# Bank loan for Expats



## KimiGonzales (May 27, 2013)

Hi guys,

I have received a verbal offer to join a company based in Dubai as a Chartered Accountant. However, it is unlikely that I will be offered anything for relocation. The salary on offer is 28k AED per month + health insurance for my wife and I + return flights home for both of us.

Could somebody please let me know the exact steps I would need to go through to obtain an expat loan from a local bank? I would need this to cover my rent (most likely for 1 year which will be 100k AED), agent fees, deposit on the flat and first month's rent for a decent sized car.

I think I would probably need a maximum of 120k AED to cover all of the above. Does this sound reasonable? What would I need to show to secure a loan? Obviously I will have no credit history and I will not have been paid when landing, so will my contract of employment be enough to secure this? How long would the whole process take from start to finish? Ideally, I would like to secure an apartment within 2 weeks of landing - would this be possible? I presume I would need to open an account with whoever I take the loan with - again, how long would this take? What would I need to open an account?

Any additional information like good banks to go to as well as interest rates for loans would also be helpful. I have to admit that the whole process seems pretty scary and overwhelming, at least initially, and I fully believe things will be good after a few months and we have a roof over our heads etc. My big fear is just taking that initial step and trying to overcome all of the above obstacles, especially that of finding a place to live very quickly. The last thing I want is for my wife and I to be in limbo, in a new country, with no roof over our heads.

Thanks in advance guys. Your thoughts and guidance would be much appreciated.


----------



## xxxxxxxxxxxxxxxxxStewartC (Mar 3, 2012)

Did you discuss a loan from your company? It is common practice for firms to pay the rental cheque as this has to be paid a year in advance.


----------



## KimiGonzales (May 27, 2013)

StewartC said:


> Did you discuss a loan from your company? It is common practice for firms to pay the rental cheque as this has to be paid a year in advance.


Hi Stewart,

Thank you for the reply. I have asked the question via the agency who found me the job (Michael Page) but he says that it is unlikely that they will loan anything. He says companies no longer do this - is this true?

I am still trying to negotiate any relocation package as well as the savings I have just now will be needed for my UK expenses for a few months (mortgage etc as I plan on keeping my house here).

Ultimately, help from my company would be great and would take so much pressure off in making the move but I do not know how forthcoming this will be. So I really need to evaluate all the options I have available before making the decision on whether to move or not.

The recruitment agent keeps saying that the first few months are going to be tough and expensive, and I understand that. His suggestion is that I come myself for a few months, stay in shared accommodation if need be, but that is out of the question as I am married and wherever I go, my wife comes too and vice versa.


----------



## w_man (Apr 16, 2010)

From my understanding companies still do provide loans towards housing if they are not directly covering the housing themselves. This is a big expense (1 or 4 cheques) so not practical for most people to handle themselves when they first arrive. Perhaps try to talk directly to the company rather than the agent? I mean, if you have already received the offer and specially if you have already accepted. Sounds like the agent doesn't want to stir anything up with your employer so isn't getting involved.

As for the loan - I might be wrong as I did this a few years ago. It's usually not that simple when you first arrive. Normally banks want to ensure you are making money so they will ask you for a 3 month bank (local bank) statement showing your salary getting deposited. So not sure if you'll be able to simply walk in to a bank and ask for a 120k loan as soon as you land. 

First, you'll need to wait until your residence visa is processed (2-4 weeks). Only then banks will even consider talking about credit with you. With me, because I send money back to Canada every month and they could see this transaction in my 3 month statement, they asked me to provide a 3 month statement from my Canadian bank to see what my monthly payments were back home eg: mortgage, credit card bills etc.

I personally had a tough time getting a loan and a local CC when I first arrive - almost for the first 6 months. Now, banks call me every day and try to give me loans and CCs. Some say that it's different if you work for a large multi-national company as they have a good relationship with a particular bank and if you end up banking with the same bank, you can sometimes get immediate access to CCs and loans. Again, something you'll have to chat with your employer and then talk to the bank.

As suggested earlier, it's best you speak with your employer and have them give you a loan for the first few months at least (if not for the first year's entire rent). Good luck with the move.


----------



## Jumeirah Jim (Jan 24, 2011)

Company policies on rent loans for the first year vary hugely. Some pay it. Some don't. 

