I have personal loan of Dh124,600 as well as about Dh7,450 outstanding on two credit cards (Dh3,269 from the same bank as the loan and Dh4,183 on a card from another bank). I want to find a way to settle my debts before I end up in jail. I built up the debt by taking out a loan for Dh60,000 to help my wife establish her business in our home country of Ethiopia. Then after six months I topped it up with a further Dh50,000 to strengthen the business. Despite all her efforts she was not successful because she was working with an untrustworthy relative. So, I took a final top up of Dh30,000 to close the business and clear her liabilities. However, I also used some of that money for my budget deficiencies here in the UAE and to visit my family for a holiday because I have no savings. I work as a medical microbiologist in a government hospital earning Dh7,725. The money I owe is:
• Bank loan repayment: Dh3,275
• Room rent: Dh3,500 (this is the last installment and I will not renew)
• Utility bill: Dh1,087
• Credit cards: Dh7,452 – my minimum payments total Dh1,087
If you look at my expenditure below, I currently cannot pay off my credit card:
• Bank loan repayment: Dh3,275
• Family: Dh3,000 to support my mother, wife and three daughters as well as my ex-wife and two sons
• General expenses in the UAE: Dh1,450
What can I do to resolve this situation? MA, Ajman
Debt panellist 1: Philip King, the head of retail banking at Abu Dhabi Islamic Bank
I’m glad you have recognised your predicament and are seeking financial advice before it is too late. The short answer to your question is fairly straightforward – you need to find a way to clear your debt, which is certainly doable, in a pragmatic and disciplined manner.
The first step should be to clear the amount outstanding on your cards, as these will be charging the highest rate. At Dh7,450, this is achievable in your case and should be your first goal. Speak to your bank, as they may allow you to convert your remaining card debt into the existing personal finance to create a consolidated single monthly payment. This will simplify your journey out of debt while also lowering repayments currently being eaten up by high rates. At the same time, you should discuss the option of decreasing the monthly payment so that you can agree a sustainable programme of repayments that is achievable. For example, if you could agree a monthly repayment of around Dh3,000, you will eventually pay the entire debt off and be debt free in just over three years.
Over the long-term, and where possible, I’m afraid you must also attempt to lower your monthly expenses. The most obvious option, which you have already referenced in your question, is your monthly rent – moving to lower cost accommodations will give you more flexibility in finance payments while allowing you to support your family. If it is possible to switch to cheaper utility packages, then this should also be a priority. In addition, if you can afford to send less money home, even for a short period, this will also benefit you in the long run. Selling any assets that you don’t need would also help raise money to contribute to rebalancing your financial situation.
So, in summary, approach your bank for a consolidation of the cards into one finance program and ask whether you can lower your monthly repayment commitment. Make adjustments to your current outgoings, such as how much money you are sending home to family or your living expenses, until you are on track with your repayments, and, if possible, sell any superfluous assets to shore up your finances.
_________
Read more:
The Debt Panel: British couple struggling to shift 'niggly' Dh80,000 credit card debt
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Debt panellist 2: Ambareen Musa, founder and chief executive of Souqalmal.com
Since you mention that your personal loan and one of the credit cards is from the same bank, how about approaching this bank to consolidate all three of your debts? Even if the bank only agrees to consolidate the two debts on its books, it would leave you with a much more manageable repayment schedule. Debt consolidation would help roll your existing loan and credit card debt into one consolidated loan and lower your monthly repayments. But you should aim to obtain a lower interest rate under this new arrangement.
Now, you also cannot ignore the credit card debt, which doesn't seem huge so far, but can quickly multiply if you're not careful. With average annual credit card interest rates in the UAE close to 40 per cent (known as the Annual Percentage Rate or APR), credit card debt can spiral out of your control. If you're able to secure a debt consolidation for two of your debts, make it your priority to repay and close down the other credit card through your own means.
Your salary of Dh7,725 can only stretch so much. So it would be a good idea to look for some part-time work or freelance opportunities to help you unlock an additional income stream. Here's an idea: since you are a microbiologist, how about looking for a temporary teaching position at a university or school, or even consider a tutoring opportunity. Make sure to first consider the legal aspects of taking on such employment.
In the future, be careful how you use debt. Don't take out a loan unless you have both a Plan A and Plan B to keep up with the repayments.
_________
Read more:
The Debt Panel: Customer service agent earning Dh6,000 built up Dh200,000 in debt investing in a friend's business
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Debt panellist 3: Michael Routledge, the founder of the debt advice site savememoney.ae.
I am unsure why you were offered over Dh124,000 in loans with an income of Dh7,725. The repayments are around 50 per cent of your total salary so with the credit cards, and other commitments on top of that, your financial burden far outweighs your monthly income.
One major issue I see with the information you’ve provided is that even without the debt you can barely afford to support yourself and your family, so you’re really going to have to cut costs as far as your rent/utilities are concerned.
In cases such as this you have two real options:
• Option 1: Visit the download page of our site and use the tools we provide free of charge to show a transparent view of your finances to your lenders. In addition to this I suggest that you contact the Al Etihad Credit Bureau and request your credit report, this will add weight to your request to reschedule your debts with your lenders so hopefully you can reduce your monthly outgoings with both creditors and others.
