Honda Car Loan

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Honda is certainly one of the most-sought car brands in the UAE and around the world, with the cars being renowned for their advanced designs and technological advancements. With Honda, you can choose from a wide range of excellent cars across various categories such as SUVs, minivans, sedans, and much more. Some of the popular Honda cars in the UAE include Honda City, Honda All-New HR-V, Honda Pilot, Honda Accord, and Honda Odyssey.

With numerous plans related to car loans in UAE, it is common to obtain car loans to complete the purchase. The same applies to Honda car loans, which are easy to obtain and have a simple application process. With a loan for Honda cars, you can easily purchase an ideal Honda car without much delay.

To find out how you can find the best Honda car loan, we will discuss all the essential features of the available plans in the UAE including their interest rates, leading car loan providers, features, benefits, the car loan application process, and more.

Features and Benefits of Honda Car Loan

The following section unravels the features and benefits of Honda car loans in UAE as offered by most providers and lenders – 

  • Long Repayment Tenure-The car loan repayment tenure in the UAE ranges from 1 to 5 years. With a long repayment tenure, you can easily repay the Honda car loan in low equal monthly instalments. This flexibility of loan tenure can help you manage your finances and customise your monthly budgets accordingly. In case you want to get done with the loan repayment soon, you can select a short loan tenure. Keep in mind that while the applicable interest will be low, the monthly instalments will be high in this case. 
  • Protect Your Savings-A remarkable benefit of obtaining a Honda car loan is that you can make the purchase without exhausting your savings or compromising your lifestyle and without much effort as well. This can be of great help - if you plan to buy a Honda car using your savings, you will be required to do tedious planning while facing the risk of being uncovered if any emergency arises.
  • Low Salary Required-The salary requirements for most Honda car loans in UAE are considerably low. This means that even individuals with low salaries can easily access the required funds and purchase their favourite car without any hassles.
  • Faster Processing and Documentation-If you meet the eligibility requirements and have a good credit Score, the provision of documents is minimal and the process is straightforward with most options offered in the UAE.  
  • No Collateral Required-Honda car loans do not require any collateral, with the car itself serving as collateral. This point is of the utmost importance - in case you fail to repay the monthly instalments on time, the bank can seize your vehicle and sell your car to recover the loan amount.
  • Easy Purchase-With several banks offering options to finance Honda cars in the UAE, you can quickly go ahead with the purchase of your chosen Honda car without worrying about paying the amount upfront.

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Documentation Required for Honda Car Loan

To obtain this car loan, it is vital to keep your documents ready and up to date. Note that the requirement of documents may differ from one lender to the other.

Some of the standard documents required to obtain this car loan are given below – 

  1. Original passport, visa, and Emirates ID as identity proof
  2. Salary slips, certificates, and bank statements as income proof
  3. Driving licence 
  4. Bills of utility services, statement of mortgage payments, and lease agreement as residence proof

To avail of a car loan for used Honda cars, the purchase agreement must contain the following information - 

  1. Make, Model, and Variant of vehicle
  2. Price of vehicle
  3. The number assigned to the vehicle, i.e., VIN
  4. For self-employed individuals, a trade licence of business, the last three months' bank statements, and power of attorney would be required. In the case of an LLC, a Partnership agreement, Memorandum of Association, and Article of Association will be required.

Interest Rates for Honda Car Loan in UAE

Before obtaining a Honda car loan, knowing whether the loan is within your budget is essential. One of the primary factors determining this is the interest rate, which depends on your loan provider as well as your profile. 

Discussed below are the various factors that can impact your Honda car loan interest rates – 

  1. Credit Score- A key factor in evaluating your creditworthiness is your credit score. High credit scores depict that you are a credible borrower, meaning that the probability of you defaulting on your loan is considerably low. Applicants with a high credit score are offered low interest rates compared to those with low credit scores.
  2. Income Source-Financial institutions also consider your income when deciding the interest on your Honda car loan. An individual with a high income poses a lower risk to the financial institution and, thus, may be offered lower interest rates. On the other hand, individuals with low income may have to pay a higher interest rate.
  3. Relationship with the Lender-If you have an existing account, loan, or credit card with the lender or have availed of any services with them in the past, you may be offered low interest rates on your car loan. The reason is that the bank would like to retain their existing credible customers whose financial records are on their file.
  4. Loan Repayment Tenure-Another factor affecting the applicable interest for a Honda car loan is the loan repayment tenure. The longer the loan repayment tenure, the higher the overall interest and vice-versa. Thus, if you want the interest rates for your car loan to be low, consider opting for a short loan repayment tenure.

Eligibility Criteria for Honda Car Loan in UAE

Both salaried and self-employed individuals may apply for a Honda car loan. However, the criteria for each option may vary. 

