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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Whether you buy a car or a two-wheeler, your commute is significantly simplified which makes it convenient for you to travel to different places. When you have your personal vehicle, you can easily take a road trip on long weekends with your family and loved ones or utilise it for your daily office commute. At the same time, though convenient, buying a vehicle involves a considerable amount of money.
Even if you have the required funds at your disposal, self-financing can put a dent on your savings. The best solution in such cases is an auto loan in the UAE, with RAKBANK Car Loan being among the most popular plans in the country.
When it comes to auto loans, RAKBANK is among the leading lenders in the UAE. RAKBANK offers attractive loans for buying vehicles with affordable interest rates and flexible repayment options. Let’s explore RAKBANK RAK Auto Loan in detail with more features, benefits, eligibility criteria, and other relevant details.
RAKBANK RAK Auto Loan
To begin with, here are some of the salient features of the auto loans offered by RAK BANK –
Besides supplying you with the requisite funds to buy a vehicle, RAKBANK Auto Loans have several other benefits that can prove beneficial for your purchasing experience such as:
With interest rates starting at 1.79% and going up to 3.65%, RAKBANK ensures that users can repay the loan with affordable interest.
The levied interest for RAK auto loans differs as per the borrower. However, the generally prescribed rates are as follows –
Minimum Salary Required |
Loans for Few Vehicles |
Loans for Used Vehicles |
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AED 5,000 per month |
A flat rate of 1.79% to 3.49% per annum |
A flat rate of 2.30% to 3.69% per annum |
Type of Business |
Loans for New Vehicles |
Loans for Used Vehicles |
---|---|---|
Businesses excluding rent-a-car |
A flat rate from 3.45% to 4.49% per annum |
A flat rate between 3.65% and 4.75% per annum |
Businesses for renting a car |
A flat rate of 3.50% per annum |
Not applicable |
Loans for new vehicles |
Loans for used vehicles |
|
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Rates depending on the average account balance |
A flat rate between 2.40% and 3.24% per annum |
A flat rate from 2.99% to 4.19% per annum |
Besides the interest rates, borrowers would have to bear other specified charges related to the loan as follows:
Type of Charge |
Amount Payable |
---|---|
Loan processing fee |
|
Late payment charges |
AED 500 per instalment delay |
Charges for issuing liability or no liability certificate |
For individual customers – AED 60 per certificate For business entities – AED 250 per certificate |
Early settlement charges for full settlement |
For individual customers – 1% of the outstanding loan amount For business entities – 5% of the outstanding loan amount |
Early settlement charges for partial settlement |
For individual customers – 1% of the prepaid amount For business entities – 5% of the prepaid amount |
Charges for cheque presented through collection |
Free for individual customers AED 55 for business entities |
Cheque return charges |
AED 100 for individual customers AED 200 for business entities |
Security cheque return when the loan matures |
For individual customers – free For business entities – AED 100 |
Instalment deferment request charges |
For individual customers – AED 100 per request For business entities – AED 200 per request |
Charges for changing post-dated cheques |
For individual customers – free For business entities – AED 200 per instance |
Charges for changing the number plate, colour, registration or ownership of the vehicle (also includes a refundable security deposit amount that starts from AED 1,000 and goes up to the outstanding loan amount) |
Free for individual customers AED 200 for business entities |
Charges for release letter (with a validity of 45 days) |
Free for individual customers For business entities – AED 50 |
Charges for a duplicate release letter |
Free for individual customers AED 200 for business entities |
Charges for a temporary release letter |
For individual customers – free For business entities – AED 200 |
Loan cancellation fees |
For individual customers – AED 100 For business entities – AED 1,000 |
Rescheduling fees |
For individual customers – AED 250 For business entities – up to 1% of the outstanding loan amount subject to a maximum of AED 500 per car |
Case release charges |
Not applicable for individual customers AED 525 for business entities |
Vehicle repossession release charges |
For individual customers – not applicable For business entities – AED 1000 |
Post-approval amendment request charges |
For individual customers – free For business entities – AED 100 |
To avail of the RAKBANK Car Loan, here are the eligibility parameters that you would have to fulfil:
To provide you with the loan, the bank will request a set of required documents for assessment and verification of your mentioned details. Depending on the type of borrower, these documents are listed as follows –
If You Are A Salaried Borrower |
If You Are A Self-Employed Borrower |
If You Are A Business Entity |
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To apply for a car loan from RAKBANK, here are the options that you can go with:
Whichever mode you select, you will be contacted by the bank to take up the next steps once your application is assessed and verified by it.
Having an estimated idea of the monthly installment you will be paying helps you make better comparisons and an informed choice. While you can always go for the tedious manual calculations, you can also search for the RAKBANK online loan calculator that will help you calculate the installment payment to repay the loan.
To calculate the approximate installment amount with a RAKBANK online loan calculator, all you need to do is enter the following details like
Click on ‘Calculate’ and you would be able to find out the installment amount payable. Notably, as with this interactive calculator, you can adjust one or more input values and find the installment for the same.
When availing of an auto loan from RAKBANK, here are a few essential aspects that you should keep in mind –
Yes, RAKBANK allows you a cooling-off period of 5 days from the date of signing the loan application. During this period, you can cancel the loan. However, if you do it afterwards, a fee would be levied.
Yes, RAKBANK can change the interest rates on the auto loan. However, the bank would send you a notice intimating the same 30 days in advance.
The loan is issued in AED, i.e., Emirati Dirham.
Yes, you can register your vehicle in any Emirate of the UAE. However, such a registration should be approved by the bank as well as the traffic department of the UAE.
Yes, you would have to buy a comprehensive insurance cover for the vehicle. The minimum coverage should be equal to the loan amount, with the tenure being of 13 months.