Tuesday, 3 July 2012

Common sense on lending regulations - The National

We've all seen the advertisements: drive it starting today, pay for it starting next year. That sort of inducement promises consumers the good life, and on convenient terms. But too often borrowers find themselves driving their sleek new vehicles in the express lane to a serious credit crackup, or even to debtors' prison.

Car loans, mortgages, credit cards, consumer lending: most people who have a steady income, even if it's a small one, can borrow money in one way or another - or rather one way and another - with little difficulty.

But then banks and other lenders enforce their rights with an iron hand, aided by a bounced-cheque law that has landed both Emiratis and expatriates in jail simply because they owe money. Last National Day, the government set up a Dh2 billion fund to clear the debts of Emiratis in default on loans.

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