Car Loan in UAE from Dealership or Bank - Know which car loan option is better for you from dealership and Bank. And also know the financing process of both with advantages and disadvantages.
Car loans in the UAE are a great way to purchase a car without having to pay the full amount upfront. They offer competitive rates of interest and flexible repayment terms.
Get Car loan at Lowest Interest Rate
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.
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 Car Loan||Flat: 1.99%, Reducing: 3.65%|
|ADIB Car Loan||Flat: 2.75% - 4.49%, Reducing: 4.75% - 8.25%|
|Emirates NBD Car Loan||Flat: 1.99%|
|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.
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.
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.
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.
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.
Ans: Car loans in UAE mostly come with maximum repayment tenure of 60 months or 5 years.
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.
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.