It used to be common before the crash when to rent anywhere meant paying a year up front. That changed in 2009 when landlords started taking multiple cheques. Employers changed their policies to reflect what the landlords were doing. 

Things are going back towards one cheque now unless you want to pay a premium to the landlord to get multiple cheques. Unsurprisingly most employers have not yet reverted to offering interest free loans as pre 2008. 

Most of these rent loans where only for your first year in the UAE anyway. If you are competing against others already based here then it's fairly unlikely you will get a loan thrown in as you competitors already based here sure as hell won't be offered a rent loan


----------



## KimiGonzales (May 27, 2013)

Thank you for the replies guys.

I have not yet accepted the offer as I am awaiting to hear back from the employer re my demands for a relocation package.

The recruitment agent pretty much said what JJ has stated above - that it is unlikely that employer's pay rent for the employee. He is also giving me the spiel that the company initially wished to employ a local person but changed their mind after interviews. It obviously helped that the owner of the business is from Wales and the person I am being brought in to replace and who interviewed me, is from my home city of Glasgow. So far they have increased my salary from 25k AED per month, given me health insurance for me and my wife as well as flights home. So I have 3 out of the 4 things I was looking for and just need some relocation now.

Incidentally, I have seen a studio apartment on Dubizzle based in the Marina and it is month to month rent of 8k AED. I am thinking that this short term solution is the way forward (at least initially) and I could do this for the first 3-6 months while getting settled and arranging a loan etc.

Firstly, does the above sound reasonable (i.e. 8k AED per month) and secondly, would something like this be easy to arrange within a couple of weeks of landing?

Thanks again to all.

As I said, this move is very daunting and will need all of the help I can get to take that initial step!


----------



## w_man (Apr 16, 2010)

Nearly a 100k/year for a studio is a little steep but I guess for month-to-month, it's expected. Maybe check a few hotel apartments? Are you set with the Marina? Maybe check a few other areas where you might be able to get a 1 bedroom for even cheaper?!? 

If you can find a month-to-month deal within your budget, you should be able to do that fairly soon after you land. Depending on who you are dealing with, private or hotel apartments, you may or may not even require your residence visa (hotels normally don't require this for monthly payments). If residency is required, often providing a letter from your employer stating your residency is in process is enough for landlords to sign a lease with you.


----------



## KimiGonzales (May 27, 2013)

w_man said:


> Nearly a 100k/year for a studio is a little steep but I guess for month-to-month, it's expected. Maybe check a few hotel apartments? Are you set with the Marina? Maybe check a few other areas where you might be able to get a 1 bedroom for even cheaper?!?
> 
> If you can find a month-to-month deal within your budget, you should be able to do that fairly soon after you land. Depending on who you are dealing with, private or hotel apartments, you may or may not even require your residence visa (hotels normally don't require this for monthly payments). If residency is required, often providing a letter from your employer stating your residency is in process is enough for landlords to sign a lease with you.


Thanks again w_man. The reason for the month to month is that it would just be for short term so we have somewhere to stay until we sort something out permanently. It will be for a maximum of 6 months enabling me to sort out a bank loan for somewhere bigger and nicer and more value for money. I have also seen a few 1 bedroom apartments on month to month rent in JLT for 5-8k AED per month. From what I have heard, JLT probably isn't the best but the company I will be joining is based there so it would be quite handy (initially anyway).

The plan is to have a place to stay within 2 weeks of landing. In light of this, I take it a lot of people arrange viewings of apartments before they leave their country so they can hit the ground running as soon as they land?


----------



## exp335 (May 10, 2013)

KimiGonzales said:


> Hi guys,
> 
> I have received a verbal offer to join a company based in Dubai as a Chartered Accountant. However, it is unlikely that I will be offered anything for relocation. The salary on offer is 28k AED per month + health insurance for my wife and I + return flights home for both of us.
> 
> ...


Comments in red CHEERS :fingerscrossed:


----------



## Jumeirah Jim (Jan 24, 2011)

Also credit histories don't exist in the UAE (although there's constant news that a govt bureau will be set up inc last week) but it is a long way off

The UAE is truly 3rd world when it comes to banking even if it's 2nd world in most other aspects. 

