Bank relations a love-hate story

Say bank services or personal loans, and you will find it hard to get people to stop rambling about their own experiences - unfortunately most of them are kind of negative. Are they more controversial than the cost of living in the UAE? It depends on who you're talking to.

But bank deals remain a love-hate relationship: almost everyone of us has landed some sort of finance, and perhaps doesn't mind another cash loan, mortgage or a credit card, but we are always willing to blast the system for not functioning as well as we are hoping for.

Interest rates aren't as advertised, banks use blank cheques to secure the loans, terms are loose enough to trap customers, and getting out of a loan agreement isn't always the easiest. I am sure it can just go on and on.

In the banks' defence, they need to cover their own risks while lending to individuals, who are mostly expatriates with no known credit history. But while you've no choice except dealing with them, what about trying to at least try to avoid common pitfalls?

First of all do your best to ignore the text messages about the latest and greatest bank offers and the sales agents knocking on your door to sell their best products. There is no latest, best or greatest.

Use your own common sense to simply figure out what the deal is all about. How many personal loans are you planning to take out during your stay in the UAE? One or two? Okay. So have a list of questions ready and go shopping. Compare interest rates, repayment length and terms, and of course the conditions and penalties for early loan settlement. The exercise will also prove beneficial as it may give you an insight into the quality of each bank's customer service.

Convenience

Those who won't answer your call, reply to your emails or accommodate your request in the manner you're expecting, are less likely to be there when you need their assistance. Some extra convenient matters, which may be worth checking, include the network of branches and possibility to do business at any of the bank branches instead of being tied to one location for anything related to your loans.

For example, I once asked colleagues about their experience with a number of banks. One said his bank had no extended hours, no branches near where he lived and works, and parking was hell around it. So each trip to the bank meant at least a couple of hours in Dubai's infamous traffic taken from his business day. He had to have his payroll account there and "it was a mistake to do any other business with them," he said.

However, you need to be careful while judging such personal views to make sure you aren't being dragged by personal misinterpretation of one factor. But don't discredit them completely since some may be invaluable in pointing to certain banks' points of weakness that won't even occur to you.

Finally, launch your own matchmaking process. For example, a bank that offers a shorter repayment period but lower interest rate and better customer service may be a good bet if you can afford the monthly payments. What you really need here is to have your priorities straight while balancing convenience with advantages and affordability.