Document background
The Personal Loan Agreement serves as the primary legal document for personal lending transactions in the United Arab Emirates, structured to comply with UAE Federal Law No. 5 of 1985 (Civil Code) and UAE Federal Law No. 14 of 2018 (Central Bank Law). This document is essential when a financial institution extends credit to individual borrowers, whether through conventional or Islamic banking channels. It encompasses all necessary provisions required by UAE law, including loan amount, repayment terms, applicable interest/profit rates, and security arrangements. The agreement is designed to protect both lender and borrower interests while ensuring compliance with UAE Central Bank regulations on personal lending, including maximum loan amounts, debt burden ratios, and consumer protection requirements. It's particularly important in the UAE market where both conventional and Sharia-compliant lending options must be accommodated within the legal framework.
