Importance of Salary Certificate for Getting Personal Loan
Personal loans in UAE are one of the most popular forms of credit for both expatriates as well as UAE nationals. These are simple unsecured loans that are disbursed quickly without any hassle and a lot of documentation. A large number of expats opt for personal loans in Dubai and UAE to manage their expenses initially while they move into the Emirates.
While an applicant applies for a personal loan in UAE there are certain important documents and papers that need to be submitted to the lender for the approval of the loan. One of those documents is the salary slip. There are various reasons why banks and financial institutions require salary slip while approving and processing personal loan applications in the UAE.
If you are looking forward to opting for a personal loan in the UAE, this quick read will help you to get a clear and firm understanding of the importance and value of salary certificate while applying for personal loan in UAE. However, before we move ahead and dive deep into the nuances of personal loans and their interconnection with salary slip let us first understand what are salary slips?
What is a Salary Certificate?
A salary certificate also known as salary slip is an essential document that acts as proof of employment and your salary. Salary certificates are usually issued by the organization/employer on a monthly basis or in special cases on a request. A salary slip consists of various details about your designation, division, and various details centered around your employment with the organization.
Salary certificates are usually printed on the official letterhead of the organization as a proof of employment along with the signature of the undersigned and a rubber seal of the company. There are numerous uses of a salary certificate and hence it is considered as an important document.
Importance of Salary Certificate
As mentioned earlier a salary certificate is a documented proof provided by your employer verifying the terms of employment and the remuneration received. When an individual applies for any form of credit the financial institution analyzes the ability of repayment based on the earning of the applicant.
In order to assess your repayment ability, the bank/financial institution needs to look at documented proofs that typically include bank statements and salary certificates. Banks and financial institutions look up to bank statements to analyze your savings and salary certificates to verify your earnings.
After observing and analyzing these important documents the financial institutions/banks get a clear idea about the repayment ability of the applicant in case one opts for a personal loan in Dubai or UAE. A salary certificate works as an important verification document that verifies the designation and earnings of the applicant in the organization. Looking at your earnings and savings banks assess and determine your solvency.
Need for Salary Certificate in Getting Personal Loan in UAE
The majority of financial institutions and banks that offer personal loans require a salary certificate as a mandatory document. Based on the form and type of credit the required documents and eligibility criteria might change. However, mainly banks require the following documents while applying for a personal loan in UAE-
- A valid Passport (mainly for expatriates)
- Visa (for expats)
- Emirati Identification proof (for both expats and UAE nationals)
- Salary certificate/ Payslip
- Recent Bank statements from past last three months
As mentioned earlier banks or financial institutions will not process your loan or credit card application unless they are provided with a valid certificate to verify the employment status and earning status. The submission is mandatory from the applicant’s end for the bank to verify the income and thereby able to repayment of your loan amount.
Very often a lot of people get confused between salary certificates that are also known as salary slips and payslip. A payslip may be defined as a confirmation from the employer to the employees that the salaries have been paid. The payslip encompasses a detailed break-up of the earnings that are paid by the employer after all the deductions.
Banks and financial institutions usually do not accept payslips and therefore require complete salary slips on the official letterheads of the company verifying the employment. A payslip is more of an expense break-up from the employees instead of a documented proof of employment or payments.
In a Nutshell
If you are applying for a personal loan in UAE, it is vital to submit a salary certificate for approval and processing of the loan. The majority of banks have their format of salary certificate however the information required is usually the same and might vary based on the type of credit and financial institution.
To ensure that your personal loan in UAE application is approved and processed the applicant must submit the salary certificate in the same format as required by the bank.
About the Author
Pardeep Garg is online entrepreneur, and author. He is passionate about Market Research and loves to write on topics Market Research, Business, Health, Personal Finance, Information and Opinions to success in life.
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