To the majority of bank customers in the UAE, the entire banking process seems to be a black box, with no transparency on how potential customers are evaluated for loans. bayzat continues to demystify the industry, with the introduction of a maximum loan amount calculator as part of the application process for personal loans, auto loans and home loans.
The UAE Central Bank specifies that no more than 50% of an individual’s monthly income can go to debt payments (known as the Debt Burden Ratio or DBR). Banks follow this requirement (along with other criteria) to determine the maximum loan amount than can be offered to a borrower. bayzat has integrated this process into its platform, and can now show users the maximum loan amount they could be eligible for; note that other factors such as the individual’s employment status, and the final interest rate offered, will be used to determine the actual loan amount offered to the customer.
The Debt Burden Ratio is a calculation that helps identify the ability of the applicant to repay the monthly installments on a loan. All financial institutions will analyze the existing debt of any applicant coupled with their monthly income. This will help determine if the applicant can afford to pay the monthly installment while also meeting their typical living expenses.
The new loan amount calculator is now the third step of the online auto loan, personal loan and mortgage application process that bayzat offers. It allows you to estimate the maximum loan amount you could possibly receive, from the comfort of your own home without actually needing to go into a bank and having to sit down with a loan officer. The importance of knowing your DBR is highlighted by Talal Bayaa, CEO and co-founder of bayzat, “DBR is one of the main financing criteria and if calculated incorrectly will lead to major difficulties for both the applicant and the lender as the applicant will be unable to repay outstanding dues on exact dates as well as the lender's delinquency ratio will be negatively affected. Calculations like these can be complex and bayzat helps you understand your eligibility for a home loan before approaching the bank.”