The Debt Panel: ‘Can I transfer a UAE loan to Saudi Arabia?’

The Dubai resident has accepted a new job in the kingdom and would prefer to pay monthly instalments through a local branch of his bank

Nick Donaldson / Getty Images

In 2019, I took out a four-year personal loan with my bank. I have just 14 months left on the tenure of the loan and the outstanding balance is Dh125,000 ($34,036).

I have been a customer of my bank since 2009, the year that I arrived in the UAE.

However, I have been offered a new job in Saudi Arabia and plan to leave the Emirates in the next three to four months.

I know that my bank also has branches in Saudi Arabia, and wondered if it was possible to transfer my loan there to continue paying it off.

I am aware of cases in which banks have allowed this type of request and I believe it would be a better arrangement for both parties.

However, I am not sure how to begin this process.

Can you explain the procedure to transfer my debt from the UAE to Saudi Arabia and the documents I would need to achieve this? MW, Dubai

Debt panellist 1: R Deepakchandran, group head of retail products at Emirates NBD

When you apply for a loan, the lender evaluates multiple criteria to assess your creditworthiness.

These may include your employment track record, credit rating, income and debt-to-income ratio. Based on these factors, the lender determines the loan amount you qualify for and the associated interest rates.

If you are considering relocating to a new country, it is crucial to recognise that even if it’s a sister company, the loan approval process may differ in the new market.

This could include different lending regulations, interest rates and loan criteria that could impact your ability to transfer your loan. Therefore, transferring your loan to a new geographical area may not always be feasible or in your interest.

It is advisable to continue repaying your loan via digital payments if you have a short remaining term. Nevertheless, I would also recommend that you discuss your options with your lender and seek advice from them before making any decision.

I wish you the very best in finding a solution to your query, as well as for your new job in Saudi Arabia.

Debt panellist 2: Alison Soltani, founder of Leap Savvy Savers

The first thing to do is to contact the bank and explain your situation. Your honesty and history of reliable repayments will stand you in good stead.

You are more likely to negotiate an arrangement whereby you can continue to make repayments to your current bank when you move away.

Every bank and financial institution has a different policy and approach to situations like these, but they will accept repayments from customers who have relocated abroad, so long as there is an official agreement between the two parties.

Opening an account with the Saudi Arabian branch of your bank may be worthwhile as there might be deals on money transfers between the accounts.

Costs and fees involved in money transfers to pay the loan instalments are a consideration, so deals on currency exchange will be beneficial.

If you receive an end-of-service gratuity payment and you do not immediately need it, paying off the loan in full or a significant amount of it before you leave will reduce the loan tenure. This will also reduce the total interest payments.

Watch: Understanding your finances

Documents the bank may request to continue repaying the loan from abroad include your offer letter or contract from your prospective employer, so they can assess your payment capacity — your ability to continue paying the instalments in a timely and reliable manner.

Other factors that may be considered in the negotiation include the possibility of having a co-borrower or guarantor, history of any bounced cheques or loan defaults, assets in the UAE and home country, maintenance needs of the family, your general health and age.

If you do not believe that the bank has offered you an acceptable deal, you can file a complaint with the UAE Central Bank on their website or by calling 800 22823.

You could also hire a legal specialist to oversee the contract terms before you leave to ensure absolute clarity, although these measures may not be necessary.

Debt panellist 3: Felicity Glover, personal finance editor at The National

I know your question is about transferring your UAE loan to Saudi Arabia, but have you considered the possibility of keeping the account open and paying it off from the kingdom?

Some banks have different policies on allowing customers to pay off loans from abroad, but it is possible to do and happens quite frequently in the UAE as people’s circumstances change.

It is also worth noting that it is not a legal requirement to live in the UAE to pay off a debt.

I think this would be a less complicated process for you to pursue, particularly if you open an account with the same bank in Saudi Arabia to facilitate easier transfers to your UAE bank.

Your best course of action is to simply ask your UAE bank if this is possible.

I would suggest a face-to-face meeting with a senior bank employee in the loans department, who has the authority to approve this type of request.

As my fellow panellists advise, you will need evidence to prove that you have the funds to continue paying off the loan from another country, such as your new employment contract, letter of offer and evidence of your new salary.

A good payment history will also be in your favour.

Being honest with your bank is vital, as it will be alerted to your final salary when it is transferred into your account. This means that it will be frozen and put towards any debt you have with the bank, be it an outstanding amount on a credit card, personal loan, mortgage or car finance.

Another option is to pay off the loan in full before you leave for Saudi Arabia — perhaps you have an investment that you could liquidate or other means to do this?

You could also apply for a loan with the same bank in Saudi Arabia and use that to pay off your loan in the UAE.

However, I don’t believe this would be a smart move financially as it would incur more costs and could mean that the interest rate is higher, as well as lengthen the time you are in debt.

I wish you all the best with your new job.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to [e-mail]