UAE Banks to Introduce New Loan Transfer Rules From January 2027

UAE banks are preparing new rules for customers who want to transfer their outstanding loans from one financial institution to another, with the proposed measures expected to begin on January 1, 2027.

Under the anticipated framework, borrowers may need to remain with their original lender for a specified period before switching banks.

They may also be required to pay a minimum number of monthly instalments before requesting a transfer.

The proposed changes aim to bring greater structure to loan transfers across the country's banking sector.

New Conditions for Transferring Existing Loans

The proposed regulations are intended to reduce frequent movement between banks by customers seeking more attractive financing offers.

Repeatedly closing and refinancing loans over short periods can create additional administrative work and financing costs.

The new framework is expected to clarify the minimum waiting period, the required number of repayments and any exemptions that may apply.

It will also explain whether the restrictions cover only personal loans or extend to other banking liabilities.

However, the final conditions have yet to receive official confirmation.

Banks Compete With Better Financing Offers

The anticipated changes come as UAE banks compete to attract customers who want to move existing loans to other lenders.

Financial institutions have been offering lower interest rates or profit margins, revised monthly repayment arrangements and promotional repayment holidays.

Some offers reportedly allow payment deferrals of seven to 12 months for UAE nationals and six to nine months for expatriates.

Although these incentives may provide short-term relief, borrowers should carefully review the complete terms.

Depending on the agreement, deferred payments could increase the overall borrowing cost or extend the repayment period.

What UAE Borrowers Should Consider Before Switching Banks

Customers planning to transfer their loans should compare the total repayment amount, interest rates, fees and loan duration before accepting a new offer.

A lower monthly instalment does not always mean that a financing arrangement is cheaper overall.

Borrowers should also check their existing loan agreements and ask banks about any conditions that could affect a transfer.

The exact waiting period, minimum repayment requirements and scope of the proposed regulations will become clearer after official instructions are announced.

Until then, customers should avoid assuming that the reported measures have been finalised.