HSBC Car Loan Interest Rates in UAE

HSBC car loans in UAE are all about effectively helping you achieve your dreams of owning a vehicle without burdening your savings. Offering high loan amounts for a comfortable tenure of up to 60 months, HSBC car loans are ideal for both new and used car financing. Moreover, customers can also expect to secure discounted interest rates with HSBC green auto loans. 

Let’s find out more about the types of HSBC car loan interest rates offered in the UAE, the factors that can influence them, and how you can use them to your advantage. 

Types of HSBC Car Loan Interest Rates:

• Flat Rate of Interest: Flat interest rates keep your interest amount the same throughout the tenure of the loan. The flat rates of interest are applied to the total loan amount to calculate interest, which is added to the loan amount - the resulting sum is then divided into equal monthly instalments for the loan. Flat rates of interest are suitable for customers who wish to pay off their loans steadily by utilising the complete tenure of the plan. 
• Reducing Rate of Interest: Reducing rate of interest is calculated on the remaining due balance of your auto loan. As the name suggests, your interest amount keeps getting reduced over time with a reducing rate of interest since you keep repaying the loan bit-by-bit. You can save considerably on interest if you pay off a few instalments ahead of time. Reducing interest rates are suitable for people who plan to settle their loan early. 

Key Features of HSBC Car Loan

Factors That Impact HSBC Car Loan Interest Rates

Several factors can influence your HSBC car loan interest rates, with some of them unique to HSBC Bank while the other ones being common across all providers. Given below is a list of these factors to help you under the variations that you may witness with respect to your HSBC car loan interest rates:

• Customer Segments: HSBC car loan interest rates are offered as per the segments that their customers belong to. For instance, the lowest available HSBC car loan interest rates can be scored by their Premier segment customers. Variability is introduced as the segment of the customer changes. Existing customers having a good relationship with the bank can also expect to get a lower car loan interest rate. A key aspect to consider here is that while segments make a visible impact on the interest rates, the variations are rather slight in nature. 
• Type of Vehicle: HSBC offers special interest rates to finance environment-friendly vehicles, i.e., electric cars. Fully electric cars can be financed at a discount of 0,25% on the final flat interest rate approved by the bank, while hybrid cars can score up to a 0.15% discount. Tesla financing, on the other hand, is available at special interest rates starting at 1.84% only. Further variations can be expected in the final interest rates based on your customer profile and risk profile. 
• Debt-to-Income Ratio: The ratio of your monthly disposable income and the monthly instalment amount for loan repayment is termed as debt-to-income ratio. A lower debt-to-income ratio represents that your income is considerably higher than the loan amount payable, which showcases you as a borrower with high repayment capabilities. Lower debt-to-income ratios, preferably between 10% to 30%, are preferred by banks and may even provide you with the opportunity to secure low HSBC car loan interest rates. Higher debt-to-income ratios, however, significantly increase the interest rates due to the borrowers’ low repayment capabilities. 
• credit score: You can get car loans in the UAE even if your credit score is somewhere in the low or very low category. However, having a low credit score spikes up the HSBC interest rate for your loan. A credit score is one of the most influential factors regarding HSBC car loan interest rates. The same also applies to your credit history, which is a key factor in the determination of your credit score. Missing bill payments, defaulting on credit card bills, and so forth can lead to low credibility, which increases interest rates for any credit tool that you apply for. 
• Employment History: Holding a stable job is essential as far as credit tools like car loans are concerned. Banks also tend to prefer jobs that are more secure and high paying compared to temporary or unstable jobs. Applicants with stable high-paying jobs may score lower HSBC car loan interest rates easily. 
• Car Model & Variant: The model and variant of your car is another factor that makes a difference here. Some models are more popular than others among buyers, hence fetching better resale prices. Such cars generally get better car finance interest rates from the banks as vehicles act as collateral in car loans. Hence, banks promote car financing for vehicles with high resale prices by providing lower interest rates. 
• Co-Borrowers: Co-borrowers can reduce the repayment burden of the primary borrower by improving the repayment capabilities. This results in lowered HSBC car loan interest rates as well. The stronger repayment capabilities your co-borrower has, the lower HSBC car loan interest rates you can score. 
• Loan Tenure: Longer repayment tenures for car loans tend to attract slightly higher interest rates as the money that the bank has lent will come back in full after a longer duration. Consequently, shorter repayment tenures may come with a slightly lower interest rate. The difference brought due to the tenure, however, is not as significant as that caused by other factors like credit score and debt-to-income ratio introduce. 
• Condition of the Car: HSBC car loan in UAE is available for both new and used cars, although the HSBC car loan interest rates may change based on the condition of the car, i.e., new or used. Used cars generally get a higher interest rate for auto financing, with the starting flat rate for used cars also being higher than for new cars. Further changes may occur depending on the condition of your used car. 

Other Banks Car Loan Interest Rates in UAE

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