Compare and get the best loan
Compare and get the best loan
You don’t have to postpone or think twice before getting your hands on that snazzy, dreamy ride. With the concept of car loans in existence, getting a new car is possible way earlier and easier than it used to be. On top of that, the current market scope makes it a smarter choice to get you financed with a car loan instead of paying upfront. Today, almost all top banks are offering car loans in UAE and Dubai, with competitive car loan interest rates, flexible repayment periods along with several other benefits. In today’s day and time, Car finance in Dubai is a relatively easy and smooth task, given the fact that you are a well-informed buyer.
Here’s a list of benefits and attractive features of getting car loans in the UAE.
Low and Negotiable Interest Rates: Car loan interest rates in UAE are rather low starting at 2%. Most banks offer both fixed and reducing car loan interest rates allowing customers have more repayment choices.
Easy Processing: Your auto loan in UAE gets processed very quickly, courtesy flexible operations of top banks in the UAE. This simply means that you will not have to spend hours and days getting approvals, realigning or reassigning formalities for the purchase of your new car.
Low Minimum Salary Requirements: Depending on the bank you choose, the minimum salary required to get a car loan in UAE could be as low as AED 5000, making it possible for all working individuals to have a private vehicle.
Easy Way to Buy a Car: Getting a car financed in Dubai is one of the easiest ways to own a car. You can choose a simple, low-interest monthly repayment and become a car owner almost instantly. Car finance in Dubai eliminates months and sometimes years of gap between starting to save up for buying the car and finally being able to do so.
Flexible Repayment Tenure: All top banks in UAE offer flexible car loans repayment options. Customers can plan their repayment strategy and choose the EMI tenure and amount in the way that suits them the best.
Financing Used Cars: Car loans in UAE can also be used to get old and used cars in Dubai. Most banks in UAE offer financing for used cars at a slightly higher interest rate. The banks determine the maximum age and condition of the vehicle through an inspection.
100% Financing: While the more popular concept of car finance in Dubai is going 80-20 on financing and down payment respectively. There are many banks that offer 100% financing options for an auto loan in the UAE.
Improves Credit Score: Taking a car loan in Dubai and paying it off as per the EMI of your plan will substantially improve your credit score, ensuring better opportunities and reputation with the banks.
Good Credit History: Car loans in the UAE are one of the best ways to build your credit history. This ensures that your future loans applications with the bank will be smoother and easier to get approved.
Following are the top car loan providers in UAE with their respective interest rates, along with highlights of the loan they offer:
|Banks||Interest Rate (p.a.)|
|ADCB Bank Car Loan||Flat: 1.99%, Reducing: 3.65%|
|ADIB Bank Car Loan||Flat: 2.75% - 4.49%, Reducing: 4.75% - 8.25%|
|Emirates NBD Car Loan||Flat: 1.99%|
|First Abu Dhabi Bank (FAB) Car Loan||Flat: 1.99% - 2.99%, Reducing: 2.80% -5.62%|
|Mashreq Bank Car Loan||Flat: 3.45%, Reducing: 6.31%|
|RAKBANK Car Loan||Flat: 1.99%|
|Emirates Islamic Bank Car Loan||Flat: 1.18%|
A car loan EMI calculator is the simplest way to ascertain the amount to be repaid to the bank every month based on your loan amount, interest rate and car loan tenure. Using a car loan calculator is very simple. All you need to do is fill out the details and click the “calculate” button at the bottom of the auto loan calculator. The car loan calculator in UAE requires you to enter the principal amount, interest rate and the number of months in the tenure of the loan in the designated slots to compute and present the EMI break up for your car loan. Most EMI calculator will also show the amortization schedule of the loan where you will find the total amount and interest to be paid during the tenure written separately from the principal amount.
The formula used in the process of EMI calculation by EMI calculators is [P x R x (1+R)^N]/[(1+R)^N-1] where,
P = Principal amount
R = Rate of Interest
N = Number of Months in the Loan Tenure
Comparison is the key to choosing well. The best way to compare car loans offered by different banks and providers is by visiting a trusted banking services aggregator website like Policybazaar.ae. We have in handy a combined collection of all the data you need to decide on the right car loan provider for your upcoming purchase. We also have comparison tools to help compare two or more providers of your liking.
Consider looking for the following when comparing car loan providers
The world has grown into a digital playground for all kinds of banking products and services. Here are a few simple ways that you can use to apply for a car loan in UAE:
Applying for a car loan online is the simplest. Most banks have a link to the application portal or an application form on the car loan page. All you need to do is simply fill in the required details and submit your application. The bank will reach out to you to discuss the term of the loan and take the process further. You can also apply for a car loan in UAE via Policybazaar.ae.
The traditional way to apply for a car loan in UAE, for an offline application, you will need to visit the nearest branch of the bank and discuss the terms of the car loan. Once decided, you can obtain an application form from the branch itself. Fill the form out, attach the required documents and submit the application to the bank for processing. Make sure you double-check with the bank for all the documents required for the application.
Just like any other loan, applying for a car loan would require a set of documents. Following is a check-list to help you through the documentation process:
Some banks may also require additional documents as per their policies, such as the dealer’s quotation of the new car, the dealer’s evaluation of a used car, etc. Confirm with the bank that you are getting your car financed from about the documents required.
Q1: What does a credit report mean?
Ans: This is a report that represents the credit history of an individual. It is generally prepared by a credit bureau.
Q2: What does default mean in car loans terminology?
Ans: Default is when the borrower fails to pay the lender (bank) back for the loan that they took, hence violating the car loan contract.
Q3: What does DBR mean?
Ans: DBR stands for Debt Burden Ratio. This is the ratio that helps the banks decide how much money they should lend an individual so that they can pay it back with ease. DBR can be calculated by dividing the monthly payment amount of the loan (EMI) by the monthly salary of the individual.
Q4: What is reducing car loan interest rate?
Ans: Reducing interest rate is calculated on the remaining due or outstanding amount of the car loan after repayment of a certain amount. This means that each instalment will be calculated as = outstanding amount (after the repayments in previous EMIs) x interest rate.
Q5: What is credit insurance?
Ans: Credit insurance is an insurance plan that helps pay off the policyholder’s debts in case of death and/or disabilities.
Q6: Is early payment available on an auto loan in UAE?
Ans: Yes, most banks allow early payments or prepayments on car loans but only after the initial 12 EMIs have been paid already. The condition may differ from bank to bank.
Q7: How much car loan can I take from the bank?
Ans: Almost all car loan providers in the UAE have an upper limit on the maximum amount they can lend to an individual. However, the final amount is generally decided on the car financing percentage (80% in most cases) and the DBR of the individual.
Q8: What is the maximum amount of time that I have to repay the car loan in the UAE?
Ans: Car loans in UAE mostly come with maximum repayment tenure of 60 months or 5 years.
Q9: Can I buy a car using a personal loan? Are there any disadvantages of doing so? Which is a better choice to buy a car?
Ans: You can buy a car using a personal loan, but there are several disadvantages that you may face. Personal loans generally have higher car loan interest rates than car loans, so you will end up paying a lot more than you could have if you had taken a car loan instead.
The only advantage here is that you do not have to give a down payment with personal loans. However, several car loan providers offer 100% financing for cars as well. So, it is a smarter choice to buy a car using a car loan.
Q10: Can I get a car loan if the car is registered under the name of my spouse?
Ans: Yes, many banks allow you to take out a car loan in this situation. However, it completely depends on the policies of the individual bank and additional terms and conditions may also apply.