More than a quarter of respondents polled recently by compareit4me.com, a UAE-based finance comparison website, have admitted to missing a payment or making a late payment on their existing loans.

The online survey, conducted between July and August, found that 5.8 per cent of the respondents have often defaulted on their loans, while 19.3 per cent have missed or made a late payment once or twice in the last 12 months.

“The results of this year’s financial survey are quite concerning as more than one in four of those polled also described their monthly debt repayments as ‘stressful’,” said Jon Richards, CEO of compareit4me.com.

Around 77 per cent of respondents confirmed that they have some form of debt with UAE banks, with credit cards (54.7 per cent) topping the list, followed by personal loans (43.6 per cent), car loans (12.6 per cent) and mortgages (4.1 per cent).

The survey reflects the steady uptrend in consumer lending as UAE banks continue their recovery from the 2008 recession. Incidentally, credit ratings agency Standard & Poor’s even forecast a 10 per cent to 12 per cent nominal growth in UAE personal credit in 2014 and 2015.

“Consumers need to be proactive when it comes to managing debt if financial obligations become a struggle,” Richards said. “Consumers need to act fast to find more manageable options.”

“Refinancing debts should be the first thing people look into: as the banks compete with each other, rates inevitably come down leading to cheaper credit. If you have a loan which is over 12 months old, it is likely you will be able to get a better rate today, so make sure you look into it. Consumers also need to look at consolidating debts wherever possible, such as credit cards for example which have a much higher interest rate than a personal loan. This alone could save you thousands, particularly if you only make the minimum payment each month,” he said. – TradeArabia News Service