MANAMA: More than a quarter of respondents polled by compareit4me.com, a UAE-based finance comparison website, have admitted to missing a payment or making a late payment on their existing loans.
The online survey, conducted between July and August 2014, found that 5.8% of the respondents have often defaulted on their loans, while 19.3% have missed or made a late payment once or twice in the last 12 months.
“The results of this year’s financial survey are quite concerning as more than one in four of those polled also described their monthly debt repayments as ‘stressful’,” Jon Richards, CEO of compareit4me.com, said.
Around 77% of respondents confirmed that they have some form of debt with UAE banks, with credit cards (54.7%) topping the list, followed by personal loans (43.6%), car loans (12.6%) and mortgages (4.1%).
The survey reflects the steady uptrend in consumer lending as UAE banks continue their recovery from the 2008 recession. Incidentally, credit ratings agency Standard & Poor’s even forecast a 10% to 12% nominal growth in UAE personal credit in 2014 and 2015.
“Consumers need to be proactive when it comes to managing debt if financial obligations become a struggle,” Richards said. “Consumers need to act fast to find more manageable options.”
“Refinancing debts should be the first thing people look into: as the banks compete with each other, rates inevitably come down leading to cheaper credit. If you have a loan which is over 12 months old, it is likely you will be able to get a better rate today, so make sure you look into it. Consumers also need to look at consolidating debts wherever possible, such as credit cards for example which have a much higher interest rate than a personal loan. This alone could save you thousands, particularly if you only make the minimum payment each month,” he said.