Even though Dubai has several public transportation options, nothing can beat the liberty of having your vehicle. However, buying your car depends on the financing option you choose to make a quick purchase. An auto loan is one of the most popular modes of purchase for most car buyers in Dubai. While most banks in the UAE make the process straightforward, things can be a little confusing for first-time buyers. Here is a list of frequently asked questions to help you to understand car loans and financing in Dubai.
Car Loan FAQs
What is a car loan?
A car loan is a loan supported by the bank of your choice to purchase a vehicle. With an auto loan, you pay the vehicle price along with an interest amount. However, you don’t pay the depreciation cost as you do with a lease.
How to get a car loan in Dubai?
Most banks require the following documents from an applicant:
- Passport-visa
- Emirates ID
- Valid quotation
- Driving license
- Salary certificates and bank statements from salaried individuals
- Trade license and bank statements from self-employed individuals
- Auto insurance policy
- Valuation certificate of the vehicle
- Car registration document
What is the minimum age limit to get a car loan in Dubai?
The minimum age to avail of a car loan in Dubai is 21 years.
What is the maximum tenure for a car loan in Dubai?
You can take a car loan for usually one to five years, depending upon the type of vehicle you are planning to buy. However, older used cars usually have a shorter tenure. For instance, for a 10-year-old model, the loan tenure is limited to two years. It is important to keep in mind that the loan tenure may differ from one bank to another; however, it shouldn’t exceed 60 months.
What is a pre-owned car loan?
A pre-owned car loan is used to buy a second-hand car in Dubai. The car loan is provided at an attractive interest rate with a repayment tenure of up to 7 years.
How can I sell a car with a loan in Dubai?
As a car owner, you can easily sell the car with loan in Dubai to any individual. There are two ways to sell a car with a mortgage in Dubai.
- Pay the Loan: You can pay the remaining loan amount to the bank and clear the remaining balance.
- Look for a Finance Buyer: You can also look for a buyer who wants to buy a car via bank loan and is willing to pick the same bank that you have chosen for your vehicle.
- Find a Cash Buyer: Another way to sell the loaned car could be to find a buyer who wants to pay the loan on your behalf.
- Auto-Loan-Pay-Out: Last but not the least, you can also opt for AUTOSWAP in Dubai. It is a co-venture of Emirates NBD and dubizzle cars which allows sellers to sell their mortgage car without settling the existing loan.
You can also refinance a car loan in the UAE by following this guide.
What are the general interest rates applicable on a car loan in Dubai?
The interest rates depend on whether you are buying a used car or a new car in Dubai. It also depends from one bank to another. Generally, the interest rates on car loans range between 2.25% to 6% with a repayment period of 5 years.
What is the minimum salary requirement to apply for a car loan?
If you are a UAE national or expatriate resident aged between 21 years to 65 years and earn AED 10,000 per month, you can apply for a car loan in Dubai. However, some banks also offer a car loan with a minimum salary of AED 3,000 to AED 5,000. Therefore, you must check with your bank before proceeding.
Which bank is best for car loans in Dubai?
Following are some of the best loan providers in Dubai:
- ADCB Bank Car Loan: Maximum car loan amount is AED 1.5 million
- ADIB Bank Car Loan: Maximum car loan amount is AED 500,000
- Emirates NBD Car Loan: Maximum car loan amount is AED 500,000
- Mashreq Bank Car Loan: Maximum car loan amount is AED 500,000
- Emirates Islamic Bank Car Loan: Maximum car loan amount is AED 1.5 million
How much car loan can I take from the bank?
Almost all banks in Dubai have set an upper limit on the amount they can lend as an auto loan. However, the final amount depends on the car financing percentage which is generally 80% in Dubai. The Equal Monthly Installments (EMI) of your car loan should not be more than half of your salary minus your existing liabilities such as credit cards.
How much deposit do you need for a car loan?
Since the bank only finances 80% of the car’s value, you are required to pay the remaining 20% as a down payment. Moreover, some banks ask to settle the down payment directly to the car owners.
This concludes our list of FAQs that can help you guide how to get a car loan in Dubai. Besides car loans, check FAQs for Car Insurance in Dubai if you have any queries about it,
Now you know how to get approval for car loans easily in Dubai, check out the listings of used cars for sale in Dubai. You can find a range of popular cars such as:
- Second hand Mercedes Benz in Dubai
- Used Toyota in Dubai
- Second hand Nissan in Dubai
- Used BMW for sale in Dubai
- Second-hand Honda for sale in Dubai
Stay tuned to the UAE’s top auto blog to know more about car insurance policies, car finances options and more.
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