Chanchal Singh is a content strategist at Paisabazaar.ae, focused on banking and finance-related content for the UAE market. With over 2 years in insurance & finance content, she specialises in making personal finance simpler for individuals and businesses. She breaks down complex financial concepts into clear, actionable insights, enabling you to evaluate options and make informed decisions through research-driven, user-centric content.
Reviewed ByRavindra DhakarProduct Manager
Ravindra Dhakar
Product Manager
With 4+ years of experience in banking and financial services, Ravindra Dhakar serves as a Product Manager at Paisabazaar.ae, specialising in banking and finance products. He is adept at developing customer-centric financial solutions, optimising product strategies, and driving innovation across lending, payments, and consumer banking to enhance financial accessibility and user experience.
RAKBANK personal loans and other financing products are among the most popular choices for those seeking loans in the UAE. While these loans are known for attractive interest rates, affordable instalments, high loan amounts, and more, another notable aspect is the RAKBANK loan deferment option.
If you have taken an auto loan, home loan, or personal loan in UAE from the bank, you can request the lending bank to defer your loan in case you are unable to make payments towards your loan, whether due to COVID-19 or any other legitimate reason.
To apply for a loan deferment with RAKBANK, you would be required to contact the bank, obtain and fill out the RAKBANK loan deferment application form, and explain your financial situation as to why you want to apply for the loan deferment.
After at least 6 months of making regular loan repayments for a RAKBANK personal loan, you can apply for a one-month loan deferment. Keep in mind that you can make up to 2 loan deferments (for a month each) in a year.
For auto loan deferments, the conditions are similar, i.e., you can avail of up to 2 deferments per year and must have made at least the first 6 monthly repayments on time. As far as home loans are concerned, the bank doesn’t allow deferments in usual cases unless you are facing any financial issues due to COVID-19.
RAKBANK Loan EMI Deferment
When you apply for a RAKBANK loan deferment, you are, in effect, applying for a loan EMI deferment. When you apply for loan deferment, you effectively apply for the instalments to be paused for a certain period. These instalments are to be paid later, which leads to an increase in your loan repayment tenure.
How Does the RAKBANK Loan Deferment Work?
When RAKBANK defers your loan, it does not mean you are absolved of making the payment for the stipulated period. It simply means that the bank has delayed the repayment of the loan until a later date.
When the bank approves your request for deferring the personal loan payment, it also means you are delaying the payment without violating the loan agreement. In addition to RAKBANK, several banks in the UAE have extended loan deferment programs, especially amidst the financial crises propelled by the pandemic.
The RAKBANK loan deferment process is fairly straightforward. You have to first inform the bank about the same and your conditions. Once you submit your application and the required documents (if any), the bank would go through your application. It would also examine whether you qualify the eligibility criteria, i.e., whether you have paid at least 6 monthly instalments on time and more.
If your application is approved, you would be informed regarding the same by the bank.
Features & Benefits of RAKBANK Personal Loan Deferment in UAE
Listed below are the primary benefits and features of RAKBANK loan deferment –
RAKBANK personal loan deferment helps you avoid the stress of making regular loan repayments for some time, which can be beneficial if you are facing any financial difficulty
Loan deferment periods are longer as compared to grace periods, eventually giving you more time and flexibility to realign your finances
RAKBANK loan deferment option also saves you from repercussions of missing instalments such as loan collateral repossession
Fees & Charges for RAKBANK Loan Deferment
Here’s how the fees and charges are applied –
RAKBANK charges AED 100 (AED 105 after VAT) for deferring an instalment
The bank allows you to defer one instalment for free after you have paid regular instalments for at least 6 months
Does RAKBANK Personal Loan Deferment Affect Your Credit Score?
Short answer – no!
An approved personal loan deferment wouldn’t negatively impact your credit score as your bank would not report it as a missed or skipped payment to the Al Etihad Credit Bureau (AECB), which calculates your credit score in UAE.
However, if you miss an instalment without approval from the bank, it would be reported as a missed or skipped instalment. This would be reported as it is to the AECB, which can bring down your credit score.
To Conclude
RAKBANK UAE has an excellent feature to help you repay your loans easily in the form of loan deferment. With this, you can defer payments for the repayment of your loan if you are facing any major financial hurdles, whether due to the pandemic or any other reason.
The primary benefit of this deferment is that you can continue repaying your loan after a brief pause, during which you can sort out your financial situation. Additionally, you can be assured that your credit score won’t be impacted by such a deferment.
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