If you’re a resident in Dubai or in other parts of the UAE, it’s important to own a car to get around. However, the average income in the UAE is currently around AED 146,000, and most people don’t have the money to simply buy a new or used car with cash.
This is why banks offer loans, which lets you finance your new or used car through monthly payments. But how do you get a car loan in the UAE? What do I need to get a car loan in Dubai?
We’ll be covering these and many other questions in this article. You’ll know exactly what documents you need for a car loan, as well as other useful resources such as a car loan calculator to make sure you’re properly equipped to get the right car loan.
Can I Get A Car Loan With Bad Credit?
The short answer is yes.
Even if you have bad credit or have been rejected for a car loan before, you can still get a loan from various private money lenders. These lenders exist throughout the UAE.
How Do Car Loans Work?
There are three main components to car loans: principle, term, and interests rates.
The principle is the total cost of your vehicle, including any fees that the lender or the dealership included for the car loan. It also includes any additional options or add-ons that you might have selected.
The term is the amount of time you have to pay back the loans, usually defined by your lender in months.
Interest rate is the percentage of interest that the lender has to pay as they pay back the loan, usually as a fraction of the principle.
There are plenty of other components to consider when getting a car loan, and it’s important to understand as many as possible before contacting your bank or a private lender.
How Do I Get An Auto Loan in UAE?
You can get an auto loan by contacting your bank or another private lender. There are generally a few steps towards application, including stating what car you intend to loan.
You’ll also need a few different documents as background information, which will prove to the bank or another lender that you’re able to pay for the loan accordingly.
How Much Auto Loan Can I Afford?
You can find out how much you can afford by finding your equated monthly instalment, or EMI. Your EMI contains the principal portion of the loan and the interest.
Your EMI will be relatively fixed throughout the payment process, and how much you’ll pay monthly can be negotiated with your lender. You can also get a preview for how much you’ll end up paying through a car loan calculator.
What Is Needed to Get a Car Loan in UAE?
You’ll need a few different documents ready for car loans in the UAE.
Proof of employment and bank statements are vital to providing your financial information. An Emirates ID and labour card are also needed, along with a driver’s license and car documents – such as vehicle registration card and insurance policy.
You’ll also need to provide your current address, and although not imperative, a down payment will lower your overall loan principle from the outset.
How Do I Get Approved For A Car Loan In UAE?
To get approved for a car loan in the UAE, you first need to provide your credit score. Like we mentioned earlier, you don’t necessarily need a great score to be applicable for a loan.
You’ll also need to find your debt-to-burden ratio, which is the ratio between total instalment paid on loans relative to income. Generally speaking, your ratio should not exceed 50 per cent of your income.
Otherwise, you’ll also need to provide all the other required documents along with your application to get approved for a car loan, as addressed earlier.
How Do I Take Out an Auto Loan in UAE?
To get a car loan in the UAE, you need to be at least 21 years old to apply.
You’ll need to prepare all the required documents, and check your credit score as well as overall income to make sure you’ve met the requirements set by either your bank or another lender.
Check the repayment tenure of the car you’re loaning, as well as the interest rate to make sure you and your lender are both on the same page when it comes to payment.
How Do I Qualify For a Car Loan In UAE?
If you want to get a car loan in Dubai or in other parts of the UAE, your salary has to be at least AED 3,000 to 5,000 a month. There is certainly some variation between banks when it comes to minimum salary requirements on applications, so contact your banks to find out the exact figure.
How Do I Apply For a Car Loan?
You can apply for a car loan by contacting either a local bank that you typically do business with or with another bank recommended to you by your car dealer.
However, if you have a poor credit history or are unable to secure a loan from a bank, you can also turn to private lenders to apply for a car loan.
How Big of a Loan Can I Get?
Most banks outline the minimum amount that they’re willing to finance for a car loan. We estimate it comes down to around AED 20,000.
It’s important to note that banks will agree to finance up to 80% of the vehicle’s overall price. That means the other 20% has to be paid via down payment in most cases.
Therefore to qualify for a car loan in the UAE, your vehicle needs to have a minimum value of around AED 25,000. However, there are lenders who can offer a car loan in the UAE without a down payment.
You can use a car loan calculator to get an estimate for your loan before you visit your bank.
Can I Settle My Car Loan in UAE?
Settlement usually entails negotiating the terms of a loan or debt with a bank and agreeing to pay less than the initial amount.
In the UAE, the settlement procedure once again depends on the bank you work with. Generally speaking, you can clear the loan by paying off the outstanding fees that you owe along with certain early settlement fees.
Get the Most Reliable Car Loan in the UAE
Getting a car loan in the UAE might feel like a daunting task, but by knowing the right information and following the correct guidelines, you’ll be paying off your loans with ease in no time.
Leverage this article to have the right knowledge before going to your bank for a loan negotiation. Use car loan calculators to figure out how to get a car loan or how to get a car loan with bad credit.
If you’re looking for reliable car loan services in Dubai and throughout the UAE, contact us today and start your application!