Things to keep in mind when applying for a car loan in the UAE

Jitendra Bothra
Est. Reading Time Only a minute

Financing your car purchase is a big part of the process of owning your own vehicle. In the  UAE, most buyers opt for an auto or car loan. There are a couple of benefits of doing this. You  don’t have to put up anything as collateral, the car itself serves as your collateral. Lot of banks  provide flexible payment options, to suit various needs. Infact, it helps your credit history!

What you need to know before applying for a loan

Most banks offer a loan for upto 80% of the car’s value. So keep in mind that you will need to  pay 20% down payment in advance when considering your finances. Some banks also need  you to be paying a certain minimum amount for your car to qualify for a loan.

There is also a minimum age of 21 and your monthly salary needs to fall between a certain  bracket to be considered for a loan. This bracket differs from bank to bank but is usually around  4000-5000.

The loan term usually lasts upto 48 to 60 months. If you choose a shorter loan term , your  monthly payment will be higher. However, a longer loan term will require you to pay more  interest to the bank.

Documents required to apply for a auto loan

● Emirates ID & Passport

● Proof of Income

● Driver’s license

● Bank statements for the last 3 to 6 months

● Insurance policy documents

● Valuation certificate of vehicle

● Car registration documents

A car loan is one of the best choices for financing your new set of wheels, whether buying a  used car or a brand new one. However, always carefully compare interest rates & payment  plans. And read all documents carefully before signing and finalising your deal.

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