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October 23, 2016 | 13:30 | Dubai
The UAE personal finance market has been a subject of scrutiny over the last few quarters. The third quarter of 2016 has been all about news around rising consumer debt, tightening liquidity and dwindling deposits. But from a consumer point of view, quite a few questions still remain unanswered. Which personal finance products are users interested in? What are the key drivers behind their financial decisions?
Souqalmal.com delves deeper into the 800,000 plus visits it gets every month, to reveal what users are really looking for. Here’s a look at the top trends shaping consumer demand for personal finance products in Q3 2016.
Personal loans most sought after, Non-salary transfer options reign supreme Keeping up with the trend seen in previous quarters, personal loans retain the status of ‘most searched for’ personal finance product in the third quarter too. With searches surging by 28% as compared to Q3-2015, personal loans made up 37% of all product searches on Souqalmal.com.
So which type of personal loans are users really after? Non-salary transfer loans were revealed to be the most sought-after variant. When compared with the results from Q3-2015, searches have soared for personal loans with no salary transfer requirement as well as those being offered to employees of non-listed companies.
Credit cards make up one-third of all searches, Rewards outplay fees
Searches for credit cards went up by 14% quarter-on-quarter, making credit cards the second most sought after personal finance product on the site. More users are seeking credit cards that don’t compromise on rewards. There has been an increase in searches for cards offering cinema discounts, air miles, and dining discounts, irrespective of the annual fees charged.
This is in stark contrast to the same period last year, when users displayed a more cost-conscious approach towards credit cards, and annual membership fee was a key deciding factor.
Further analysis also revealed a difference in product preferences, based on users’ salaries. While, those earning AED 15,000 or lower showed an interest in cards offering cashback and balance transfer features, others earning higher salaries, especially more than AED 35,000, preferred cards with a miles program.
Home loan searches up by 16%, Introductory fixed rates losing charm
Home loans also rose in popularity in the third quarter, with a 16% increase in searches on the site. In line with the trend visible in previous quarters, variable rate mortgages continued to be the more popular variant.
Users are putting a higher emphasis on the long-term merits of interest rates, since introductory fixed rates usually don’t last beyond two to three years. Another restriction that doesn’t play in favour of fixed rate loans, is that most banks don’t allow partial settlements during the fixed rate tenure.