Many of my friends and people around me do not really understand how and what are the limits on loans and credit cards in Kuwait. So i’ll explain a bunch of starters stuff that may help you out. Lets say for example that your salary is 600kd, forget about social insurance and social allowance if your Kuwaiti and working in the private sector, if you are and want to add, just include them above your salary (so in my case its 600 plus 240) okay back to the 600kd, to get any kind of instalments like a TV from Alghanim or a consumer loan, what you have to know is that all your instalments together should not pass 50% of your salary. So the max i can get from installments is 300kd half of the 600kd, and another thing, all your total loans should not pass the 70,000kd mark. Thats a Central Bank of Kuwait law. Even your credit cards are included, so if i had a limit of 1000kd and the max percentage that the banks can take in what is called a revolving charge is 8% (meaning on instalments) so in my case here 300kd minus 80kd (8% mutiplyed by 1000kd) which totals to 220kd available for other installments. So lets say i had no previous installments and went into a local bank to get a credit card, my total limit on my C/C must not go over 3700kd, why because 8% mutiplyed by 3700 equals to 296, thats 4 kd away from half of my salary, maybe i sould by a phone with the rest,make a 4kd installment:P You see this law was made due to the excessive amounts that Kuwaitis are taking in loans, once in 1999 i had a customer with a 1200kd salary and when his salary was deposited he only had 20kd in his account!! i’m not kidding he even told me ”what shall i have for dinner today FALAFEL!!”:P Loans in Kuwait are very easy to get, some banks can release a loan in 30 minutes, so we as consumers should be aware of such actions, and undersatnd what is the benefit of a loan or Sony HDTV 52 inch i would love to buy that i could hook up to a Nintendo Wii:P j/k what i have explained above goes for expats too, please let me know if such posts are beneficial to you so i can explain more? I guess the guy who had falafel for dinner that day should read the guide below:P (pic taken from blog.kazumakzak.com)
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June 5th, 2007 at 2:03 am
Wii + HDTV + beanies
(hint hint)
June 5th, 2007 at 8:29 am
k u w a i t oo n s . c o m: with everthing i said the only thing you commented about is the TV & Wii:P
June 5th, 2007 at 9:40 am
yeah man that would be so beneficial
couches + wii + HDTV
June 5th, 2007 at 10:10 am
k u w a i t o o n s . c o m: why do i get the feeling thats its only me and you in the blog, man buzz off:P
June 5th, 2007 at 11:12 am
This explanation is quite helpful for a lot of people I know.. who just go about and buy stuff on loan and talk about only the minimum payment….I think .. you should put up such useful financial helps/hints in the future… at least that way.. if people who don get to see your blog atleast they will pass on this info…good going…
June 5th, 2007 at 1:17 pm
lolol and a faster connection.
Its only you and him beacuse the subject is boring
June 5th, 2007 at 2:06 pm
great explanation.
i think people just dont get how damaging debt can be, especially debt for luxuries.
what i think might be helpfull if youre going to do more writing on this loan stuff is to explain exactly what is charged, how the credit card companies make money by you not paying, or paying over a long time, and how the interest rate affects peoples payments.
i was astounded when two accountants i know were discussing a loan package for a car thinking they got a pretty good deal, when the interest was so high that they would wind up paying double for the car. accountants!
they thought it was a good deal cos their monthly payments were low.
if accountants dont understand the dangers of compounding then there really is no hope for anyone
June 5th, 2007 at 3:52 pm
It’s a really good thing to LIKE felafel!
Skunk and I share a philosophy – live below your means and pay cash as often as possible. Those interest payments is just GIVING your money to the bank! Aaaarrrgh!
June 6th, 2007 at 1:13 am
q8xpat: yah i guess so thanks, will surely post more
Amricano: lol got ya:P
skunk: will do, but some post with more numbers require more explaining but will take some time,thanks
Intlxpatr: lol
June 7th, 2007 at 5:48 pm
good post man…i work in a bank and with this new law regarding the I/I RATIO
June 7th, 2007 at 7:32 pm
MAZE: thanks, whats the I/I Ratio?
June 8th, 2007 at 1:20 am
Instalment to Income thats what its known in the banking sector
June 8th, 2007 at 2:31 am
MAZE: yah okay thanks