Post dated/blank cheques (that land you in jail if dishonoured) are the norm...


----------



## KimiGonzales (May 27, 2013)

Thanks again guys. That is most helpful. I have already contacted one of the bank's about this and will contact a few others too over the weekend.

Hopefully I will get a positive response back. The only issue may be that the company I am moving to is relatively small so I am unsure if it will be on the approved list of any of the banks.

I am not overly concerned about the credit issue JJ - like you say, I was under the impression that this is not a major concern in the UAE. However, judging by how long the whole process in getting a loan and settling in etc may take, I am still edging towards paying a higher premium for a month to month rent for a few months while I get everything sorted out. Are there any major pitfalls in doing this? Is this a common step for Expats to take?

Thanks again.


----------



## Roxtec Blue (Jan 14, 2013)

KimiGonzales said:


> Thanks again guys. That is most helpful. I have already contacted one of the bank's about this and will contact a few others too over the weekend.
> 
> Hopefully I will get a positive response back. The only issue may be that the company I am moving to is relatively small so I am unsure if it will be on the approved list of any of the banks.
> 
> ...


It's not uncommon for the employer company to put you up in a serviced apartment for a month or so until you can find your feet. There are several of these buildings around the JLT area so it shouldn't be an issue for them.


----------



## KimiGonzales (May 27, 2013)

That's what I'm hoping for. It will certainly take a lot off my mind if they do offer this.


----------



## xxxxxxxxxxxxxxxxxStewartC (Mar 3, 2012)

Don't waste time or energy trying to arrange apartment viewing before you get here. Agents just won't be interested.


----------



## w_man (Apr 16, 2010)

StewartC said:


> Don't waste time or energy trying to arrange apartment viewing before you get here. Agents just won't be interested.


 
+1. You are lucky to find an agent to help you when you are here ready to move let alone someone actually helping you when you aren't even here.

Just a few months ago when I was looking to move in December and I called an agent in Oct to start looking at places. I was politely told to call back 2 weeks before moving - anything earlier is a waste of his time.

JLT isn't really that bad of a place. If you can arrange for a reasonably priced hotel apartment in JLT for the first week or so, it'll give you some time to check out some of the communities and decide where you want to be. I wouldn't worry about it too much - you can easily find something month-to-month but as stated earlier, you'll just have to pay a premium.

Also agree with another poster. Certainly negotiate with your employer to put you up in to a hotel for the first 2-4 weeks so you can get settled. MOST people I talked to have had this option.


----------



## KimiGonzales (May 27, 2013)

Thanks again guys.

I'll try to get put up in a hotel for 2-4 weeks, then get month-to-month in the short term and look for something better once we have a roof over our heads.


----------



## TallyHo (Aug 21, 2011)

If you're getting minimal assistance from your company then the most cost effective way of setting up shop in Dubai would be:

1. Get a monthly studio flat in Discovery Gardens or even International City for 4,000 AED/month.

2. Rent a car for 1600 AED a month.

You'll have to do it for a few months while you build up the savings to be able to rent and equip a proper company. 

If you're willing to put up with less than ideal locations and accommodation for six months you should be able to eventually get to where you want to be. For your first year in Dubai you may want to get a 1-bedroom flat for 70K rather than 2-bedrooms for 100K, and that'll allow you to save more money and in your second year you can upgrade into something bigger. 

I strongly recommend avoiding taking out loans of any type, except perhaps for a car. What happens if you manage to get a loan for 100K for a flat and two months later your company makes you redundant? You really don't want to take on any kind of debt until you have a much better idea of the working environment and company stability (and you mention that you work for a small company, which is more prone to boom/bust cycles). 

I'll rehash this: you have a decent if not brilliant salary, you'll have a pleasant lifestyle if you're not extravagant, but you do need to be practical about the way this place operates, the real risk of job instability and the dangers of taking out huge loans that you can't easily pay off if everything goes wrong.


----------



## Roxtec Blue (Jan 14, 2013)

TallyHo said:


> If you're getting minimal assistance from your company then the most cost effective way of setting up shop in Dubai would be:
> 
> 1. Get a monthly studio flat in Discovery Gardens or even International City for 4,000 AED/month.
> 
> ...