• Option 2: Contact one of the many debt-rescheduling companies within the UAE and request they take your case on with your creditors. You need to pay for this service, however it may be money well spent in your case if you don’t have the confidence to go with option 1. While Savememoney.ae does not affiliate with any of the UAE’s debt management firms, I have personally spent some time with Gaurav Bhalla, the chief executive of Lotus Loans and Reschedule Services during my time working with the National’s Debt Panel initiative and I know he has had a lot of success helping people with their debt issues in the UAE.
Good luck with your journey to become debt free, and please feel free to contact us should you require any further guidance.
On this panel this week: Philip King, the head of retail banking at Abu Dhabi Islamic Bank; Ambareen Musa, founder and chief executive of Souqalmal.com and Michael Routledge, the founder of the debt advice site savememoney.ae.
The Debt Panel is a weekly online column to help readers tackle their debts more effectively. If you have a question for the panel, write to pf@thenational.ae.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Results
3pm: Handicap (PA) Dh40,000 (Dirt) 1,000m; Winner: Dhafra, Antonio Fresu (jockey), Eric Lemartinel (trainer)
3.30pm: Maiden (PA) Dh40,000 (D) 2,000m; Winner: Al Ajayib, Antonio Fresu, Eric Lemartinel
4pm: Handicap (PA) Dh40,000 (D) 1,700m; Winner: Ashtr, Abdul Aziz Al Balushi, Majed Al Jahouri
4.30pm: Handicap (TB) Dh40,000 (D) 1,700m; Winner: Falcon Claws, Szczepan Mazur, Doug Watson
5pm: Sheikh Dr Sultan bin Khalifa Al Nahyan Cup – Prestige Handicap (PA) Dh100,000 (D) 1,700m; Winner: Al Mufham SB, Al Moatasem Al Balushi, Badar Al Hajri
5.30pm: Sharjah Marathon – Handicap (PA) Dh70,000 (D) 2,700m; Winner: Asraa Min Al Talqa, Al Moatasem Al Balushi, Helal Al Alawi
How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Company%20Profile
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First Person
Richard Flanagan
Chatto & Windus
COMPANY%20PROFILE
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TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
The specs: 2018 Ducati SuperSport S
Price, base / as tested: Dh74,900 / Dh85,900
Engine: 937cc
Transmission: Six-speed gearbox
Power: 110hp @ 9,000rpm
Torque: 93Nm @ 6,500rpm
Fuel economy, combined: 5.9L / 100km
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Important questions to consider
1. Where on the plane does my pet travel?
There are different types of travel available for pets:
- Manifest cargo
- Excess luggage in the hold
- Excess luggage in the cabin
Each option is safe. The feasibility of each option is based on the size and breed of your pet, the airline they are traveling on and country they are travelling to.
2. What is the difference between my pet traveling as manifest cargo or as excess luggage?
If traveling as manifest cargo, your pet is traveling in the front hold of the plane and can travel with or without you being on the same plane. The cost of your pets travel is based on volumetric weight, in other words, the size of their travel crate.
If traveling as excess luggage, your pet will be in the rear hold of the plane and must be traveling under the ticket of a human passenger. The cost of your pets travel is based on the actual (combined) weight of your pet in their crate.
3. What happens when my pet arrives in the country they are traveling to?
As soon as the flight arrives, your pet will be taken from the plane straight to the airport terminal.
If your pet is traveling as excess luggage, they will taken to the oversized luggage area in the arrival hall. Once you clear passport control, you will be able to collect them at the same time as your normal luggage. As you exit the airport via the ‘something to declare’ customs channel you will be asked to present your pets travel paperwork to the customs official and / or the vet on duty.
If your pet is traveling as manifest cargo, they will be taken to the Animal Reception Centre. There, their documentation will be reviewed by the staff of the ARC to ensure all is in order. At the same time, relevant customs formalities will be completed by staff based at the arriving airport.
4. How long does the travel paperwork and other travel preparations take?
This depends entirely on the location that your pet is traveling to. Your pet relocation compnay will provide you with an accurate timeline of how long the relevant preparations will take and at what point in the process the various steps must be taken.
In some cases they can get your pet ‘travel ready’ in a few days. In others it can be up to six months or more.
5. What vaccinations does my pet need to travel?
Regardless of where your pet is traveling, they will need certain vaccinations. The exact vaccinations they need are entirely dependent on the location they are traveling to. The one vaccination that is mandatory for every country your pet may travel to is a rabies vaccination.
Other vaccinations may also be necessary. These will be advised to you as relevant. In every situation, it is essential to keep your vaccinations current and to not miss a due date, even by one day. To do so could severely hinder your pets travel plans.
Source: Pawsome Pets UAE
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
COMPANY%20PROFILE
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UAE currency: the story behind the money in your pockets
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
Five personal finance podcasts from The National
To help you get started, tune into these Pocketful of Dirham episodes
·
Balance is essential to happiness, health and wealth
·
What is a portfolio stress test?
·
What are NFTs and why are auction houses interested?
·
How gamers are getting rich by earning cryptocurrencies
·
Should you buy or rent a home in the UAE?
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SPEC%20SHEET
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Company%20Profile
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Zayed Sustainability Prize
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Empires%20of%20the%20Steppes%3A%20A%20History%20of%20the%20Nomadic%20Tribes%20Who%20Shaped%20Civilization
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