Car Loan in Dubai; Key Points to Know

If you have recently moved to Dubai, the relatively high cost of buying cars will sooner or later prompt you to take out a loan, just like other locals or expats.

Fortunately, getting a car loan is widely accepted and the most common way to own a car in the UAE.

If you are one of the applicants who are thinking of financing a car through loans but are not familiar with the necessary processes, consider the following article of FindCarDubai as a guide.

Obtaining a car loan in Dubai may seem complicated. We tried to explain the needed information in the simplest way possible to help you purchase your preferred vehicle with the least trouble.

Documents and Eligibility Required for Car Loan in Dubai

_Age Limit: The applicant must be between 21 and 65.

_Proof of residence: Original and Copy of UAE resident visa and valid passport is mandatory.

_Identification: Emirates ID (Original and Copy)

_Proof of income: Bank statements and salary certificates indicating the applicant is employed for 3 to 6 months.

_Minimum salary: The figure varies depending on the bank you select (between AED 5,000–AED 8,000)

_Driving License: Banks ask for a valid UAE driving license.

Note that in addition to banks, some car dealerships also offer financing options for customers to purchase cars in Dubai. This can simplify the loan process or make it easier by eliminating intermediaries.

Which bank is Best for a car loan in Dubai?

Once you are certain that all the necessary documents have been gathered, choose one of the banks or financial institutions mentioned below. To make the most informed choice, be sure to review the service offerings and interest rates. Any required information is provided on the banks’ websites.

• Emirates NBD
• Dubai Islamic Bank (DIB)
• Abu Dhabi Commercial Bank (ADCB)
• Mashreq Bank
• First Abu Dhabi Bank (FAB)
• RAKBANK
• HSBC
• Noor Bank

Minimum and maximum financed amount

Generally, the lowest car loan amount provided by Dubai’s banks is between AED 20,000 and AED 30,000. For those who intend to purchase high-end cars, the loan amount can reach up to one million dirhams at most.

Banks thoroughly review their creditworthiness and income to offer such a loan. Although each bank has its own terms and conditions in financial services, typically, all banks provide up to 80% of the value of the Car as a loan.

Depending on the financial conditions, you have between 12- and 60-month opportunities to settle the loan. If you want to learn more about car modification in Dubai, including the rules and guidelines, we recommend you visit this article.

New or used Car?

A significant point about getting a car loan in Dubai is that the interest rate for new cars is lower compared to used cars.

For example, the flat interest rate assigned to a new car loan is 2% to 3.5% per annum, while this figure for a used car is 3% to 4.5%. In general, the policy of the UAE government is to encourage people to buy new cars.

FAQ

Are applicants with ongoing loans allowed to get new loans?

Yes, but under certain circumstances. First of all, your existing loan status will be evaluated to determine whether you have been punctual with payments or not. Any defaults or delays will put you higher-risk borrower category.

Another criterion that lets you go under multiple loans is that your total monthly debt (including both car loans) does not exceed 50% of your monthly income.

This condition, along with your employment stability, assures the banks that you are able to manage the payments.

It is highly recommended that Dubai Bank’s policies be checked and reviewed. Some of them may impose the prerequisite of a higher down payment.

Can expats get car loans in Dubai?

For whom have newly moved to Dubai, it is possible to apply for car loan, but under slightly more complicated conditions.

Job stability status of is the most important criterion that banks check. An immigrant needs at least 3 to 6 months of continuous employment in the UAE to get confirmation.

Most banks and financial institutions may consider a minimum monthly income requirement between AED 5,000 and AED 8,000. Some banks check the credit history of the applicant from their home country.

A good credit history facilitates getting an auto car.

If you need more information about buying a car in Dubai, read this article, “Documents Required for Buying a Car in Dubai.

Which banks offer loans for high-end cars?

To buy your dream car you can count on Emirates NBD, Dubai Islamic Bank, First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Mashreq Bank and RAKBANK as loan providers.

Each of these may offer certain financial services such as more loan amount, less down payment, longer repayment period or lower interest rates.

Assess which is more compatible with your financial situation and suit your needs.

Summary

With the high demand for car loans in Dubai, banks strictly scrutinize your financial responsibility. So, make sure that the loan you take corresponds to your financial capacity.

If you belong to the low-income group in the UAE and are earning below the minimum salary mentioned, don’t worry. Fortunately, there are government support schemes that make it easier to obtain a loan car.

For instance, Dubai banks may reduce the loan amount or increase the down payment and the number of guarantors required.

We hope the details provided here help you in purchasing your ideal Car in Dubai.

Be informed that any facts and figures in this article are accurate and reliable at the time of publication, and the article will be updated in case of changes in the information.