Credit Card and Loan Settlement Claimed

Debt Settlement

Debt settlement is a prime initiative after a detailed analysis of your entire financial deficit. The extensive network and top-class communication skills of our experts can assist our clients in saving a huge amount of money. It’s indeed very much critical for an individual to make sure that how much he can save and how long it would take to settle debt and become totally debt-free. It is our primary responsibility to communicate or negotiate on behalf of a client with his creditors and offer the numerous debt settlements in one of the following ways which look appropriate to him:

Credit cards

DDR experts bargain on his client’s behalf with the creditor to settle his credit cards, Loans, Mortgage depending on the suitability of the client:

• The complete and final settlement
• Installments on 0%
• Installments up to 4 years with a minimized interest rate
• Elimination of late dues and over-the-limit charges

Personal Loan

Moreover, we also deal in the settlement of personal debt in one of the below manners, as per the compatibility of the client:

• The complete and final settlement
• Installments on 0% markup
• Discarding the late dues and over-the-limit charges

Dubai Debt recovery team also assists those individuals who left UAE without clearing their outstanding dues or debts. There is the possibility of getting better job opportunities in the UAE but they might neglect it due to fear of facing legal issues. Our experts can also negotiate on their behalf with the creditor so that they can settle their debt problems and start a new life back in UAE again

What is Debt?

The outstanding or pending amount that is owned by someone.

Meaning of debt In the Banking sector

A debt arrangement provides the permission to have a loan under the condition that it is to be paid back at a later date, generally with interest to the lender.

Debt Consolidation as a Personal Loan

Personal loans are generally received to meet certain expenses. Some debtors might use it to meet the medical expenses, on other hand, some might use it to meet miscellaneous expenses like buying a car or shifting into a new home. One of the best use of a personal loan is the ability to consolidate debts.

Defining debt consolidation?

The process of debt consolidation is defined as receiving of a new loan to pay back the other liabilities and consumer debts, generally unsecured ones. Various debts are collected into a single, larger debt, usually with more suitable payoff terms. A compatible payment term contains a minimized interest rate, reduced monthly installments, or both. Clients can opt for debt consolidation as a means to clear their outstanding student debt, credit card debt, and other liabilities.

How to consolidate debt?

There are numerous ways you can sum u your loan or debts together by consolidating them into a single payment. Below we have addressed the most common terms:

• Personal loans are utilized to merge credit card debt are a procedure of making various outstanding payments (debts) into a single monthly payment. Such types of loans are available through banks, credit unions and various online lenders. It is a chance to convert revolving debt into a fixed monthly payment at minimized interest rates.

• Credit cards, by using this method you have the ability to consolidate all your credit card payments into a new credit card. This new card might turn out to be the best idea if it charges little or is free from interest for a set period of time. You can also use the current credit card’s balance transfer feature—particularly if it offers a special promotion on the transaction.
• Home equity loans (HELOCs) are also a type of consolidation. Generally, the interest for this type of loan is deductible for taxpayers who record their transactions.

Role of personal loan in debt consolidation

Just in case if you have pending dues on various credit cards that are deducting a very high rate of interest, moreover an existing high-interest personal loan. In such a situation, it will definitely prove fruitful to consolidate all the debt into one personal loan. In order to pursue in this regard, try to acquire a fresh personal loan from a bank that offers a lower interest rate. The logic behind this loan is to repay the credit card dues/other outstanding debts where you are facing a high-interest cost. Moreover, ensure that the new loan has beneficial features like flexible repayment tenure, zero-prepayment charges, and zero foreclosure charges. This will make the process much easier for you.

Benefits related to debt consolidation with a personal loan

There are numerous advantages of using a personal loan to consolidate debt, like:

·         reduction in your interest rate:

Personal loans usually offer lower rates than other types of debt. If you can acquire a low-interest personal loan and minimize your interest rate, you’ll definitely save money on loan repayment.

·         Fix rate Consolidation Loan:

Generally, when you borrow money, your interest rate is changeable. It presents that it is associated with a financial index, like the prime rate. If the index rate gets boosted, your rate usually goes up too. If you are fading up of acquiring a loan at variable rates, you could opt for a fixed-rate consolidation loan so that you can assess exactly what your monthly payment will be each.

·         Fixed repayment timeline:

When you acquire a personal loan, you show an agreement to return or repay that loan on an already set schedule mentioned in your loan agreement. By doing so you’ll know exactly when you’ll become debt-free if you continue paying on time. Make sure aware that if you want to clear your loan earlier, your lender might ask for a prepayment penalty.

·         Boosting your credit:

Your credit scores are dependent on various factors, each with a different impact. Like, if you failed to pay your credit cards in due time, that might negatively affect your payment history, which is a significant factor. If you utilize your card up to a maximum limit, that might as well hurt your credit utilization rate. A lower utilization rate might assist in your credit scores. Thus, consolidating your outstanding loan with a personal loan will boost your credit scores if it leads to a lower credit utilization rate and more on-time payments.

