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.