What happens if you don’t repay loan or credit card dues in UAE?

If you are unable to or lax with the repayment of your credit card or other loans, then it could really be bothersome in the long run and if you are in the UAE, then you would have a really tough time.

When a person applies for a credit card in the UAE, the issuing banks take blank cheques as an assurance for repayment of their loans. The problem starts when you default on your repayment obligations.

Debt-Collection Agents

The first brush up you would have is with the debtor collection agencies or directly the creditors. They will start calling you first and then start hounding your residence and your office to collect the overdue payments. The will try to persuade you either in a polite or a rough manner — the degree depending on how you tackle them.

Deposit of your Blank Cheques

If even after constant persuasion, you do not regularize your loan account or credit card debt, then the bank will deposit your cheques for clearing, which they had obtained earlier from you, Once the cheques get bounced, the police authorities comes into the picture.

Police Case Against You

Once your cheque is bounced, then a police case is filed against you. Earlier cheque bounce used to be a criminal offense in the UAE, but recent changes in the law have made cheque bouncing a civil offense. So you can heave a sigh of relief that under the new laws, you would not be arrested.

But the police will keep an eye on you lest you try to flee the country.

Credit Score Goes for a Toss

The other consequence of not paying your credit card or other loan debt besides facing the debt-collectors and the police authorities is that your credit score gets damaged. This means that in the future, many financial institutions won’t lend you money. Also. you will be debarred from applying for any credit facilities from the banks.

In the last few years, there are many expatriates who have fled Dubai or UAE because they were unable to repay their debt. But they are still debtors in the eyes of the banks and the UAE government. However, certain provisions have been made for defaulting borrowers to re-enter the country in an easy manner, so long as they repay their existing debt with the banks.

How To Re-Enter UAE or Dubai if you are a Loan Defaulter?

Here are the steps you need to go through in order for a defaulting borrower to enter UAE or Dubai once more:-

  • Appoint a Representative

When you are outside the country, you need a person to represent yourself in UAE. This can be any person you trust and can present power of attorney to on your behalf, to deal with the financial institutions or banks. Many banks will accept a simple letter of authorization.

  • Negotiate a Settlement with the Bank

Once you are done with the appointment of a representative, the next step is to negotiate an amount of settlement with the bank. Many times, banks are willing to offer up to 50% of waivers on your credit card or other loan outstanding if they find that you really serious about repayment. Secure the best repayment terms at an acceptable amount.

The reason you don’t want to hire anyone but a lawyer is that you want a good negotiator to negotiate for you. Even though a non-lawyer would do, but won’t be that competent to read between the fine lines.

  • Have Everything Written

Once you have negotiated the settlement, the next part is to put everything down in writing on the bank’s letterhead and stamp. The reason this is important is that many times, bank officers and employees often get transferred and the new officer in charge may demand the clearance of the entire amount outstanding and not the settled amount.

Hence, it is important to have everything in black and white so that you have concrete evidence in case the banks demand some extra sum.

  • Ask for a No Dues Certificate and other clearance certificates

Once you have settled the account with your creditor, ask for a  no dues certificate confirming that you have repaid the entire loan. Also, ask for a certificate to be submitted to the police authorities confirming that you have paid the loan for removal of the police case against you.

Many times, the banks also directly intimate the police about the closure of the loan account. This generally takes about 2 weeks.

  • Get a Police Clearance Certificate

After the bank clearance certificate, obtain a clearance certificate from the police authorities, to clear any case pending against you. The police will cancel the case against you. However, insist on having a written document confirming the same from the police authorities.

Often times, you would have to start the procedure of obtaining a police clearance certificate by contacting your embassy and follow the set guidelines for the same.

  • Free to Re-enter UAE

With all the loan outstanding and credit card dues repaid, and all the clearances obtained, you journey back to the country will be smooth and enjoyable. You would no longer worry about collection agents, or banks or the police authorities troubling you.

10 thoughts on “What happens if you don’t repay loan or credit card dues in UAE?”

  1. Avatar for Fouad Hasan

    I have a personal loan with Noor Bank and my outstanding amount is AED 238,000. I am unemployed since August 2017 and my monthly EMI is deducted from my gratuity. Now after my gratuity is finished I am unable to make the payments. What will happen if I do not pay my installments. If a police case will be registerted then how many days or months do I have to be jailed.

  2. Avatar for Parul Arya

    My name is PArul Arya, i lived in UAE for 20 years but last year i had a severe loss in business hence i had to leave the country. I had 2 property loans and 3 credit card payment….somehow in loss i was able to sell the properties and clear the loans but i couldnt not pay credit card amounts
    my total outstanding is:
    Emirates NBD: 157500
    RAK Bank: 54000
    Dubai First: 107,000

    I paid lot of times minimum payments but still the amount is keep coming more and more …now i hv no money at all to pay anymore. But i really want my name to be cleared
    will you able to help. If yes, Please send me an email.
    Though i hv no plans to ever come to UAE but i still want to clear my name. I am not someone who keeps anyones money

  3. Avatar for aamar

    i did not pay 113k to bank . immigration will arrest me at aiport? what about police case? how long i will be in jail or need to pay fine?

  4. Avatar for sasha shetty
    sasha shetty

    i have credit card from mash req bank, now aed 6000 is due and total outstanding aed 51000, not paid last one month. when they call that time i told will pay.
    but they bounce cheque immidiately.

    -Kindly advise after how many months they will bounce cheque
    – Police will arrest

  5. Avatar for Muhammad Loqman
    Muhammad Loqman

    Hi, I’ve a personal loan of 57k & 25k car loan & jobless. I’ve one installment pending from both loans & bank has send me a final warning stating my cheques will be bounced & a civil case will be filed falling travel ban.
    Pls. Advice on wat needs to be done.

  6. Avatar for Chandrmohan


    I have personal loan of 25k and 3 different credit cards due as 55k, 35k abd 20k and I am jobless.
    Please advise.

    Currently looking for a new job to start repay my debits.

  7. Avatar for Bijendra Gurung
    Bijendra Gurung

    Greetings ,
    I am recently working here in UAE and my wife whose visa was under my sponsorship has left the country due to this pandemic as her company had given them unpaid leave on long terms. By the same time she requested to accept the resignation & settle the Gratuity which her company did and also they had kept her labour card active with the option if she is interested to join then she can once she comes back. So by now her labour card got expired and it has not been renewed as they require attested academic certificate to do so . However the company is not in position to re-open . She has a outstanding loan of 40K with the bank and Babk has allow her for deferrment for few months.
    In the above said case, what will happen if she won’t come back to UAE ?
    Can I still cancel her visa with her passport only ?

  8. Avatar for Tony

    I have a personal loan of AED 121000/-. The bank has provided me witha deferment.
    Cc of AED 8k. This is with Dubai First Bank and they are not Willing to give me a deferment. An outside debt collection agency is callinh me now and saying they will deposit the cheque. I have been unemployed since September 2019. Please advice what I can do.

  9. Avatar for Malik

    If I have a case in court and I was charged to pay and I don’t have the money what will happen to me at the end

  10. Avatar for Ann

    I have 6k credit card payment because of pandemic i cant pay monthly and of course salary delays, and its hard , the collection department keeping calling me and disturbing me. Really, I cant work properly coz even work time if i missed calls , they sending WhatsApp messages, emails… They cant wait…

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