As Tally Ho said Dubai is littered with the dreams of failed promises and hopes.

It makes sense when first getting here to keep all your personal liabilities to a minimum until you get a good feel for your company. 

Unfortunately, as an expat you do not have the employment protection you have in Europe and it is becoming an even more cut throat "cost down" marketplace. If you can be replaced by somebody at less cost you surely will be. It's interesting that now my children have flown the nest and my package no longer has a schools element how much more employable I have become. Skills set and qualifications + everything else is unaltered.

Ho hum. Two other guys+ families have been "let go" and replaced by single guys from Malaysia. Great guys, but one hell of a lot less cost. Before you sign for the nice shiny motor please have a good think about your wants and needs as it could end up being dumped at the airport as you have to get out of the country PDQ.

Having said all the bad stuff my family and I have had great times and adventures here and other parts of the GCC. Two of my children teach Arabic now. One in NZ and one in the UK. My son keeps the house and Bimmer warm in the UK whilst trying to keep his head above water in the great job race. :fingerscrossed:


----------



## KimiGonzales (May 27, 2013)

Thank you again for the comments guys. The job security issue is one that worries me to be honest. Do you think it makes any difference that the owner of the business is Welsh rather than Arab? I've been informed that I've already been selected ahead of locals who would've been cheaper than me as I have the ICAS qualification which they are unlikely to have. Apparently, this qualification is highly sought after in Dubai - does anyone know if this is true?


----------



## Canuck_Sens (Nov 16, 2010)

KimiGonzales said:


> Do you think it makes any difference that the owner of the business is Welsh rather than Arab? I've been informed that I've already been selected ahead of locals who would've been cheaper than me as I have the ICAS qualification which they are unlikely to have. Apparently, this qualification is highly sought after in Dubai - does anyone know if this is true?


Hi Gonzales,

Most locals don't have the so called recognized qualifications. Depending on your company (if it is a good one that's what I mean) they will value your certification plus experience that you are bringing on the table.  However this is changing, Arabs are pursuing these qualifications.

I would not hire anybody that holds a certification without proper experience. there are tons of people like that.

If there is another guy who has the same qualifications of yours but is "cheaper" meaning he is coming from somewhere where the cost of living is low and pay is less compared to your home country chances are you are getting replaced down the road. In a labour market where you can find good people from almost anywhere this is really a potential outcome. So if you belong to a working force that is qualified and at the same time there is a shortage worldwide you are probably good until things change.


Loan. 

If you need to take a loan, try first in your home country. Some banks offer that. If your home country charges the same interest compared to the UAE market and the currency is stable against the US dollar you can take a loan in the UAE commensurate to your investments held in your home country and sort of hedge it. Should you lose your job or else you can easily settle your dues.


----------



## KimiGonzales (May 27, 2013)

Thanks Canuck.

Job security seems to be a bit of an issue but as far as I am aware, I will essentially be the sole member of the finance team so if there was to be any recruiting for my position, it would most likely be done by myself, much like how the previous finance person interviewed me (he is leaving the role in a few weeks and will continue as a consultant during the handover period).

As for the loan, the aim is not to take one at all. I will hopefully get something month-to-month in JLT when we land and then evaluate our options. I am still awaiting the employer to get back to me about assistance etc so we may be able to work something out with them paying the rent etc.

I will keep you all posted with the progress.

Again, many thanks to all for their advice and thoughts so far. It is greatly appreciated by myself and my wife.


----------



## Canuck_Sens (Nov 16, 2010)

KimiGonzales said:


> Job security seems to be a bit of an issue but as far as I am aware, I will essentially be the sole member of the finance team so if there was to be any recruiting for my position, it would most likely be done by myself, much like how the previous finance person interviewed me


 Oh you are the boss how nice is that ( in your department)!



KimiGonzales said:


> As for the loan, ... I will hopefully get something month-to-month in JLT .... I am still awaiting the employer to get back to me about assistance .... paying the rent


Banks do offer Loans for rental purposes. It is advisable to pay in cash at once your rental because you may save 10 K AED in one cheque. Well you gotta do the maths. Interest is high here. Do not assume they use reducing balance rate, they use profit rates. There are several posts in this forum explaining how to calculate the real charge.


----------

