Sharjah Islamic Bank Personal Loan Interest Rates

Sharjah Islamic Bank is a renowned Islamic bank in the UAE offering a wide range of financial services. This includes personal finance or loans, which are designed to meet the specific needs of customers who want a convenient and cost-effective way to finance their personal and business expenses. 

With a Sharjah Islamic Bank personal loan, you can enjoy a number of advantages such as competitive interest rates, flexible repayment terms, and a hassle-free application process. However, before you initiate the application process, you must be aware of a few key terms like the profit rates.

In this article, we will cover the Sharjah Islamic Bank personal loan interest rates in detail. 

Sharjah Islamic Bank Personal Loan Interest Rate - An Overview

With Sharjah Islamic Bank personal loans, you can easily get the required funds for your personal requirements at low profit rates. Given below is an illustration that explains the entire calculation of the personal loan as per the interest rates -

1. Illustration 1

Let’s assume the finance amount of the personal loan is AED 100,000, the loan tenure is 48 months, and the flat profit rate is 2.98% (reducing rate of 5.33%). In this case, the instalments would be -  

• Total amount: AED 111,496 
• Profit amount: AED 11,496
• Administrative fee: AED 1,000
• Monthly instalment: AED 2,323
• Takaful fee: AED 629 

2. Illustration 2

If you, as a borrower, want an early settlement in the future for the outstanding amount, you will be required to pay an early settlement fee of 1% on the total remaining principal amount of the finance (up to a maximum of AED 10,000) as per UAE Central Bank guidelines.

For instance -

Suppose the total outstanding of the Finance Liability is AED 100,200. In this case, you will need to pay AED 91,000 to settle the finance, and that amount comprises the following, provided the amount of Deferred profits (AED 10,000) will be dropped -  

• The outstanding principal amount (AED 90,000)
• Early settlement fee of 1% of the outstanding principal amount (AED 900)
• The amount of accrued profits (AED 200) till the settlement date 

Features of Sharjah Islamic Bank Personal Loan

Discussed below are the key features of SIB personal loans in the UAE -

• You can opt for personal finance for multiple purposes, whether you want to pay for rent, travel expenses, school fees, personal investment, home furnishing, and more. 
• Get a high finance amount at lower profit rates. 
• The bank offers a finance amount of up to AED 2,500,000. 
• Get flexible payment options as you pay off your 1st instalment after a grace period of 150 days. 
• The repayment tenure for the SIB personal loan is up to 48 months. 
• Get fast approvals for loan applications 

Factors Affecting Sharjah Islamic Bank Personal Loan Interest Rate

The interest rates for personal loans generally vary as per the applicant. The same applies here, with certain aspects influencing the interest rates of SIB personal loans in the UAE -

1. Your Income

Income is one of the main factors that lenders use to determine the interest rate of a personal loan. Generally, borrowers with higher incomes are offered lower interest rates as they are seen as having a lower risk in terms of paying off the loan amount on time. On the other hand, borrowers with low incomes are likely to be offered higher interest rates as their risk of defaulting on loans is seen to be on the higher side by the bank. 

2. Loan Tenure

The loan tenure is another major aspect in determining the interest rate on a personal loan. Generally, the longer the loan tenure, the higher the interest rate. This is because the lender assumes a higher risk of loan repayment over a longer period. 

A shorter loan tenure, on the other hand, generally means a higher interest rate as the risk is lower. At the same time, keep in mind to check the instalment amount as well. With a shorter tenure, although the total interest would be lower, the instalment amount may be higher. 

3. Credit Score

A credit score is a number calculated from your credit history that financial institutions use to determine the risk of lending them money. The higher the credit score, the lower the interest rate on a personal loan, as it indicates that you have a history of paying off loans and debts on time. On the other hand, borrowers with higher credit scores are considered to be lower risk and more likely to be charged higher interest rates.   

4. Debt-to-Income Ratio

Lenders use this ratio to evaluate your debt burden and ability to manage additional debt. If your debt-to-income ratio is high, it indicates that you have a large debt burden relative to your income, making you a riskier borrower. This results in a higher interest rate being charged on a loan. Conversely, a low debt-to-income ratio presents you as a low-risk borrower, which can result in a lower interest rate on a loan. 

5. Relationship with the Bank

Reliable existing customers of SIB are likely to get lower personal loan interest rates compared to any new customers. This is because banks view these customers as having a lower risk of defaulting on the loan. Furthermore, customers with a strong relationship with a bank usually receive better repayment terms, higher loan limits, and fewer fees. 

Sharjah Islamic Bank Personal Loan: Fees and Charges

Refer to the following table to learn about the fees and charges related to Sharjah Islamic Bank personal loan -