# Bank loan during probation period



## jonathanharland (Oct 23, 2014)

I have received a job offer from one of the biggest and most reputable companies in Dubai, and prior to accepting this i asked whether they would do an advance on my salary so that i can rent a villa once i get out there. I fully expected the answer to be yes, but they have said they dont do salary advances.

As i understand it. this only leaves me with the option of trying to get a bank loan, once i get to Dubai, and i am extremely reluctant to consider this, particularly as i have to serve a 6 month probation period, once i get there.

Firstly can anyone tell me if it is easy to get a bank loan for this purpose, and secondly can you tell me what will happen if i take out a bank loan and then get sacked and cant repay the loan (i think i know the answer to this but want confirmation!!!).

Many thanks.


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## Stevesolar (Dec 21, 2012)

Hi,
Welcome to the forum.
Banks wont generally give you a loan until you give them a salary certificate from your employer that confirms that you have completed your probation period and you are now a confirmed employee.
A few things that concern me about your job offer are as follows:-
Most companies only have 3 month probation period - not 6 months.
Decent companies will provide accomodation for new employees for initial period (in my wifes case for the full probation period).
Many companies will offer loans to help employees pay their rent cheques.
Your company therefore are going against the norm and this would ring big alarm bells with me - especially as many companies are really bad at paying salaries on time - the last company that i worked for owed me 4 months salary and 1 years commision on the day i left them!
Cheers
Steve


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## omrano (Jul 13, 2014)

Yes, it is easy to get bank loans, and yes, you can get it during probation period but not in the first 3 month, as a 3 month bank statement is part of the requirements to get it, that's how i got my car loan anyway.
As for whether you shoud do it or not, it is a risk, and only you can weigh if you should go for it or not after you spend a couple of months here and see if you can see yourself living and working here for some years.


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## JonGard (Aug 18, 2013)

You fully expected them to advance you money before you'd even started?

Blimey.

Given my experience I think you'll struggle until probation finished.

Also, check that your employer is on your bank's 'approved' list. You can ring around the banks and do this now without obligation.

When I was with NBD, my previous company (a massive hotel chain) also banked with them. Despite that I couldn't get a loan as my hotel was not registered for loans with them.

Good luck!


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## Stevesolar (Dec 21, 2012)

JonGard said:


> You fully expected them to advance you money before you'd even started?
> 
> Blimey.
> 
> ...


Hi,
It is not that unusual to get an advance.
The day we first arrived in Dubai - we were given a fairly large sum of money (cashiers cheque) - this was used to purchase furniture, hire a car, sort out driving licences etc.
Good point about being a "listed" company - as banks are much happier dealing with these "proper" companies.
Cheers
Steve


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## A.Abbass (Jun 28, 2014)

I have just been in your position, let me tell you some useful points :

1- There are many banks that will give you a loan in your probation period, there are even banks that will give you loans before your 1st salary is credited to the bank (Standard Chartered & HSBC).

2- It is very common you get an advance cash payment from your employer in the first few days of your employment.

3- Some employers will refuse to issue a STL (salary transfer letter) in a certain format asked by the bank during your probation period.

In my case, I asked for an advanced payment from HR, they declined, I asked for a STL and they declined as well, I complained to the COO who agreed to give me a company loan. So your employer has to help you in a way or another. And there are some decisions that won't be taken by HR so you gotta take it to a higher level.


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## The Rascal (Aug 6, 2014)

A.Abbass said:


> In my case, I asked for an advanced payment from HR, they declined, I asked for a STL and they declined as well, I complained to the COO who agreed to give me a company loan. So your employer has to help you in a way or another. And *there are some decisions that won't be taken by HR so you gotta take it to a higher level.*


And just to add HR find it easier just to say no rather than actually do their job.


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## A.Abbass (Jun 28, 2014)

The Rascal said:


> And just to add HR find it easier just to say no rather than actually do their job.


Exactly. We work in a hospital and we have to operate on all national holidays, I called HR to inquire how to apply for a compensatory leave since I have worked on a public holiday, HR said I am on probation I cannot take compensatory leaves, again I contacted the COO and she agreed.

All these rules pertaining to probation is just rubbish, and am sure you can get around it one way or another.


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## Balla Boy (Jan 3, 2015)

jonathanharland said:


> I have received a job offer from one of the biggest and most reputable companies in Dubai, and prior to accepting this i asked whether they would do an advance on my salary so that i can rent a villa once i get out there. I fully expected the answer to be yes, but they have said they dont do salary advances.
> 
> As i understand it. this only leaves me with the option of trying to get a bank loan, once i get to Dubai, and i am extremely reluctant to consider this, particularly as i have to serve a 6 month probation period, once i get there.
> 
> ...


I'm in a similar position, with the guy from the bank lined up to meet me in my office shortly after I land there to sort out the housing loan. 

My intention, sharing your worries re: probation periods, is to identify a property that I can pay for in 2 cheques, and ensure that, should the worst come to worst, half of the loan value is still sat in my account come the end of probation/confirmation date. The interest rates seem to be fairly nominal. 

Don't know how feasible that is though!


