Shopping for Personal Loans in Kuwait: The Ultimate Guide

November 12, 2020

When life throws unexpected events our way, we can be suddenly plunged into an urgent need to start shopping for personal loans in Kuwait. Yet, the reality is that few of us are ever well prepared for when the need for personal loans may arise. Furthermore, getting access to the best personal loans in Kuwait can be as daunting as it is urgent. How to find the right personal loan with the best rates and terms is a search specific to each individual, which makes matters more complex. Common personal loans can include cases as varied as: Purchasing furniture for a new home Funding an education degree Paying for a medical emergency Though your need for urgent fundings or cash is obvious, you may have no clue how to access the best personal loans in Kuwait. Inevitably, the current financial system presents these challenges: It is difficult to compare different bank offers Finding the right type of personal loan isn’t obvious Accessing personal loan information isn’t transparent The whole system is confusing, slow and frustrating. That’s why we’ve put together this instructive guide to teach you all you need to know about accessing the best personal loans in Kuwait. The Ultimate Guide: Shopping for Personal Loans in Kuwait Learn 6 common types of personal loans Identify different personal loan structures (secured vs. unsecured, etc.) Research Kuwaiti bank prerequisites Compare the best personal loans in Kuwait [Are you looking for an urgent personal loan in Kuwait? FinFirst offers a bank product comparison super app that allows users to submit multiple personal loan applications to the best banks in Kuwait within less than 10 minutes. Easily choose the bank that offers you the best deal, upload documentation then receive a reply faster than ever before.] So, let’s start your road to getting fast funding. Shopping for Personal Loans in Kuwait. First, learn 6 common types of personal loans Perhaps you are new to Kuwait’s financial system and you have been wondering what types of personal loans you can access here. Can I get a mortgage? Can I get a car loan? Can I get a school loan? How is Kuwait’s loan industry different from my home country? Here, we have outlined the 6 most common personal loans in Kuwait that you can apply for. Personal Line of Credit A personal line of credit provides you with a maximum amount of finance (borrowing limit) that you can access at any time. You can borrow up to that limit, repay it, and borrow it again. This type of loan is an excellent way to ensure access to a backup emergency fund. With a personal line of credit, you can quickly resolve unforeseen expenditures that may arise. Furniture Financing Here, a bank or another lending organization lends you money to purchase furniture or other household appliances. Furniture financing is particularly useful for you if you are an expat just settling down in Kuwait. Student Financing / Student Loans Student loans are money you borrow from a bank or another financial organization to finance your educational expenses, including school fees, accommodation, textbooks, etc. Higher education can help you improve your skills, get a better job, or secure promotion in your current job. But quality education doesn’t come cheap. These days, education has become synonymous with a personal investment in the future (increased earnings capacity) that is worth the price. Banks in Kuwait can provide you with student loans that will help you (or your children) achieve these educational goals. Healthcare Financing Health is wealth, so it’s no wonder healthcare costs are on the rise. However, trips to the emergency room are never planned. This makes healthcare emergencies a top reason for the need to seek out personal loans. In times of medical emergencies, healthcare financing can be a lifesaver, which is why it’s important to understand these types of loans even if no current medical problem exists. Mortgage Financing / Housing Loan Mortgage financing helps you borrow the money you need to purchase a home. Acquiring a great mortgage is important because owning your house rather than renting has some clear financial advantages. For example, you can design and redesign the home as you like, investing into an asset that contributes to your net worth instead of your landlords. In Kuwait, you’ll find that banks provide many different types of mortgage financing with varying periods of repayment and interest rates. Auto Financing / Car Loan The purchase of cars is increasing in Kuwait, and a higher percentage of those purchases are conducted