How to take personal loan in Saudi Arabia as an expat?

Due to reliable SIMAH credit reporting, it is not difficult for foreigners and expats to take a personal loan in Saudi Arabia. Here is the process;

Requirements for a personal loan

The following are the general requirements that an expat needs to fulfill to get a personal loan from any bank in Saudi Arabia;

  • Salary Certificate attested by the chamber of commerce.
  • Salary Slip for the last 3 months.
  • Bank Statement for the last 3 months.
  • Iqama and Passport Copy.
  • Employment tenure with the current employer for one year. 
  • A commitment from the employer to inform the bank in case of resignation/termination.
  • Good SIMAH Credit Report (The bank will arrange it).

How to take personal loan in Saudi Arabia as an expat?

Employee Loan Policy

Check with the HR of your company if they have an employee loan policy. Some companies pay 12-months housing in advance which can accommodate your current financial needs.

In this way, you are taking an interest-free personal loan from your employer.

Taking Personal Loan

If a foreigner has a good salary package and well-maintained credit history, every bank in Saudi Arabia would like to lend a personal loan to him. Here are some tips to find the lender at the lowest interest rate.

Step 1: Employee Loan Agreement

Check with the HR of your company if they have an employee loan agreement with a bank. The interest rates offered by the banks with this kind of agreement are way better than the rates negotiated individually. 

Step 2: Take quotations from banks

No matter if your employer has an employee loan agreement or not, an expat should visit different banks in Saudi Arabia to take quotations for a personal loan.

There is a possibility that another bank is offering loans at a better interest rate than the employee loan agreement negotiated by your company. Some major banks in Saudi Arabia offering personal finance are;

Step 3: Evaluate the offers

While evaluating the offers, a foreigner should always consider the upfront bank charges and the interest rate. Sometimes banks offer a lower interest rate but charge around 2% as an upfront admin fee.

Make an excel sheet and take into account all the costs that you will have to incur. 

Step 4: Salary Transfer

Banks offer a personal loan at a lower interest rate to expats if their salary is being transferred to the same bank account. It is a good idea, to open a bank account with them and get your salary transferred for a better bargain.

Step 5: Spend your Money

Once the loan is approved and disbursed, make sure to spend it to buy an asset rather than a liability. If you are planning to buy a car with a personal loan, think twice. You are going to buy a liability.

Personal Loan and Final Exit

Foreigners who take personal loans want to know if they can leave on a final exit while the amount of the loan is still payable. We have covered this topic here.

Personal Loan and Job Transfer

There would be no impact on the personal loan if you change your job and transfer your sponsorship in Saudi Arabia. The only requirement by the bank is that you keep on paying the due installments.

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Steve has been living in Saudi Arabia since 2013 and writing about Saudi rules, regulations, guides, and procedures since then.