Adverse effects of debt consolidation using a personal loan

There are some impending disadvantages to consider before opting for using a personal loan to consolidate your debt. Here are some of them:

·         You might face a higher interest rate

There is indeed no guarantee that a personal loan will certainly have a lower interest rate than all the debt you pay off. If you consolidate any debt with a less interest rate, you’ll raise the costs of reimbursement it. Try to use a debt repayment calculator to compare any potential savings.

·         Ending up paying more interest

Despite the fact that if you have acquired the loan at a low-interest rate, there’s still a chance that your personal loan could cost you more if your selected period for repayment is a bit lengthy. If you opt for a personal loan with a five-year repayment plan. You’d otherwise have returned the debt in two years, you’ll pay interest for the next three years. It means that simply you will pay more interest with every passing time, depending on your loan’s interest rate.

·         Fee or charges that you might face

On some occasions, you are supposed to pay to acquire a personal loan. Depending upon your creditor, you could face loan application fees, initial fees, or prepayment penalties even if you pay off your loan early, there is still a problem. Such fee structure sometimes makes consolidation more costly than just continuing to pay back your current creditor.

·         Getting stuck in more debt:

When you clear the credit cards by using a personal loan, you free up your line of credit. Just in case if you utilize these cards again and fail to pay off the balance, you might end up owing your original creditors again. In such a situation, you would have to pay off your consolidation loan, as well as a bunch of new debt, leaving you in horrible condition.

There are numerous banks and financial institutions in UAE that provide personal loans for debt consolidation. These lenders charge a justified reasonable rate of interest and offer flexible repayment plans that can make it easy for you to return the borrowed sum. Make sure that you check your personal loan eligibility check and credit score before accessing a lender for a personal loan.

Debt Consolidation loan offers in UAE

1.     FAB Debt Consolidation Loan (UAE Nationals Only)

You can consolidate all your pending loans into one single loan with FAB

Advantages

• Flexible repayment plan of up to 144 months
• Variable and reasonable interest rates
• Particularly for UAE nationals who are facing a debt burden of more than 50% of their monthly salary

Document Required

• Presenting your Liability letter of all outstanding loans & Cards
• Salary transfer letter
• Bank statement (six months)
• Copy of a valid passport/Emirates ID (originals must also be presented)

2.     Mashreq Bank Debt consolidation loans

(For Emiratis only– lengthy tenure Debt Consolidation)

Advantages

• Minimum monthly payments
• Enhanced disposable income
• Minimized interest payments over the lifecycle
• Loan amount up to AED 5 Million
• Long-term Loan tenure and Debt consolidation tenure up to 48 months (for Armed Forces employees up to 60 months)
• The deferred payment period of up to 120 days

Documentation required

Valid Passport Copy/ Valid Emirates ID
Salary Transfer Letter from employer or Salary certificate
3 months Bank statement with salary credits / UAEFTS customer’s consent for bank statement

Abu Dhabi Islamic Bank Debt Settlement Finance

Advantages

• Least Interest rate initially from 3.44%
• Extra 90 days for the 1st installment
• postponement allowed of up to 2 installments/year
• Finance up to 3 Million AED
• Job loss protection
• Bank provide Visa Cashback Credit Card as complimentary

SCB Debt Consolidation for Expats 

• • Residents of UAE working in companies approved by Standard Chartered have a Minimum Salary: AED 30, 000 per month. The Minimum Age limit is almost 21 years. The maximum age Limit is or company retirement age at loan maturity whichever is lower. Proof of Retirement age in the company is required for any case where age exceeds 60 years at the time of loan maturity.

Documents Required

• Passport, UAE Residency Visa and valid Emirates ID (original)
• Salary Transfer Letter (in Standard Chartered Bank format) along with Salary Certificate
• Bank Statement of past 3-months
• Liability Letter

All you need to know about DEBT CONSOLIDATION LOAN IN UAE?

Debt consolidation is considered as best option to repay multiple loans or credit cards in UAE. There are various banks in the UAE offering the services of a ‘debt consolidation loan’. According to the latest surveys, it is observed that out of 5, three residents of UAE have pending debts of various types and therefore can opt for the Debt consolidation services.

Example to understand Debt Consolidation

If a person has pending liabilities like:

• Two credit cards Aed 25,000 and 20,000/-
• Separate personal loan for Aed 150,000/-.

Usually, different interest percentages are inapplicable on each outstanding liability, and fixed installment payments will apply for each. When you go to banks to consolidate the loan, the bank considers this as one outstanding liability and offers you a revised lower interest and installment-based loan at minimized interest rates.

