Car loans have become inevitable, if you want to buy a good car in UAE. There are numerous factors that should be considered before selecting an institute to acquire a loan. It includes but not limited to processing time, processing charges, loan limit, interest rates and other benefits. Almost all the commercial banks offer car loans for both new and used cars as well as local and imported cars. One can easily get car loans from any commercial bank subject to the conditions defined by that specific bank and Central Bank of United Arab Emirates regulations. The loan amount cannot exceed 80 percent of value of financed car. The amount should be paid back over a maximum period of 60 months.
UAE is an amazing place for living, and if you need external financing to buy the car of your dreams, then go for car finance. There is nothing to worry about; anyone with certain conditions can easily acquire car loan to buy a car in UAE. If your head is spinning with numerous questions about car loans, then here is a quick guide for you:
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How you can apply for a car loan:
You can get car loan for both new and used cars in UAE. When you take a car loan, then the car is mortgaged to the bank and it belongs to them until you pay back the loan. All major banks and financial institutes offer car loans. Few of the banks in United Arab Emirates are also offering online application submission through their respective websites. You may contact bank call center and get more information for application procedure. Banking call center mostly work 24/7. Website chat heads can also be used. However walk-in to specific branch or the branch where you are operating your account could be a best place to start.
Necessary documents for a car loan:
If you are going to apply for a personal car loan, then you must have copies of important documents which may include your UAE ID Card, salary certificate, three months’ bank statement and your driving license. Additionally, you must have a copy of insurance policy and a valuation certificate that proves the value of the car.
General rates applicable on car loan:
Due strong economy, great policies by the Central bank of United Arab Emirates, UAE residents and Emiratis enjoy lowest interest rates on consumer financing including vehicles. Commercial banks charge very low interest rates even some cases banks charge zero interest rate. However, usually it ranges from 2.25 to 6 percent depends on the bank and product you are going to buy.
Calculation of Equated Monthly Installments (EMI):
EMI basically includes principal and interest amount; it is calculated based on loan tenure. EMI value is usually higher for long term loans. In UAE, you must be at least 21 years old to be eligible to apply for a car loan. Loan tenure depends on the type of vehicle you wish to buy. Minimum salary requirement to be eligible for a car loan in UAE is AED 3000 to 5000. Settlement procedure can differ from bank to bank.
There are several websites in UAE which provide loan comparison. It may be beneficial to get the exact idea how the loan processing will work. But choosing the best car is also an important factor. You may visit Hubb Motors section and find thousands of cars of different brands and models with price variations. Buying your new car with a car loan can be a wise choice, as compared to buying a cheaper but older car.