# rental loans



## micklo (Dec 28, 2014)

Hi all

Is it common practice in Dubai for employer's to provide a loan to help their employers with advanced rent payments?

I ask because im a finance director in London who is moving to our Dubai office and want to get an idea as some of the staff have been asking about this. In London we give travel loans to our employees which is repaid in instalments from their salary and wondered if you can share any knowledge on similar practice's in Dubai

Thanks


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## mdm26 (Feb 15, 2015)

It varies. I've moved over from London recently and my company who I relocated with gives a housing allowance loan which you can pay back through your wages. It should be detailed in your contract offer of this facility. But from speaking to others its not always common practice so it varies from company to company.


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## arabianhorse (Nov 13, 2013)

Good establishments do - especially employees who are first relocating to UAE.

May not be an issue for highly paid expats, but those on modest salaries will find it hard pressed to come up with the lump sum upfornt


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## The Rascal (Aug 6, 2014)

As Dobbin above says, to give an interest free accom loan is seen as a huge plus, even if it's in 2 or 4 payments it will be a massive help for anyone. In the UK if you had to pay a full year outright (and from £20,000 a year rent), is that easily affordable?


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## rsinner (Feb 3, 2009)

Fairly common practice for employers to pay housing allowance for the year, in advance, in one or two installments. (to be reimbursed if the employee leaves during the year)

A lot of companies also used to rent places on behalf of employees, but that practice is getting rarer except for very senior employees.


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## arabianhorse (Nov 13, 2013)

The Rascal said:


> As Dobbin above says, to give an interest free accom loan is seen as a huge plus, even if it's in 2 or 4 payments it will be a massive help for anyone. In the UK if you had to pay a full year outright (and from £20,000 a year rent), is that easily affordable?


Dobbin?

Thoroughbred mate !!!


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## TallyHo (Aug 21, 2011)

Adding to the chorus. Yes, but getting less common as time goes on.

Being able to offer housing allowance advances will make it easier to recruit and retain valued employees. 

The way it works is:

Package is structured as 15k base, 5K housing and 2K transportation. Normally employee would be paid the 22k each month.

Employee finds housing worth 60k/year in two cheques. Asks for a loan. You give him the cheque for the first 30k, and deduct 5k each month from his package over the next six months, and repeat the process for second cheque/second six months.

If employee leaves midway through a loan period, he must refund the oustanding balance. 

The trend is shifting away from housing loans because a) companies don't like advancing too much money to employees (companies learned this the hard way in the 2008-2010 recession when many employees were made redundant) and b) it's a big hit to the cash flow if you have too many housing loan cheques to write out. 

If I were finance director of a new office opening up in the UAE, I'd offer housing loans for new employees recruited from overseas, and only in their first year of employment. After that you're on your own. 



micklo said:


> Hi all
> 
> Is it common practice in Dubai for employer's to provide a loan to help their employers with advanced rent payments?
> 
> ...


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## micklo (Dec 28, 2014)

Very helpful guys

Thanks for all your feedback.

I'm going to go with the first year only option


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## arabianhorse (Nov 13, 2013)

micklo said:


> Very helpful guys
> 
> Thanks for all your feedback.
> 
> I'm going to go with the first year only option


Miserable accountant.

Grow a heart !!!


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## The Rascal (Aug 6, 2014)

micklo said:


> Very helpful guys
> 
> Thanks for all your feedback.
> 
> I'm going to go with the first year only option


To be fair, to retain your staff a 4 payment option would cover all your costs too.


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## arabianhorse (Nov 13, 2013)

The Rascal said:


> To be fair, to retain your staff a 4 payment option would cover all your costs too.


Nah - let them eat cake

The peasants

Should be grateful they have a job !!!


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## The Rascal (Aug 6, 2014)

arabianhorse said:


> Nah - let them eat cake
> 
> The peasants
> 
> Should be grateful they have a job !!!


In fact they should pay the FD for allowing them to have a job...


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## rsinner (Feb 3, 2009)

Or you can promise them upfront payments and scr3w them once they have taken the job and moved here.
If they leave, you can bandy the "cost cutting" that has been achieved in the company's over inflated cost base


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