Check out the table below to find out the basic eligibility standards to qualify to obtain a Honda car loan in UAE – 

Parameter

Eligibility Criteria

Age Range

Between 21 and 65 years

Employment Requirement

Both salaried and self-employed

Minimum Salary

Starting as low as AED 5,000 with several banks (or around AED 8,000 for old cars)

Nationality

Citizen of the UAE or an expat living in the country

Credit Score

A high or very high credit score would be preferable 

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How to Apply for a Honda Car Loan?

With the enhancement of banking technology, you can now find various platforms to apply for a Honda car loan online. The best platform to do the same in the Emirates is Policybazaar UAE, where you can find multiple plans from different lenders in one place. You can compare them and select the best one per your budget and requirements.

A notable benefit of applying for a Honda car loan via policybazaar.ae is that you can get access to the best plans available in the UAE market at the best rates with enticing offers. Furthermore, Honda car loan plans are available at both fixed and reducing rates of interest, giving you ample options. To top it off, you can reach out to our customer care service team and get the required aid.

The ease of the application process is another benefit - you can apply for a car loan in just a few clicks with policybazaar.ae. Simply visit the 'car loan' section on the website and fill out the brief lead form with all the mentioned details. The details will include your full name, monthly salary, nationality, residence city, contact number, and email address. 

This will take you up to the quotes page, where you can find the best plans available in an easy-to-access list. You can make use of the 'filter' option available at the top of the quotes page and get the desired results. You can then examine them in detail and select one for yourself.

As an alternative, you can also head to the official website of the lender and get the required plan or even visit any of the branches of your preferred financial institution.

How to Calculate Monthly Instalments for Honda Car Loan?

Instead of undertaking the complex calculations yourself, it is advisable to use an online car loan calculator from the website of any of the top financial institutions and loan providers to get an estimate of the monthly instalment amount for your Honda car loan. 

The only aspect to note here is that the actual amount may vary from the estimated amount as the actual interest rates and other terms may differ due to the bank's terms & conditions and the borrower's profile.

Using a car loan calculator is a simple process. You can simply input the following details to get an estimated amount –

  1. Loan Amount
  2. Interest Rate
  3. Loan Duration

Based on your input, the calculator will show the applicable monthly instalments on your Honda car loan. However, some car loan calculators may also provide the break-up of the interest paid and the outstanding amount each month using graphs.

Honda Car Loan Repayment Options

You can repay your Honda car loan online, via mobile banking, or offline. We will discuss each method in detail in the next section – 

  • Online Banking-To repay your Honda car loan, you can head to the lender's official website and log into your account using the credentials. Once signed in, the details of your loan will appear. Locate the payment option on the page and use the suitable payment method to repay the loan.
  • Mobile Banking-To use the mobile banking feature, install the mobile application of your loan provider on your device. Locate the 'loan' section and get all the required information about your Honda car loan. Once you have all the details, choose the payment method and complete your monthly instalment payment.
  • Offline Banking-You can always visit the bank branch and settle the dues as an alternative to the above-stated methods. To get all the information related to offline banking, you should contact the concerned bank via call or visit a branch in person.

In addition, you can repay your Honda car loan via any of the following repayment options – 

  • Normal or Regular Monthly Instalments-The regular monthly instalment is the standard mode of repaying your Honda car loan. Here, the loan amount along with the applicable interest amount is divided into equal EMIs that have to be paid either at the start or end of each month.
  • Balloon EMI-Balloon EMI reduces the burden on the borrower at the initial stage of the loan as the balloon amount is to be paid at the end of the loan duration. The balloon amount is higher than the regular monthly instalments. However, the assessed interest rate on balloon payments is usually higher than the regular ones.
  • Special Tie-Up Method-This method is based on the concept of ‘excess’. Using the special tie-up method, you can repay the loan whenever you have more funds than a decided limit. Generally, the interest rates in this method are lower.
  • Step-Up EMI-If you are confident that your income will increase over time, the step-up EMI method can be a perfect choice. Here, the monthly instalments keep increasing with time.
  • Step-Down EMI-In contrast to the step-up EMI, the step-down EMI decreases the burden on the borrower with time. Initially, the borrower is required to pay high EMIs, with the instalment amount gradually decreasing as the instalments keep getting paid.

Advantages of Obtaining Honda Car Loans in UAE 

Discussed below are the key benefits of obtaining Honda car loans in UAE – 

  1. Improve Credit History: You can improve your credit score by paying all the monthly instalments of your Honda car loan on time. A good credit score will ensure that your future credit applications are approved quickly and at favourable terms.
  2. Budget Discipline: With EMIs, you can easily create a budget for proper financial planning. As you would be aware of how much you have to pay towards your monthly instalments, you can plan your budget wisely.
  3. Save Your Savings: By obtaining this car loan, you can save your savings by not paying the car amount upfront. This makes sure that your hard-earned money does not deplete with such a hefty expense.
  4. Additional Benefits: Some other benefits of a Honda car loan in UAE can include a free grace period, free registration, free loan deferment, 0% instalment plan, and so on. 

