Abu Dhabi Islamic Bank car loans are among the most eminent Islamic car loan products in the UAE. The bank provides high loan amounts with multiple finance options for new as well as used vehicles, all while offering features like payment deferment, the grace period for the first monthly payment, and so on. Besides there, the competitive interest rates of ADIB car loans make them highly popular among potential borrowers in the UAE.
This piece will cover all important aspects of ADIB car loan interest rates and the factors that can impact them when you apply for such a loan. Let’s begin by discussing some key aspects related to interest rates first.
Types of ADIB Car Loan Interest Rates
Flat Rate of Interest: Flat rates of interest are charged on the initial car loan amount. Here, the equal monthly payments stay the same throughout the tenure, and so does the interest amount. Flat ADIB car loan interest rates begin from 1.99% and go up to 4.49% as per the profile of the applicant.
Reducing Rate of Interest: Reducing rate of interest is calculated on the remaining due balance of your loan amount. This leads to lower interest rates as you keep paying your loan amount, hence the lower monthly payment amount. Reducing rate works the best if you plan to settle your ADIB car loan early.
Interest Rates with and without Salary Transfer: ADIB also offer different car loan interest rates for customers who transfer their salary to Abu Dhabi Islamic Bank. Applicants can get lower ADIB car loan interest rates if they transfer their salary to an ADIB account.
The flat rate of interest for ADIB car loans with salary transfers starts at 4.75%, while the rates begin at 5.25% for non-salary transfer cases.
ADIB Car Loan Interest Rates in the UAE
Types of ADIB Car Loan Interest Rates
Starting Rate of Interest
1.99% per annum
Flat Rate of Interest with Salary Transfer
2.75% - 4.49% per annum
Reducing Rate of Interest with Salary Transfer
4.75% - 8.25%
Flat Rate of Interest without Salary Transfer
2.99% - 4.49% per annum
Reducing Rate of Interest without Salary Transfer
5.25% - 8.25%
Features of ADIB Car Loans in UAE
Maximum Loan Amount
AED 1 million
Maximum Loan Tenure
Maximum Finance Ratio
80% of the Car’s Value
Salaried applicants only
ADIB motor Takaful on low contribution value
90-day-long grace period for the first monthly payment
One deferment per year for instalments
Factors Affecting ADIB Car Loan Interest Rates
Several aspects related to your profile as a borrower can increase or decrease your car loan interest rates. Given below are some key factors that can influence your ADIB car loan interest rates:
Debt-to-Income Ratio: Your debt-to-income ratio determines how much loan amount you can take and pay off comfortably without defaulting payments. A lower debt-to-income ratio is aimed when credit tools are concerned. Having a higher debt-to-income ratio generally leads to higher car loan interest rates since your potential to comfortably pay off the loan is lowered with a high ratio. A 15%-30% debt-to-income ratio is considered to be a healthy one.
credit score and History: Your credit history plays a crucial role in deciding the interest rate for your credit tools like car loans. Having a bad credit history or credit score will lead you straight to high ADIB car loan interest rates. This is due to the fact that your credit score represents your creditworthiness. Thus, if you are not a creditworthy person, you are at higher risk of defaulting on loan payments, which leads to higher ADIB car loan interest rates.
Income and Employment History: Your income level can impact both the car loan interest rate and the car loan amount. Higher income leads to lower interest rates as it lowers the debt-to-income ratio. Thus, high-income borrowers are less likely to default on loan payments and generally get higher loan amounts at better terms. Your employment history also makes a difference regarding the ADIB car loan interest rate. If you have held regular jobs during your career with positive reviews from your employers, you will be considered an ideal candidate by the bank. On the other, patchy employment history with terminations due to performance issues will lead to higher interest rates.
Co-Borrowers: Having a co-borrower for your ADIB car loan can be fruitful with respect to a low interest rate. As co-borrowers for loans share your repayment liability, the risk is reduced from the bank’s perspective. Consequently, banks may offer lower interest rates for their loan products in such cases. Moreover, the presence of co-borrowers can also decrease the debt-to-income ratio, making for an even lower ADIB car loan interest rate option.
Loan Tenure: Longer loan tenures generally lead to slightly higher interest rates - the longer the loan tenure is, the higher the payment default risk for the bank. To balance the increased risk factor, banks may charge higher interest rates for car loans in UAE. However, loan tenure does not impact your ADIB car loan interest rates substantially and can be considered a secondary factor here.
Car to be Financed: The model, condition, and value of your car have a massive impact on your car loan interest rate in the UAE. This is because the car which is financed also acts as collateral for the loan in car loans. Less popular models may attract higher interest rates as they will have a lower resale value. Apart from that, sports cars and luxury vehicles may also get higher interest rates as their value depreciates very quickly.
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