through auto financing or car loan. Many banks in Kuwait provide auto financing or car loan deals for locals as well as expats. The bank will charge interest on car loans, and the principal and interest are repayable over an agreed period. The interest rate will depend on the loan term (how long it will take to repay), downpayment (whether you pay down a portion of the cost of the car in cash), income and debt (the ratio of your debt to income), and the age of the vehicle. [Want to learn how to get the best car loans? Read this article on how to get good interest rates on car loans.] Identify different personal loan structures Before we consider how you can access these types of personal loans, we’ll need to look at the different loan structures and what they mean for you. Secured Personal Loans A secured personal loan is a loan that is backed by collateral. The bank gives a loan offer based on the value of an asset that you submit to them. The collateral can be a car, a house, a savings/investment account, among other assets. Secured personal loans have lower interest rates compared to unsecured personal loans since the bank is taking a lesser risk, given that they can sell your asset in the case of a loan default. Also, since secured loans have collateral, there are less conditions and requirements. Ask any financial advisor, and they’ll tell you that getting a secured loan is always the best option if you have the ability to do so. Unsecured Personal Loans A personal loan is unsecured if there is no collateral backing it up. In such cases, the bank cannot sell the customer’s assets to offset part or all of the default. Since banks take a higher risk with unsecured loans, the interest rate is higher. Also, banks will have more conditions and requirements before qualifying a customer for an unsecured loan. Auto financing, student financing, healthcare financing, mortgage financing and personal lines of credit can be secured or unsecured. It depends on what the bank offers and what you want. Debt Consolidation Loans Debt consolidation is the process of paying off many debts by replacing it with a new, single debt. For example, if you have outstanding balances on many credit cards, you can consolidate those debts into one single credit card (or other credit facilities). You will become indebted to a single lender who pays off your multiple debts. Cosigned Personal Loans A cosigned personal loan is a loan where more than one person guarantees repayment. If you apply for a loan but can’t meet some of the conditions, you can use someone who meets those conditions as a guarantor. In essence, your cosigner is someone who has the assets or credit to match your loan conditions. The guarantor agrees to become indebted to the bank if you fail to pay off your loan. The consigner is generally someone with good credit or valuable assets. Cosigned loans are available for secured and unsecured personal loans. Research bank prerequisites in Kuwait Now let’s look at some of the conditions and requirements for accessing personal loans in Kuwait. Student, Healthcare, and Furniture Financing (PersonalLoans) Most banks in Kuwait group education, healthcare, and furniture financing together under personal loans. It is important to do your research when it comes time to seeking out which bank deal will offer the personal loan that is right for you. Below, we have gathered some requirements, but is advisable for you to continue with your own research: Maximum Loan Offer: Burgan Bank, National Bank of Kuwait, Kuwait Finance House, and Gulf Bank offer a maximum of KD 25,000 for personal loans. Commercial Bank of Kuwait’s limit is KD 15,000. Minimum Salary: National Bank of Kuwait requires a minimum salary of KD 400. For medical loans, the Commercial Bank of Kuwait requires a minimum salary of KD 400 for the bank’s customers, KD 600 for non-CBK customers, and KD 800 for non-Kuwaitis. Age: National Bank of Kuwait limits personal loans to individuals below age 70. Commercial Bank of Kuwait limits medical loans to age 69 for Kuwaitis and 59 for non-Kuwaitis. Loan Term: All banks offer a loan term ranging from 12 months to 60 months. Repayment: Burgan Bank requires that the monthly repayment for personal loans must not exceed 40% of the regular income or net salary of an applicant (30% for retirees). Housing Loans Below are some of the essential requirements for housing loans or mortgage financing: Repayment: For the Commercial Bank of Kuwait, Gulf Bank, and Burgan Bank, the monthly repayment of housing loans must not exceed 40% of your regular income or net salary (30% for pensioners). The