Charges and Fees Applicable on Honda Car Loan and Finance

Although most of the charges and fees applicable to Honda car loans are standard, slight variations could be observed from one lender to another. Check out the table below to find out the applicable fees for most Honda car finance plans - 

Early settlement fee

1.05% of the Principal outstanding amount

Late payment fee

AED 52.50

Change in the mode of payment

Free

Deferment 

AED 105

Partial Settlement 

1.05% of the payment made

Rescheduling fee

AED 262.5

Cheque returned charges

AED 105

Liability/No liability letter

AED 52.5

Application processing fee

1% of the loan amount applicable

Go through the list below to find out the prices for popular Honda cars in the UAE below* – 

Honda Car Model

Price in UAE

Honda HR-V 2022

From AED 88,400

Honda Accord 2022

From AED 98,500

Honda Civic 2022

From AED 124,900

Honda City 2022

From AED 61,400

Honda CR-V 2022

From AED 96,500

Honda Odyssey 2022

From 156,900

*Actual price may differ*

Top Banks Offering Honda Car Loans in the UAE

Some of the top lenders offering Honda car loans in the UAE are mentioned below – 

Emirates NBD

Product Name Interest Rate Repayment Tenure Loan Amount Additional Benefits

Auto cash loan

N/A

Up to 60 months

Up to 75% of the vehicle invoice value

Get preferential rates

Flexi drive 

Flat interest rate – starting from 1.92%

NA

NA

Transparent pricing linked to a one-month EIBOR

Auto loans

Flat interest rate - starting from 1.99%

Flexible tenure

NA

Free bank account and credit card

0% instalment payment plan on emirates nbd credit cards

Click here to Apply for this Emirates NBD Car Loan

Emirates Islamic Bank

Product Name

Interest Rate

Repayment Tenure

Loan Amount

Additional Benefits

Auto cash loan

N/A

Up to 60 months

Up to 75% of the vehicle invoice value

Get preferential rates

Click here to Apply for this Emirates Islamic Bank Car Loan

First Abu Dhabi Bank

Product Name

Interest Rate

Repayment Tenure

Loan Amount

Additional Benefits

Islamic car finance for expats

Flat rate -   starting from 2.49%

Reducing rate - starting from 4.72%

NA

Up to AED 1.5 million or 80% of the car's value

  • Available for both used and new cars
  • Up to 120 days grace period 
  • Valid for salaried individuals
Click here to Apply for FAB Car Loan

Abu Dhabi Commercial Bank

Product Name

Interest Rate

Repayment Tenure

Loan Amount

Additional Benefits

ADCB Car loan

Flat rate - starting from 1.99%

 

Reducing rate - starting from 3.65%

NA

Up to AED 1.5 million or 80% of the car's value

  • One-signature application
  • Simple documentation and quick approvals
  • Insurance finance option available
Click here to Apply for this ADCB Car Loan

RAKBANK

Product Name

Interest Rate

Repayment Tenure

Loan Amount

Additional Benefits

RAKBANK Car loans

Starting from 1.99% for salaried customers

Up to 60 months

NA

  • Available for both new and used cars
  • First instalment after 60 days
  • Direct 24-hour customer support
Click here to Apply for this RAKBANK Car Loan
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FAQS

Is any facility provided by any lending institution in UAE to pay off the Honda car loan early?

Yes, most car loan providers in the UAE allow you to settle the loan amount early. However, keep in mind that you would be required to pay the early settlement fee for the same.

How long can we finance a Honda car loan?

You can obtain a Honda car loan in UAE for a tenure of at least 1 year and at most 5 years in the UAE.

How can I calculate the monthly instalments on Honda car finance?

You can compute monthly instalments on a Honda car loan by locating car loan calculators available on the top lending institutions of the UAE. Just keep in mind that the actual amount may differ owing to different interest rates, loan amounts, and other conditions.

Is Honda car finance permitted in Islam?

As per Islamic finance laws, interest cannot be received or paid via any loan. However, you can always seek Shariah-compliant services to finance your car from lending institutions adhering to Shariah laws like Abu Dhabi Islamic Bank, Emirates Islamic Bank, and so forth. Shariah-compliant financial institutions charge profit instead of interest. 

Can I sell my Honda car with a loan in the UAE?

While you would be asked to settle the outstanding dues of your Honda car loan before selling your Honda car in most cases, you may find a few options to sell your car for which the loan has not been completely repaid. It is advisable to connect with your loan provider to know more about their terms and conditions for the same.

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