In Saudi Arabia, personal loans (often referred to as "personal finance" or "tawarruq") are regulated by the Saudi Central Bank (SAMA). While individual banks set their own internal policies, most financial institutions adhere to a standard set of eligibility criteria for both Saudi nationals and expatriate residents.
The following sections outline the specific requirements applicants must meet to qualify for financing.
Age and Residency Status
Banks classify applicants into two primary categories: Saudi Nationals and Non-Saudi Residents (Expats). The age requirements differ slightly between these groups.
Saudi Nationals: The minimum age is typically 18 to 21 years old, depending on the bank.
Expatriates: The minimum age is generally higher, usually starting at 22 or 23 years old.
Maximum Age: For most employed applicants, the loan must be fully repaid before the borrower reaches the age of 60.
Retirees: Retired Saudi nationals may be eligible for financing up to the age of 70 or 75, provided they have a steady pension income.
Salary Requirements
Income thresholds are a primary determinant of eligibility. Banks require proof of a stable monthly income to ensure repayment capacity.
Saudi Nationals:
Basic personal loans often require a minimum monthly salary of SAR 3,000 to SAR 4,000.
Some premium banking tiers or specific loan products may require salaries starting from SAR 10,000.
Expatriates:
The minimum salary requirement is higher, typically ranging from SAR 5,000 to SAR 7,000.
Certain banks may require a minimum of SAR 10,000 for expats employed in non-government sectors.
Employment and Tenure
Lenders assess the stability of the applicant's job and the reputation of their employer.
Approved Employer List: Most banks maintain a list of "approved employers." This includes government bodies, semi-government entities, and large private corporations. Applicants working for companies not on this list may face stricter requirements or higher interest rates.
Length of Service:
Saudi Nationals: Typically require 1 to 3 months of continuous service with their current employer. Government employees may sometimes qualify immediately upon employment.
Expatriates: Generally require 12 months of service. However, some banks may accept applicants with as little as 3 months of tenure if they work for a government entity or a major multinational corporation.
Salary Transfer: The majority of personal loans require the applicant to transfer their monthly salary directly to the lending bank. Loans without salary transfer exist but come with higher interest rates and stricter eligibility caps.
Creditworthiness and Debt Burden Ratio (DBR)
Financial behavior is tracked centrally to prevent over-indebtedness.
SIMAH Score: All banks check the applicant's credit history through the Saudi Credit Bureau (SIMAH). A low credit score due to late payments, defaulted bills (including telecom bills), or outstanding disputes will result in automatic disqualification.
Debt Burden Ratio (DBR): SAMA regulations cap the percentage of a borrower's salary that can go toward monthly debt repayments.
Total monthly debt payments (including the new loan, credit cards, and car loans) generally cannot exceed 33% of the monthly salary for employees.
For retirees, this limit is often set at 25%.
If the borrower has a mortgage, the total DBR cap may increase to 45%.
Common Disqualifying Factors
Even if an applicant meets the age and income criteria, the following issues frequently lead to rejection:
High Existing Debt: If the applicant's current financial obligations already consume 33% of their income, they are ineligible for further financing.
Unapproved Employer: Working for a small start-up or a private entity that is not accredited by the bank can be a barrier.
Contract Duration: For expatriates, the loan tenure cannot exceed the validity of their residence permit (Iqama) or their employment contract. If the remaining time on the contract is short, the loan may be denied or the term drastically reduced.
Bounced Checks or Defaults: Any record of unpaid financial commitments or legal claims regarding finance will halt the application process.
