Lost a job in the UAE? Even though the UAE’s overall unemployment rate is extremely low, almost at 1.9% in 2025, sometimes people can end up on the other side. Losing a job is tough, especially if you have to repay your loan. Many people in Dubai have taken loans for different purposes, such as buying a car, purchasing property, or for personal expenses. But, what happens to loan after job loss UAE? Let’s find out.
What Is The Legal Framework For Loan Obligations?
There are federal laws to govern the legal framework for loan obligations in Dubai. To understand what will happen to the UAE loan repayment after job loss, you must understand the legal framework first to ensure you are properly informed. There are a variety of legislations outlining the legal terms for both bank and loan seeker. But, the actions upon failure to repay the loan could be severe for the people.
There could be an official payment order from the judge or filing a civil lawsuit against the debtor to recover the outstanding balance. If the debt exceeds AED 10,000, and there is a lurking fear that the debtor might flee the country, there could be a travel ban as well.
However, Dubai not only offers protection to creditors but also has ample policies to ensure that the debtors are protected too. The debt collectors have to follow ethical guidelines. And there has been an open pathway for people who are seeking ways to restructure their debt under court supervision, often including the temporary suspension of enforcement actions. As a debtor, you have the right to request a revised payment plan directly from the bank or request a settlement.
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Does Losing A Job In Dubai Alters Loan Obligations?
Unfortunately, losing a job in Dubai does not automatically cancel or suspend the loan obligations. Let’s have a look at some of the most important UAE job loss loan rules.
- The Federal Decree Law No 50 of 2022 (The Commercial Transactions Law) states that a personal loan after job loss UAE remains a binding contractual obligation even if the borrower’s employment is terminated.
So, what does this mean?
You cannot postpone or divide your installments unless your bank agrees. But, you may be able to achieve it if you are really struggling to make ends meet because of your financial situation. If you have recently lost the job, chances are you have to pay the same loan installments as you were paying before.
What you can do to revise, suspend, or defer your payment plan is to formally write to the bank and request for an agreement. If you fail to do so, your delayed payments will be labelled as default, which means that the bank can now initial legal recovery measures to obtain their remaining loan installment.
All in all, if you lose a job or you are switching the job — the banks are not legally obliged to freeze the loan installments. You can seek temporary relief from the creditor, which your bank can grant you considering the internal hardship policies and the UAE Central Bank’s Consumer Protection Regulations (2021).
What If I Am Unable To Pay My Loan Installments After Losing A Job In UAE?
There can be situations where the borrower is suffering from a severe financial crisis, making repayments impossible. In such a situation, you can seek protection under the Federal Decree-Law No. 19 as amended by No. 35 of 2021 Insolvency of Natural Persons Law.
This legal framework allows the court to supervise the restructuring of the debt and suspend the enforcement actions temporarily until your bank arranges the repayment plan.
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How Can You Request Loan Installment Restructuring?
Many banks in UAE have policies regarding the internal hardships and rescheduling even though it is not mandatory according to the law.
If you have lost your job or you are facing a disruption in income, you can request a restructuring of the payment plan under the UAE Central Bank’s Consumer Protection Regulation (2021) and Notice No. 3692/2012 on personal loans. The law encourages the banks to consider solutions, including:
- Short-term payment deferment usually of one to three months
- Extension of tenure or instalments restructuring
- New repayment scheduling that aligns with the current income levels
Remember, your bank will take into consideration your financial history, capacity to repay the installments, or supporting documents to check whether you are eligible for the relief or not.
All you have to do to request this restructuring is to:
- Notify the bank immediately after losing the job
- Submit all the relevant documents to support your claim of difficulty in repayment
- Formally request the payment restructuring in writing or deferment
- Sign the revised repayment schedule once everything is confirmed.
