UAE: If I lose my job, will I face a travel ban over outstanding loan?

A KT reader asks what would become of his loan if he loses his job

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Ashish Mehta

Published: Sun 13 Aug 2023, 8:50 AM

Last updated: Sun 13 Aug 2023, 10:30 PM

Question: I have been told that I will be out of a job by the end of this month. I have some liabilities, including bank loans. Will I face a travel ban? If yes, how does it work as I won't have a job (and therefore, visa) by the end of this month?

Answer: Pursuant to your queries, it is assumed that you have availed a personal loan from a lender in the UAE. Therefore, the provisions of Notice No. 3692/2012 of Central Bank of the UAE pertaining to General Terms & Conditions and Loan Agreements texts drafted and approved by Emirates Bank Association; Federal Decree Law No. 14 of 2020 Amending Certain Provisions of Federal Law No. 18 of 1993 Concerning the Commercial Transaction Law and UAE Federal Decree Law no. 42 of 2022 on Civil Procedures Law are applicable.

In the UAE, a personal loan provided by a lender to a borrower may fall under the provisions of Personal Loan Agreements Formats Approved by the Central Bank of UAE. When a personal loan is granted to a borrower, a lender may collect a cheque as security against the limit of the personal loan.

If a borrower has availed a personal loan from a lender and failed to pay three consecutive monthly instalments towards repayments or six non-consecutive monthly instalments towards the repayment of the personal loan this may be considered as an event of default by a borrower. This is in accordance with Article 4(4) of the Personal Loan Agreement format of Loan Agreements Formats Approved by the Central Bank of UAE which states, “The loan elapses and all the instalments, interests and any other fees and expenses become due and payable immediately without having to give any notification or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law - in the event that the borrower failed to pay three consecutive instalments or six non-consecutive instalments of the monthly instalments without the approval of the bank.”

Therefore, in case of a default, a lender may choose to deposit the security cheque of a said borrower for collection (if any). If the said security cheque is dishonoured due to insufficiency of funds, a lender may file an execution case against a borrower along with a request to impose a travel ban in accordance with provisions of Federal Decree Law No. 14 of 2020. Based on the case filed by a lender, the court may approve the request and impose a travel ban on a borrower.

Alternatively, a lender may approach the relevant court which has jurisdiction if the outstanding debt is more than Dh10,000 and request the imposition of a travel ban on a borrower in accordance with provisions of Article 324 and Article 325 of the Civil Procedures Law. Additionally, a lender has the option of filing a payment order case or a civil case against a borrower in a court to recover the outstanding debt. If the final judgement is not in favour of a borrower, a lender may proceed to file execution proceedings against a borrower and that may include a request to impose a travel ban and issue an arrest warrant against a borrower.

Based on the aforementioned provisions of law, as you are expecting termination of your employment by your employer, it is recommended that you continue to pay your regular monthly repayment instalments even after losing your employment to avoid default on repayments with the lender.

In the event of default of payment of monthly instalments of personal loan, the lender, as mentioned above, may commence the legal proceedings against you.

Moreover, once you are terminated by your employer, based on the terms of the personal loan agreement you have with your lender, your end of service benefits amount paid to your bank account by your current employer may be utilised by your lender towards the outstanding personal loan debt. Therefore, you may also inform the lender about the possibility of termination of your employment and request the lender not to freeze your bank account on termination of your current employment and assure it that you will continue to pay the monthly repayment instalments promptly until you find a new employment in the UAE. You may also request the lender to restructure your existing personal loan.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: Readers may e-mail their questions to: or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.


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