Legal Steps of Debt Consolidation in the UAE
Majority of the UAE comprises an expatriate population. They have migrated to the UAE mainly for job opportunities. The main problem most of the expatriates face today is the debt accumulation via different sources. Inconsistency in debt repayments affects the credit score and entitles the financial situation to sue the debtor. When the situation of paying the debt comes, the debt consolidation comes into action.
By the debt consolidation, escape of the debt trap is functioned by merging multiple debts into one. So, it can be easily paid through loans or some kind of management program. Debt relief strategies combine the debts into one payment per month through which money can be saved. The categories of debt consolidation include:
- Loan option for debt settlement
- Management program option for debt settlement
Debt Consolidation Loan
The suitable method of debt consolidation is to apply for a loan either from a lender or financial institution. The loan amount should be the total amount. So the debt is closed by one time. Then the loan is broken to pay EMI which can be paid by the debtor. The interest rate is negotiated based on the current financial situation of the debtor. The repayment time may vary between 3 to 5 years.
These loans are a special type of personal loans in the UAE. This helps in a huge way who are in need for financial help struck in debt and are paid as an installment every month. This reduces a lot of tension and stress. Creditors analyze credit reports to agree on the rate of interest on the loan amount.
Eligibility criteria to apply for debt consolidation loan need some documents such as:
- Emirate ID
- Bank statement (of past 3 months)
- Salary transfer certificate
Debt Consolidation Management Program
Other than the debt consolidation loans there are other ways through which one can settle their debts. The most worked out way is through debt management programs. The programs are offered by various management agencies. They work in accordance with credit card providers and financial institutions that reduce the debtor’s rate of interest. This lowers the financial burden of the debtor to a great extent.
Debt Consolidation Benefits
Debt consolidation marks an effective way for the people fighting with financial obligations with less struggle. As it makes the path of settlement smoother, it lays a lot of benefits for the people who opt this. Some of the benefits are:
- Helps in maintaining credit score
- Finds easier even after payment deadlines
- Reduce stress
- Less amount spent per month
- Comparatively rate of interest is low
Debt collection refers to the process of collecting debt by the financial institution. Many people may have opted for debts in their day to day life. They might be like credit cards, loans or from some other sources. Within the given frame the debtor should pay the amount along with the applicable rate of interest. Debt collection agencies choose numerous ways to collect the outstanding debt. If failed, the creditor sends notice succeeded by some legal actions.
Debt consolidation is not as complex as it appears. It provides peace of mind and leads to a stress-free tomorrow. For further knowledge related to the legal faces of debt consolidation in the UAE, you can get free legal consultation in Dubai and can find lawyer UAE through our best service. You can also get online legal advice Dubai by opting us through https://iadvise.live.
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