RAKBANK RAK Auto Loan

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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

  • Minimum Salary AED 5,000
  • Flat Rate 2.35%
  • Reducing Rate 3.79%
  • No Salary Transfer

Features of RAKBANK RAK Auto Loan

To begin with, here are some of the salient features of the auto loans offered by RAK BANK –

  • The interest rates start from 1.79% for salaried borrowers and 2.40% for self-employed ones, with the maximum interest rate going up to 3.65%
  • Salaried customers are not required to opt for salary transfer to get the loan
  • The repayment tenure goes up to 60 months
  • You can avail of the loan for different types of vehicles (both personal and commercial ones)
  • There are different offers if you avail of the loan in the month of Ramadan

Benefits of RAKBANK RAK Auto Loan

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:

  • Multipurpose loan - The loan offered by RAKBANK is multipurpose in nature. You can utilise the funds to buy -
    • New and used cars
    • Luxury cars
    • Sports cars
    • Bus, trucks, pickups, and other types of light commercial vehicles
    • Motorbikes
    • Affordable interest rates

With interest rates starting at 1.79% and going up to 3.65%, RAKBANK ensures that users can repay the loan with affordable interest.

  • Flexible repayments - The RAKBANK car loan allows easy monthly repayments by providing a repayment tenure of up to 60 months. Moreover, the installments can start from 30 to 60 days after availing of the loan as per the agreed-upon term. This extended moratorium period allows you to manage your finances so that you are prepared when the loan repayment begins.
  • Attractive offers - With RAKBANK, borrowers get periodic offers so that they can avail of the loan at attractive interest rates and/or low charges. Furthermore, for loans availed during Ramadan, there are several additional offers for borrowers. These offers can reduce interest costs, processing fees, and more.
  • Wide scope of loan - You can avail of the loan not only to finance the vehicle but also to pay for the cost of insurance, service and maintenance contracts, rustproofing the vehicle, and so on.
  • 24/7 assistance  - In the case of any grievance or query, customers can contact RAKBANK at any time as the bank offers dedicated 24/7 customer assistance for catering to the needs of its customers. 
  • Ease of obtaining the loan - With RAKBANK’s auto loan, you can get the funds without any hassles as the bank allows online applications and sanctions with minimal paperwork. 

Interest Rates for RAK Auto Loans

The levied interest for RAK auto loans differs as per the borrower. However, the generally prescribed rates are as follows –

  • For salaried employees

Minimum Salary Required

Loans for Few Vehicles

Loans for Used Vehicles

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

  • For business entities

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

  • For self-employed individuals 
 

Loans for new vehicles

Loans for used vehicles 

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

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Other Charges Associated with RAKBANK RAK Auto Loans

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

  • For individual customers – 1% of the disbursed loan amount (minimum AED 500 and maximum AED 2,500)
  • For business entities – 1.5% of the loan amount payable when the loan is disbursed (lower limit of AED 500 and the maximum limit of AED 7,500)

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

Eligibility Criteria for RAK Auto loans

To avail of the RAKBANK Car Loan, here are the eligibility parameters that you would have to fulfil:

  • Type of eligible borrowers - The loan can be availed by salaried, self-employed, or pensioner individuals, UAE nationals, GCC nationals, and expatriates. Even business entities having the business running for the last 2 years or more can also apply for the loan. The crucial aspect here, however, is that all such individuals and companies have diverse document requirements for them as per the bank, which they should be able to produce at the time of application.
  • Income  - Salaried individuals should have a minimum gross monthly salary of AED 5,000.
  • Down Payment - As an applicant, you would have to make a 20% down payment on the cost of the vehicle while the loan would finance the remaining 80%. You will be considered eligible for the loan only if you are capable of arranging the down payment funds.
  • Age limit - You should be aged at least 18.5 years for registration and 20.5 years for paying by cheque. The maximum age limit, on the other hand, is 65 years if you are a UAE national and 60 years if you are an expatriate.
  • Credit score - A high credit score, usually 700 or higher, is needed to apply for the loan and get it sanctioned. 

