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Finance for Your Unplanned Expenses

Personal Loans: Finance for Your Unplanned Expenses

23.09.2019

Life is unpredictable. There are times when you will find yourself in situations you never thought you will be in. Some of these unplanned situations can also impact you financially, increasing your expenses and digging into your savings. This could happen in any sphere: your child’s education, your health, or even home-related expenses.

In these situations, your first instinct might be to ask someone for help, like your friends and family. Although those aren’t bad short-term solutions, they won’t give you the full support you need in life’s ups and downs. That’s where personal loans come in to play.

Why should you get a personal loan?

In its simplest definition, a personal loan is money that you borrow from a bank to cover your current expenses. This money must be paid back to the bank in equal installments over a period of time, which can be in months or years. This borrowed money can help you solve your current financial difficulty without blowing up all your savings or troubling friends and family.

Like with any type of financial product, personal loans come in many shapes.

What are the different types of personal loans?

There are 3 types of personal loans that are popular here in Kuwait. Each one has been specifically designed to cater to various financial needs and situations.

  • Consumer Loan: This is arguably the most useful and popular loan. A consumer loan covers a wide range of necessities, from your children’s school fees to your groceries. It can also be utilized to make various electronic purchases too. You can take consumer loans of up to KD 25,000 over a period of 5 years.
  • Housing Loan: We all have a dream house in our minds. But unfortunately, we usually don’t have the immediate money that is required. With a house loan, you can borrow from the bank to purchase your dream house. It can also be used to renovate or repair an existing property. In Kuwait, housing loans up to KD 70,000 over a period of 15 years are available.
  • Expat Loan: These go beyond the regular personal loans. Expat loans are specifically for those who are relocating to Kuwait for employment purposes, etc. These are mainly used to cover accommodation and travel expenses when someone is moving into the country. The maximum loan available is 150% of your accumulated indemnity.

What is the interest rate for personal loans in Kuwait?

That’s quite simple to answer: All personal loans incur an interest rate of 6% per annum in Kuwait.

Now that you know the different types of personal loans, let’s look at what you need to apply for one.

What documents do you require for a consumer loan?

  1. A copy of your Civil ID
  2. A Kuwait Military ID is required for MOI, MOD and National Guards
  3. Your salary certificate  
  4. A salary transfer continuation certificate

What documents do you require for a housing and expat loan?

  1. A copy of your Civil ID
  2. Your salary certificate
  3. A salary transfer continuation certificate
  4. A copy of your passport (for expats)

Once you have provided the required documents, you will be eligible to obtain the required personal loan. You just need to choose the right kind of personal loan for your situation, and discuss the details with your bank’s representative.