Experts warn against excessive travel borrowing

Hussam Abdulnabi (Dubai)

Banks operating in the UAE have opened their cash registers to provide liquidity and funding for customers wishing to obtain loans and financing to travel abroad for tourism, following the resumption of tourism activity and increased willingness to travel. abroad in the summer season, after death. of precautions and closures that accompanied the spread of the Corona virus. » Over the last two years. This comes in the wake of renewed warnings by financial experts against surrendering to bank offers and using borrowing for consumer and entertainment purposes that go beyond the capabilities of community members and ultimately push them to stumble, and then the possibility of falling under the law.

Temptations of offers
Banks announced numerous easy-to-use personal finance offers that enable customers to quickly and easily access money through simplified documents and higher pre-approved amounts, while enabling UAE nationals to pay their installments. seen after up to 120 days, noting that interest rates on loans Personal amounts are 3.79% per annum (variable) and 3.99% (fixed).
One of the banks offered individual clients working for their account, the option to take out a loan to meet their financial needs, worth up to 300,000 dirhams, even without stating the purpose of applying for the loan, as the loan does not require it. the presence of guarantees or a person performing the guarantee process, taking the full value of the loan and without stating the ultimate purpose of using the loan funds. The Bank confirmed that this loan is available to both citizens and residents of the UAE and requires that the average minimum balance within 6 months be 25,000 dirhams, except for the start-up period of not less than two years, and the repayment period of The loan must be no more than 4 years old, which shows that it is possible to use personal loans to finance any financial issue, from paying for a medical emergency, to marriage, renovating a home or even paying for education and travel abroad. for a summer vacation.
For clients who have taken out a personal loan and want to have more money to cover their financial issues, banks have provided a personal loan balance enhancement service for personal loan clients who pay regularly and need additional financing, as this program will be offered to you with competitive, fixed and flexible interest rates and all clients can benefit from this program Existing Personal Loans who have paid the minimum 3 installments of their loan.

preliminary planning
In detail, Salah Al-Halyan, financial advisor and founder of the Bayzat site, expressed surprise at some people borrowing from banks to manage the family’s travel expenses over the summer each year, warning that not to be tempted. of travel abroad in the light of offers announced by tourist destinations.Different banks, even the same, that are in the race to offer special offers for loans for consumer purposes.
Al-Halyan stressed the need for locals to plan to travel abroad shortly before the summer season, providing a percentage of income of not less than 5% for travel and vacation purposes, stressing that borrowing for travel purposes is a problem in itself, so borrowing should be for rational reasons or for urgent reasons and not for consumable reasons.
Al-Halyan warned against excessive use of credit cards during travel trip so as not to fall prey to debt. He stressed that the lack of attention to the use of credit cards when planning travel increases the problem of debts that can accumulate in light of high interest rates for delays, which negatively affects those who want to travel and those who can not afford to travel. sufficient financial. to look for tourist destinations near the state and to stay in hotels.Economic, instead of staying in five-star hotels in the city center.

Quick breaks
Mohamed Shaker, the financial expert, warned community members not to use borrowing for entertainment purposes and use the value of credit to become a way of life beyond their current capabilities. The same question in advance, which is: A Is this quick break equal to being involved in a bank debt for several years and the accompanying psychological and material pressures and the possibility of non-payment, and then submission under the law?
Shaker advised that the monthly loan installment, which has been agreed with the bank to be repaid, should in fact be in proportion to the monthly liabilities and the client can repay it in case of any emergency developments outside the account, putting in apparently the risk of dealing with the debt problem by continuing to borrow again, as this leads to getting into a vicious circle of debt.

Recreational purposes
Hisham Al-Maghraby, a banking expert, stressed the importance of not expanding bank customers to borrow for recreational purposes of consumers, such as traveling abroad for tourism each year, and not spending amounts during travel that exceed the ability of their financial and ability to repay the loan. loads.
He said there are some families who borrow from banks in the hope that the money will be available in the future, such as receiving “incentives” or “bonds”, and then use those funds to repay loan obligations. , which is a big mistake. , as the cost of vacation should be studied. The accuracy of the family and the availability of financial ability to do so, given the need for the monthly installment of financing to represent an acceptable percentage of income, so that there is no default in the future, advising bank customers in generally communicate with financial advisors provided by banks to discuss their financial problems and the payment difficulties they are going through, in order to help them ensure they maintain a clean credit history as they assist the client in resolving of his financial problems and offer the best possible options and alternative solutions to overcome the payment challenges he may face.

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