After browsing for an installment loan in various companies, you can manage to get the most appropriate deal on your terms.
Not Checking your Credit Score
If you are planning to get a loan make sure to check your credit score. Not doing so can result in more expenditure. However if you have a decent credit score, you may not need to worry about it. In case you have a low score, opt to postpone your installment loan and get it only after you have fixed your credit score. In the mean time you can catch and rectify errors in your score. Credit bureaus are obligated to investigate any errors or questionable transactions in a short time frame. In case of apparent inaccuracies you can report them with proper documentation of the problem.
Asking No Questions
If you are borrowing money from a third party, it is always a good idea to ask as many questions as you can to get more insight into the various terms and conditions. Express all your thoughts and concerns in a truthful manner to get the added benefit of personalizing your loan.
Closing Long Term Credit Lines and Opening New Ones
If you have been conscientious about your payments and low balance, it can harm your score. Once you close a particular credit line, your overall score can be severely impacted. For example, if you close a credit line functional for the past 10 years, you automatically erase a decade of your credit history. Once a credit line is closed, it will no longer add to your score. This is true even if you have paid off your debt on time. Statistically, people with six enquirers or more on their credit report can be 8 times more likely to declare bankruptcy than people without any enquirers.