National Bank of Kuwait does not have such a requirement. Minimum Salary: National Bank of Kuwait requires a minimum salary of KD 400, while the Commercial Bank of Kuwait requires a minimum salary of KD 300 for Kuwaitis. Minimum Loan Offer: Only Commercial Bank of Kuwait has a minimum loan offer of KD 10,000. Maximum Loan Offer: Commercial Bank of Kuwait, National Bank of Kuwait, and Burgan Bank limits loan offers to KD 70,000. Loan Term: Gulf Bank offers a loan term of up to 15 years for Kuwaitis and 10 years for expats. Commercial Bank of Kuwait, National Bank of Kuwait, and Burgan bank offer loan terms of up to 180 months (15 years). Age Requirements: Commercial Bank of Kuwait requires that applicants be between 21 years and 68 years (58 years for Kuwaitis) before they can qualify for a housing loan. National Bank of Kuwait also limits the loan to people below 70 years of age. Car Loans Banks may or may not have specific requirements before approving a loan. Some of the requirements include: Downpayment: Ahli United Bank requires a 20% down payment on the value of the car loan. Banks like Gulf Bank, National Bank of Kuwait, Kuwait International Bank, among others, do not require a downpayment. Minimum Salary: Kuwait Finance House does not have a minimum salary requirement. However, Gulf Bank and Al Ahli Bank of Kuwait require a minimum salary of KD300. Kuwait International Bank requires a minimum salary of KD200 while the National Bank of Kuwait and Ahli United Bank require a minimum salary of KD 400. Maximum Loan Offer: Kuwait International Bank limits car loans to KD 15,000 while Gulf Bank, Kuwait Finance House, National Bank of Kuwait, and Al Ahli Bank of Kuwait limit car loans to KD 25,000. Credit Cards Credit cards come in different shapes and forms. Each bank has many credit card offers with different requirements. Here are some requirements for some selected credit cards from some selected banks: Minimum Salary: Visa Platinum Select credit card offered by Kuwait Finance House and Gold credit card provided by Ahli United Bank don’t have minimum salary requirements. Burgan Bank’s Mastercard Gold credit card has a KD 500 minimum salary requirement. The minimum salary requirement is KD 50,000 for Gulf Bank Visa Infinite credit card, KD 400 for Commercial Bank of Kuwait’s Gold Visa card, and Kuwait International Bank’s Al Moyassira Visa credit card. Annual Fee: Burgan Bank (Mastercard Gold credit card) and Kuwait International Bank (Al Moyassira Visa Credit Card) does not charge an annual fee. The annual fee is KD 25 for Visa Platinum, KD 100 for Visa Infinite, KD 78 for Gold Credit Card, and KD 50 for Gold Visa Card. Annual Rate: Visa Platinum Select credit card and Gold credit card have no annual rate. The annual rate is 1% for Al Moyassira Visa credit card, 2.5% for Gold Visa card, 8.33% for Visa Infinite credit card, and 0.5% for Mastercard Gold credit card.Compare the best personal loans in Kuwait After that long (and necessary) journey through individual bank conditions and requirements, we are ready to consider how you should go about shopping for these personal loans. The tedious way to access personal loans in Kuwait One way to access personal loans in Kuwait is to come up with a list of the best banks. Once you have this list, you can visit one by one. You should also become familiar with the best banks in Kuwait. However, visiting each of these banks in person is time consuming and can lead to frustrating mountains of paperwork for a loan that you likely need urgently. Luckily, there is now a better way. FinFirst: One-stop access to the best personal loans in Kuwait FinFirst is a loan matching application that quickly connects you with the best personal loans in Kuwait. After signing up to our platform, you’ll be instantly connected to details of the best personal loans on a single page. From there, we make it easy to send a single application to all loan providers,and then select the best deal that matches your financial situation. Instead of going through the websites of each bank or visiting each bank in person, FinFirst allows you to access the best loan offers from one central platform. With FinFirst, getting access to the best personal loan is now stress-free and straightforward. Visit FinFirst now to get the best personal loan deals in Kuwait. [Are you an expat or Kuwaiti who needs finance to get a new house, car, furniture, education, etc.? Are you an expat or Kuwaiti who needs funds to meet emergencies, pay medical bills, or purchase consumer items on the go? Sign up to FinFirst’s super app and start connecting with top banks within minutes.]