With hundreds of car financing schemes to choose from in the UAE, all offering long and short term credit plans, there’s plenty of choice across the country. Your first choice is whether to buy a new or second hand vehicle, with different loan policies applicable.
Firstly, you’ll need to secure a down payment, the size of which will vary according to your loan type. Typically, banks will generally ask for 20% of the car’s value as a down payment, but some banks will give you 100% finance deals. You’ll need to meet the bank’s minimum salary expectations which are usually around AED 5,000 a month – again it’s dependent on the bank and the value of your car. The loan period will vary, but many banks like to impose a 60 month limit on repayments. Bank limits vary, but some will offer you over AED 1 million. You’ll also need to pay an arrangement fee to the bank which varies from AED 250 to over AED 1,000.
Many banks will have an early settlement fee – normally around 1% of the car’s value – which you’ll need to pay if you repay your loan earlier than agreed.
Interest rates for car loans can be as low as 2%, but check if you’re signing up to a fixed interest rate or a variable rate. Many dealerships offer good value deals during the Dubai Shopping Festival and Summer Surprises, including interest free four year schemes including free servicing, registration, insurance and more.
Here’s what you’ll need to get a loan:
- Three months of bank statements
- Salary certificate
- Passport copy
- A valid visa and Emirates ID card,
- Standing instructions or post dated monthly cheques
- An audited balance sheet if the finance is above AED 750,000
You’ll also need to be over 21 years old, and no older than 60 when the loan has fully matured. Some banks will also insist that you’ve been employed for at least two years, and with your current employer for more than a year.