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.
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A car loan can be a significant financial burden when you keep repaying the monthly instalments for a long period of time. However, you can move your ongoing car loan to your credit card and free yourself from this burden. It is important to keep some points in mind before doing so. Willing borrowers should take the help of a car loan EMI calculator to know their monthly obligations before applying for this credit facility.
The financial institution which lends the funds to purchase a car decides whether you, as a borrower, can pay off the loan using a credit card or not. Some lenders might accept this proposal without obligation, while others might charge a hefty processing fee. In such a case, you should always evaluate whether repaying the car loan using a credit card is worth the fees.
In this regard, you can use the 0% APR credit card to avoid the limitations mentioned above. These credit cards have a limited period of zero percent interest. This allows you, as a user, to repay the loan without accruing any interest. If you have this credit card, then you can shift your loan to your credit card through a balance transfer facility. This balance transfer facility allows you to repay the loan amount without hassle if you consistently stick to the repayment plan.
Further, you can also pay for a car loan in UAE using the cash advance feature on a credit card. However, you should keep in mind that a cash advance attracts high-interest rates and additional charges. So, a cash advance is probably not the best decision if you are already struggling to pay off the loan.
Technically, you can make a car loan payment with a credit card in one way or another. However, there are certain pros and cons associated with this method.
Here are some of the beneficial aspects of repaying a car loan using a credit card:
Some of the cons associated with paying off a car loan using a credit card are as follows:
Opting for a new loan to repay an ongoing credit is always considered a risky decision. In order to make it work, you must repay the credit amount prudently and with utmost responsibility. Hence, you should assess your financial capabilities before making a car loan payment with a credit card. This will help you plan your finances and save you from credit defaults and associated financial burdens.