HIDDEN COSTS:

Most people end up being stuck deep in never-ending debts because they overlook the hidden charges of interest rates on outstanding debt. According to market standards, the average interest rate applicable on a credit card is 2.9 percent/month. On other hand, if you compare the same to an annual percentage rate (APR) it touches as high as 40 percent. The annual percentage rate will only be applicable only if the regular monthly credit payments are not cleared and when you carry credit card balances from month to month. Generally [people ignore and will have to bear the hidden costs as well.

Going for a debt consolidation loan, you can neglect annual interest rates applicable to your credit card liability and instead acquire a revised monthly installment plan that permits you to clear your pending due amount in a structured manner creating a balance between your earnings and your liabilities.

Advantages of DEBT CONSOLIDATION:

• It gives you better control of your finances by consolidating all your pending liabilities into one loan. It also assists you to waive off paying high-interest rates on all your liabilities by offering you a consolidated low-interest rate.
• Easy repayment plan
• Better financial impact
• It also permits to create of savings on the interest payments that would have been otherwise applicable
• Allows you more disposable income and helps in making finances better.

INSOLVENCY LAW IN THE UAE

The United Arab Emirates introduced insolvency law no.19 of 2019. The Insolvency law comes with idea of “voluntary settlement process”. The process has been started to allow individuals facing financial deficits to be able to find a structured payment plan by utilizing a court led procedure. This process provides you the permission to voluntarily apply for insolvency and thereby utilize their legitimate options to shelter their assets and to reach a reasonable structured installment plan with their creditors.

An individual can access civil courts under insolvency law to file for personal insolvency. Using mediation process initiated by the Court which participation of relevant experts who are authorized by the Court through a step-by-step process to develop a reasonable structured installment plan.

VOLUNTARY SETTLEMENT PROCESS:

The insolvency law provides permission for a voluntary settlement process at the instance of the debtor. Once a voluntary settlement plan is started, the debtor’s debts are not due and payable immediately but only on the basis of a reasonable well-structured settlement plan. The creditors are also permitted to actively participate in the settlement process. This law also defends individuals from filing for enforcement or liquidation against the assets of the person in debt. Thus, it provides security to the assets of the debtor while at the same time creating a better environment for a smoother settlement plan.

It is necessary to mention that the Civil courts will not allow settlement application from a debtor if the following factors are observed, which are:

• The debtor has hidden his assets
• The debtor has tried to dissolve any of his assets
• If a false statement has been submitted by the debtor related to his assets or liabilities
• The debtor has not settled a due debt for a longer period of time that has exceeded fifty consecutive business days.

Following are the banks where we have been working for our clients.

1. Abu Dhabi Commercial Bank
2. Ajman Bank
3. Al Ahli Bank of Kuwait
4. Al Hilal Bank
5. Al Khaliji S. A.
6. Al Masraf
7. Arab African International Bank
8. Arab Bank PLC
9. Bank Meli Iran
10. Bank of Sharjah PSC
11. Bank Saderat Iran
12. Banque Misr
13. Barclays Bank PLC
14. Blom Bank
15. BNP Paribas
16. CitiBank N.A.
17. Commercial Bank International
18. Commercial Bank of Dubai
19. Doha Bank
20. Dubai Bank
21. Dubai Islamic Bank PJSC
22. El Nilein Bank
23. Emirates NBD Bank
24. First Gulf Bank
25. Habib Bank Ltd.
26. HSBC Bank Middle East Limited
27. InvestBank PLC
28. Lloyds TSB Bank PLC
29. Mashreq Bank PSC
30. National Bank of Abu Dhabi
31. National Bank of Bahrain
32. National Bank of Fujairah PSC
33. National Bank of Kuwait.
34. National Bank of Oman
35. National Bank of U.A.Q PSC
36. Noor Islamic Bank
37. Rafidain Bank
38. Samba Financial Group
39. Sharjah Islamic Bank
40. Standard Chartered Bank
41. The National Bank of R.A.K or RAKBANK
42. The Royal Bank of Scotland N.V.
43. Union National Bank
44. United Arab Bank PJSC
45. United Bank Ltd.

Credit card settlement is a process by which a debtor and creditor come to an agreement on a reduced payment to settle a credit card debt. The procedure for credit card settlement typically involves negotiating with the credit card company to agree on a lump sum payment that is lower than the total amount owed. The debtor may choose to negotiate directly with the creditor or work with a debt settlement company that specializes in negotiating settlements on behalf of their clients.

When the debtor and creditor come to an agreement on the settlement amount, the debtor is required to make a payment to the creditor, typically within a specified timeframe. Once the payment is received, the credit card company will consider the debt settled and may update the debtor’s credit report accordingly.

Credit card settlement can be an effective way for debtors to resolve outstanding credit card debts and avoid the negative consequences of defaulting on payments. However, it is important for debtors to carefully consider the potential impact of settling a debt on their credit score and financial future. Working with a reputable debt settlement company or seeking the advice of a financial advisor can help debtors make informed decisions about credit card settlement and debt management.