Should you consolidate all your debts in UAE?

Dubai: About half of expatriates in the UAE have personal loans to settle, while nearly four in ten (38 per cent) have credit card borrowings to pay off.

Household debt, indeed, remains a perennial problem in the UAE, and what is worrying is that it can push people to the brink of frustration. To provide a relief to debt-laden consumers, banks are offering borrowers a chance to opt for a “debt consolidation loan.”

Consolidation loans allow those who have racked up multiple debts, especially the ones who are neck-deep in credit card dues, to lump all their borrowings into a single loan with lower annual interest rates and manageable monthly instalments.

But while this type of loan may sound like a quick solution to those who are behind on their payments, UAE residents are strongly advised to exercise caution.

According to financial analysts, a borrower could end up spending more on loan repayments and buried deeper in debt if they are not mindful of their monthly dues and day-to-day expenses.