Have your heart set on the car of your dreams but don’t have enough cash to buy it right away? Worry not, a lot of people take a car loan to buy a car in Dubai, UAE and pay off in monthly installments. Is your head spinning with questions about car loans now? CarSwitch experts have already done the work for you. Read on to discover the answers to the most frequently asked questions about car loans and financing in the UAE.
How do I apply for a car loan in the UAE?
Car loans are available for both new and used cars in the UAE. Once you take a loan on a car it is mortgaged to the bank and technically belongs to them until you settle the loan. You will need to contact the bank to get the process started.
What documents will I need to apply for a car loan?
To apply for a personal car loan you will need copies of certain documents, including your passport, Emirates ID, labor card, salary certificate, three to six months of bank statements, and your driver license. Your vehicle registration card, a copy of insurance policy and a valuation certificate proving the value of the car will also be required.
What are the general rates applicable on a car loan?
The rates will differ depending on whether you are buying a new car or a used car. Typically, they range from 2.25 to 6 percent and the loan repayment period is up to 60 months.
How is EMI calculated on a car loan?
EMI or Equated Monthly Installment includes the principal and interest components and will be calculated based on the loan tenure. EMIs are usually higher for long-term loans and lower for short-term ones. Contact your bank for more details and get a better understanding.
What is the minimum age limit to apply for a car loan?
In the UAE, you need to be at least 21 years old to be considered eligible to apply for a car loan.
What is the tenure for a car loan?
Car loans usually have a tenure of one to five years depending upon the type of vehicle you wish to buy. For example, the tenure is limited to three years for super premium vehicles or for older cars. Bear in mind that though the maximum repayment period may differ from one bank to the next it should not exceed 60 months.
What is the minimum salary requirement to apply for a car loan?
The minimum salary requirement to apply for a car loan in the UAE is AED 3000-5000. The figure may vary at some banks, so check with your bank before you proceed.
How can I settle my car loan in Dubai, UAE?
The settlement procedure can vary from bank to bank. You can clear the loan by paying off the outstanding amount you owe along with any early settlement fee.
What is the amount of money I can borrow for a car loan to buy a car in Dubai, UAE?
Central Bank regulations require you to pay at least 20% of the value of the car in cash and the banks can finance the rest. The value of the car is based on the valuation certificate that you acquire from an authorized agency.
Can I sell my car that is on a loan in Dubai?
Yes, as the car owner you can sell the car to a dealer or to any individual. Before you can transfer the car to the new owner, you are supposed to settle the loan amount since the car is still technically mortgaged to the bank.
Looking to skip the hassle? Let CarSwitch handle the car buying process for you. And if you want to buy used cars in Dubai, UAE through financing, we can also help arrange that for you. Enjoy the switchin’ experience, folks!