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## jonathanharland (Oct 23, 2014)

Dont see how that gets round the problem. If i borrow 150000aed from a bank during my probation period (if i can) and pay the agent in 2 cheques (75000 each), at the end of the probation period i will have 75000 sitting in my account, but i will still have the bank loan outstanding. How does that help me if my probation isn't confirmed?
The only way i can see round this is to come out and take out a monthly rental for the first 6 months for a studio and they take out a loan for a villa after the 6 month probation period. The problem with this is my family wouldn't be able to come out until the probation period has ended.
Any thoughts?


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## Balla Boy (Jan 3, 2015)

My understanding (and I'm a touch in the dark here too) is that you'll give the agent the two cheques.

From there, you're making monthly payments to the bank on the loan - effectively paying your rent to the bank, plus a marginal interest rate.

So at the end of your 6 month probation, you've paid back 6 months of the 12 month rent, and have the remaining half in your bank (assuming you can cancel the cheque and break the tenancy).

The alternative (which many seem to have used during the crash) is that if everything goes south you pretty much go straight to the airport and get out of dodge on a one way ticket.

But I'm sure that there are more experienced types around who can advise!


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## Stevesolar (Dec 21, 2012)

Balla Boy said:


> My understanding (and I'm a touch in the dark here too) is that you'll give the agent the two cheques.
> 
> From there, you're making monthly payments to the bank on the loan - effectively paying your rent to the bank, plus a marginal interest rate.
> 
> ...


Hi,
If you give someone a post dated cheque - they will try to cash it on the due date.
If you dont have the funds in your account - they can open a police case against you.
You cant cancel a post dated cheque.
The only way this "works" is if you have left the country before the due date and never intend to come back here again (even transiting through the airport on an Emirates flight).
Cheers
Steve


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## Balla Boy (Jan 3, 2015)

Stevesolar said:


> Hi,
> If you give someone a post dated cheque - they will try to cash it on the due date.
> If you dont have the funds in your account - they can open a police case against you.
> You cant cancel a post dated cheque.
> ...


Didn't realise they couldn't be cancelled. You can tell I haven't written a cheque in nearly ten years!

So if the OP (or myself) find ourselves not being confirmed at the end of a six month probation period, the options are pretty much to find another job in Dubai immediately, draw on some other funds to tide us over (which could be money burned) or leg it back to Europe and don't fly emirates in the future?

I'be better make it a good first six months then!


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## TallyHo (Aug 21, 2011)

I have had to sack people still in their probation period. I completely agree with your gut instinct that it's not wise to take out any loans until the probation period is over. 

In your feet I'd find a cheap hotel apartment for the first six months, or even a flat share, save up as much money during that period and when your probation is confirmed, have sufficient funds to rent a property. Then bring the family over. Six months isn't a long time to be apart from your family as things go. 

It's worth it not to have to worry about housing loans whilst living in Dubai. You don't know when things will go belly up and I remember the last economic collapse in 2009 when so many companies went from soaring profits to laying off half the workforce in just six months. We had so many expats doing runners, leaving behind huge debts they felt forced to take out for housing loans and car loans and it was a disaster for many of them. Given that there's been a massive collapse in oil prices in the last month or so, the ramifications will be felt in the UAE in 2015, one way or another, so it's wise to avoid any debt if possible. 

Car loans are somewhat different as you have a collateral that can be resold. 





jonathanharland said:


> Dont see how that gets round the problem. If i borrow 150000aed from a bank during my probation period (if i can) and pay the agent in 2 cheques (75000 each), at the end of the probation period i will have 75000 sitting in my account, but i will still have the bank loan outstanding. How does that help me if my probation isn't confirmed?
> The only way i can see round this is to come out and take out a monthly rental for the first 6 months for a studio and they take out a loan for a villa after the 6 month probation period. The problem with this is my family wouldn't be able to come out until the probation period has ended.
> Any thoughts?


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## Stevesolar (Dec 21, 2012)

TallyHo said:


> Car loans are somewhat different as you have a collateral that can be resold.


Except when you are in a hurry!


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## TallyHo (Aug 21, 2011)

By the way, there's an active thread on another popular expat forum for British expats (you can find it easily by googling the terms, we're not allowed to link to another forum on here). Poor man in Qatar took out a big loan and was suddenly made redundant and seems to be trapped in Qatar until he can come up with at least 80% of the remaining balance ASAP and will face jail if he can't. While the UAE isn't as draconian as Qatar thanks to liberal visa laws, it's always wise to avoid debt as much as possible in this region. 

Keep the family at home until you can afford to rent a villa without resorting to a housing loan. Six months is a long time for a probation period but you may be able to negotiate a short break midway through to go home to see them, or even fly them to the UAE for a holiday. There's no restrictions on them coming here on a tourist visa.


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## jonathanharland (Oct 23, 2014)

Many thanks for your wise words Stevesolar and Tallyho. I have been looking on dubizzle extensively and have found one villa in Mirdiff where you can pay rent monthly at a premium (by looking in short term rentals). I know this isn't common practice in Dubai, but are there any other places i could look where landlords offer monthly rentals?


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