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Documents Needed for RAK Auto Loans

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

  • An original Emirates ID (and a copy) 
  • Bank account statements for the last 3 to 6 months
  • A valid driving license issued by the RTA UAE
  • A valid passport along with a copy
  • A salary certificate issued by the employer in the name of the bank (not needed if you have an existing RAKBANK account)
  • Rent agreement or the latest utility bills as address proof 
  • The proforma invoice of the car or the dealer’s quotation mentioning the ex-showroom and on-road price of the car
  • An original Emirates ID along with a copy
  • Bank account statements for the last 3 to 6 months (the statements should be for both the individual and the business)
  • A valid trade license issued by the DED (Department of Economic Development)
  • A valid driving license issued by the RTA UAE
  • A valid passport (and a copy) 
  • Copy of the power of attorney (if valid)
  • Details of the business expenses, assets, and liabilities 
  • The car’s proforma invoice or the quotation by the dealer showing the on-road and ex-showroom price of the car
  • The bank account statement of the business for the past 3 to 6 months
  • Copy of a valid trade license that has been issued by the DED (Department of Economic Development)
  • A valid passport ID, EIDA Card, or Visa of the signatories of the company
  • Copy of the power of attorney (if applicable)
  • Details of the business expenses, liabilities, and assets 
  • The proforma invoice of the car or the quotation provided by the dealer that mentions the ex-showroom and on-road price of the car

How to Apply for RAKBANK RAK Auto Loans?

To apply for a car loan from RAKBANK, here are the options that you can go with:

  • Offline application - If you opt for the traditional method, you can simply visit the nearest RAKBANK branch and apply for the car loan. In this case, you would have to fill up a manual application form and submit your documents at the branch. 
  • Online application - RAKBANK also allows online applications for its auto loans for a convenient customer experience. You can simply check out the options on the RAKBANK official site, select a plan out of the list, and provide details like your name, mobile number, and email address. After entering the captcha code for verification, you can click on ‘Apply Now’ to proceed with the loan application. 
  • Phone banking - Another way to apply for the loan is to call up the bank and inform them about your request. Call 04-2130000 or the IVR at 600 54 4049 if you are an existing customer of the bank. For RAK Islamic customers, the number is 600 54 0044.
  • Policybazaar UAE - For easily comparing the best auto loan plans in the UAE and buying one in just a few clicks (or taps), you can explore the ‘car loans’ section on policybazaar.ae. The most significant benefit of choosing this option, besides viewing all plans at once, is that you will always find our customer service available to assist you with any loan query.

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.

RAK Auto Loan Calculator 

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 

  • The loan amount
  • Preferred repayment tenure
  • The tentative date of the first installment
  • Interest rate
  • Type of borrower – individual or business entity
  • Frequency of loan repayment
  • Any promo period

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. 

Things to Remember about RAK Auto Loans

When availing of an auto loan from RAKBANK, here are a few essential aspects that you should keep in mind –

  • The interest would be charged on the full amount of the loan that you have availed even if the amount includes the cost of insurance or other charges.
  • The bank can change the features or terms and conditions of the loan. In such cases, you would be notified 60 days in advance.
  • The financed vehicle acts as collateral for the loan. Consequently, if you default on the installment payments, the vehicle can be seized by the bank.
  • Your credit score, a crucial parameter, affects your loan eligibility, the amount that you can avail of, and also the interest rates.
  • You can avail of the loan under both Islamic and non-Islamic categories.

FAQ's

Can I cancel the loan once availed?

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.

Can the interest rates be changed by the bank?

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.

What is the currency of the loan?

The loan is issued in AED, i.e., Emirati Dirham.

Can I register the financed vehicle in any Emirate?

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.

Is there any requirement for insurance on the loan?

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. 

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