Bank loans must be repaid even if you lose your job

The bank will consider repayment of a bank loan and your employment as two unrelated issues and repayment of bank loan should not relate to your employment. Once you avail a loan from a bank, you are liable and responsible to pay the installments on timely basis even if you are not employed. There is no legal option available to put the loan repayment installments on hold if the borrower loses his employment, unless the bank agrees to put on hold repayment of loan installments.

The bank has all the right to file a complaint against you for recovery of loan amount in full one-time settlement if you don't pay your loan installments for three consecutive months or six non-consecutive months. This is in accordance with Article 4 (4) of (draft) personal loan agreement issued by the Central Bank of the UAE via notice no. 3692/2012 dated 17/07/2012 to all banks and finance companies in the UAE under the subject: 'general terms and conditions and loan agreements-texts drafted and approved by the Emirates Banks Association. It states: "The loan elapses and all the installments, interests and any other fees and expenses become due and payable immediately without having to give any notification or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law in the event of borrower failing to pay three consecutive installments or six nonconsecutive installments of the monthly installments without approval of the bank."

Normally, there shall be no hindrance in change of your employment visa status to a new employer even though you have an outstanding bank loan provided you take the bank in confidence of such a change by providing them with necessary information related to your new employment.