Living in the emirates and owning your dream car is not difficult anymore. Even if you cannot afford to pay for your desired vehicle in one go, you can still manage to purchase it. Several banks in the UAE offer easy auto loans. If you know the details of choosing the right sponsor, you can wisely buy your dream car.
Here are the details, important information, and some technicalities you need to know before applying for a car loan in UAE.
Have a look at it!
You can avail of car loans if you fit the following criteria.
- Age: If you are more than 21 years and less than 65 years of age, you are eligible to get a car loan.
- Driver’s license: If you are a UAE national, you should have a driver’s license before getting a car loan. If you are an immigrant living in the emirates, you should either have a driving license in UAE or a license issued by your hometown valid in UAE.
- Salary: Bank offers flexible loan plans according to your salary.
UAE offers less interest rates on auto loans as compared to other countries. Mostly the interest rate lies between 2% to 4% in UAE. Two types of interest apply to auto loans in the UAE.
- Reducing rate: This interest rate is calculated on the remaining loan every time you pay it back.
- Flat rate: Flat rate remains the same throughout the payback time. This rate is calculated on the borrowed sum.
A flat interest rate is more reasonable than a reduced rate. Make sure to decide the type of interest rate that suits you before taking a loan.
The banks do not offer a 100% loan on your vehicles. They offer up to 80% of the total amount. The rest of the 20% is to be paid by the buyer. It is called a down payment. You should have the down payment in your account before applying for a car loan. Moreover, you cannot get a car loan for any car. Your car should cost at least more than AED 25000. You can get a loan for a brand new as well as a used car.
There is a fixed time in which you must return the loan along with the interest to the bank. Most banks give a time of 5 to 6 years to return the amount with an interest rate. Now you must decide on a payment period, once you agree with the interest rate, and return time.
The short monthly payment will let you pay every month. Long payments will incur more interest rates. So, choose wisely what suits you the best.
You have read the information about all the important terms. Now let us move to the required set of documents for getting a car loan in UAE.
- Your Emirates ID should be with you.
- You should have a driver’s license.
- Your passport is a must-have item.
- Car registration documents are also required.
- Your salary certificate and bank statement for the last 3 to 6 months should be with you.
- Labour card is also needed for the record.
- Vehicle valuation certificate should be taken along.
- Lastly, insurance policy documents must be with you.
Procedure to get a car loan
Let’s get straight to the procedure once you have gathered your essential documents.
- Fill out the car loan application form and attach the required documents.
- Also attach the dealer’s quotation with the application form.
- Bank will send a Local Purchase Order after verifying your documents.
- Then it’s time for the down payment and final formalities with the dealer.
- And that’s it. You can take the car home.
If you are still confused about getting a car loan, remind yourself of the benefits it provides.
- Taking car loans in UAE is quite reasonable.
- They offer very small interest rates.
- The procedure is simple and easy.
- Once you pay the loan it adds to your credibility, you can get other loans faster.
Your dream car can be yours if you wisely choose to get a car loan. Most of the dealers in UAE have their terms with bank representatives. They can easily guide you about the range of car loans a particular bank provides. It is quite easy to get a car loan in UAE if you are eligible and have the necessary documents.
Don’t forget to consider the interest rate before taking a car loan. Hope this article guided you well in what you were looking for.