Falling short of savings to meet expenses, fund your wedding or take a vacation? If getting a personal loan is the route you are planning to take, make sure you do so responsibly and watch out for road blocks along the way.

Also known as an unsecured loan, a personal loan does not require collateral such as your house or your car. Instead, other factors such as your credibility as a borrower and how likely you are to pay back the loan amount will determine whether you’ll be taking home the money.

Below are six tips that can help you increase your chances of getting your personal loan application approved.

Limit your DBR

Before you knock the doors of your bank, take a step back and examine your current debt. Banks are wary of lending to individuals who are already overwhelmed with existing debt. The UAE Central Bank regulations state the debt burden ratio (DBR) for anyone in the country cannot exceed 50%. In other words, your total monthly installments from existing loans should not exceed 50% of your monthly income. So if you earn AED 10,000 a month, you cannot be repaying more than AED 5,000 in monthly debt repayments. This measure ensures that you do not get caught up in a debt spiral, owing more than you can actually pay back.

Tip: Your DBR is calculated by adding up all monthly repayments on your loans and 5% of the total credit limit on all your credit cards.

[Related: Calculating your debt burden ratio]

Keep a clean credit record

One of the important factors that will determine your eligibility for a personal loan is your credibility as a borrower. Banks in the UAE can access your full credit history through your credit report. What does that include? – All your existing loans and credit cards, any missed or late repayments as well as your DBR. Just a few days back, Al Etihad Credit Bureau (AECB) also introduced a credit scoring system. What can you do to improve your credit score? – Make sure you pay your bills on time, make timely loan and credit card repayments and get rid of some existing debt before you apply for more.

Tip: Plan ahead and request your own credit report and credit score from AECB and make sure there are no errors that may hurt your chances of loan approval.

Work for a company that’s listed with the bank

This is one of the basic questions you will face, when applying for a loan in the UAE. Listed companies are those that have submitted their financial results to the banks, who in turn have assessed their financial stability. And since they are approved or listed, banks are more open to giving out loans to individuals who work for these companies. Based on whether the company you’re work for is listed or not, the bank can approve, deny or charge a higher rate on your loan.

Tip: If you want your company to be listed with a certain bank, contact the bank and connect them with your company’s HR, who can then take the process forward.

Get a co-applicant

If you’re not able to qualify for a personal loan because of your low income, existing debt or poor credit score, a co-applicant might be just what you need to improve your chances of getting your loan approved. A co-applicant is a person (usually a spouse or close family member) who agrees to pay back the loan in the event you are not able to. The bank will take into account both applicants’ assets, income and credit history to determine your loan eligibility and interest rate.

Be willing to transfer your salary

Banks need assurance that your income is stable and adequate to pay back the loan amount. And for the same reason, salaried individuals with fixed incomes are the ideal candidates. Transferring your salary to the same bank you are requesting a loan from, increases chances of loan approval as well as lowers the interest rate.

Find out if you’re pre-approved for a loan

Not every potential borrower is aware of this, but you can simplify and fasten the process of applying for and securing a loan by reaching out to banks that offer you a loan pre-approval. Knowing which loans you are pre-qualified for means two things for you – No wasting time with loan products you’re ineligible for and no filling out lengthy application forms for each bank you’re applying to.

Compare your options thoroughly

To make sure you apply for and meet the requirements of the right personal loan do your research and compare all your options before even heading out to the bank. On Souqalmal.com, you can filter results based on a number of criteria from over 100 personal loans to find the one that best suits your requirements.

Tip: You can also use our Personal Loan Calculator to find out how much the loan will actually cost you. This easy-to-use tool also provides you with a list of personal loans that you are eligible to apply for, based on your salary.