Buying a car in the UAE has become increasingly accessible thanks to the wide range of financing options available. Whether you are into brand-new cars or looking for a used one, the UAE banks offer car loans, with flexible repayment terms and competitive interest rates. But how do you get a car loan in the UAE? Which banks offer car loans?
Here are all the details you need to know before securing a car loan.
About UAE Car Loan
In UAE, residents can easily buy a new or used car by applying for a car loan. The UAE Central Bank has made this process easier than ever before. You can apply for car loans through banks or registered finance companies in the UAE.
Car loans in the UAE are secured by a mortgage on the vehicle itself, distinguishing them from unsecured personal loans. Repayment periods typically extend to 60 months, with a maximum monthly instalment of half the borrower’s salary. However, loan terms and conditions, including maximum instalment amounts, can vary significantly between lenders.
Things to Consider for Getting a UAE Car Loan
For getting a UAE car loan, you must consider a couple of things for a smooth process:
1. Research and Comparisons
Before applying for a car loan in the UAE, you should research its features and benefits well. Then, you must compare the interest rates from different UAE banks for the best deals. Also, you must look for a flexible plan with a longer repayment period.
2. Eligibility Criteria
You must consider the eligibility criteria to apply for a UAE car loan. The banks in the UAE generally have the following criteria:
- Applicant’s age: From 21 years to 65 years.
- Applicant’s Salary: Banks generally require a minimum salary ranging from AED 5,000 to AED 15,000.
- Employment Status: Applicant must have a permanent job.
3. Required Documents
The major documents that all the banks require for UAE car loans are:
- Emirates ID
- Valid passport or visa
- Driving licence
- Proof of income
- Documents of UAE car insurance
Top Banks for UAE Car Loan
Various UAE banks offer low interest rates and allow you to calculate the car loan through their websites. The following conventional and Islamic banks in the UAE offer the best car financing:
1. First Abu Dhabi Bank (Islamic Car Finance)
The First Abu Dhabi Bank provides car loans at the best interest rate and a long repayment period. Also, FAB requires minimum documentation and loans up to 80% of the car’s value.
Features
- Loans of up to AED 1.5 million or 80% of the car value
- Interest rates starting from 2.15%
- Minimum monthly salary of AED 7,000
Documents
- Vehicle quotation
- UAE driving licence
- Bank statements (where applicable)
- Salary certificate addressed to FAB Islamic (where applicable)
- The Murabaha request form
- Copy of a valid passport/residence visa/Emirates ID (originals must also be presented)
2. ADCB
The ADCB offers competitive car financing packages and loans up to AED 1.5M. The bank provides a flat 2.49% interest rate. Another benefit of applying for a car loan from ADCB is the minimum monthly instalment of AED 1,499.
Features
- One-signature application
- Up to AED 1.5 million finance amount
- Up to 60-month repayment tenor
- Finance up to 80% of the car value
- Insurance finance option
- Quick approvals
Documents
- Salaried:
- Completed application form
- Valid passport and visa
- Valid EIDA card
- Valid Driving Licence
- 30 days or less salary certificate
- The last 3 months’ bank statements
- Dealer quotation
- Details of existing loans/liabilities.
- Self-employed:
- Completed application form
- Valid passport and visa
- Valid EIDA card
- Valid driving and trade licences
- The last 3 months’ bank statements
- Dealer quotation
- Valid Power-of-Attorney copy
- Details of existing loans/liabilities.
- Companies:
- Completed application form
- Valid company passport, visa and EIDA card
- Valid trade licence
- The last three months’ company bank statements
- Dealer quotation
- Valid Power-of-Attorney copy
- Details of existing loans/liabilities.
3. Emirates NBD (Fixed Rate Auto Loan)
The Emirates NBD is one of the most popular banks in the UAE, offering the best policies for car financing. ENBD also provides 0% auto cash loans and Green Auto Loans for hybrid and electric vehicles in the UAE.
This way, ENBD supports UAE’s sustainable future policy with a 3.75% interest rate.
Features
- Finances up to 80% of vehicle cost.
- No need for a salary certificate or driving licence
- 0% installment payment plan
- Offers one deferment per loan cycle
- Financing used cars up to 12 years old
- AED 5,000 Minimum salary
- 20% Minimum down payment
Documents
- Salaried Individuals:
- Quotation for new cars
- Car valuation for used cars
- Auto loan application form
- Original Emirates ID
- Passport (copy)
- Resident visa page (copy)
- Signed Etihad Credit Bureau consent form and UAE FTS (statement of account)
- Car valuation for used cars
- Self-employed:
4. Bank of Baroda (Vehicle Loan)
Bank of Baroda is an Indian bank with multiple international branches. The bank offers car loans to UAE nationals and Indians. Moreover, you can get a UAE car loan from the BoB at a flat interest rate of 2.75%.
Features
- Up to 80% of financing for new vehicles and 70% for old ones
- Extended repayment period:
- 48 months for new vehicles
- 36 months for old ones
- Low interest rate and processing fee
Documents
- Emirates ID
- Passport
- Driving Licence
- Bank Statement
5. Mashreq Cashin Car Loan
Mashreq introduces the first-ever digital car loan, CashIn Car Loan, revolutionising the car buying process. This innovative service allows users to negotiate with car dealers using cash.
Mashreq allows customers to receive a cash pay order in their name and drive away with their vehicle.
Features
- Borrow up to AED 500K
- Interest rates start at 3.19% flat (Equivalent reducing rate 5.99%)
Documents
- Valid Passport
- Valid Emirates ID
- Mobile number
Benefits of Getting a UAE Car Loan
The key benefits of getting a UAE car loan are:
- UAE banks offer quick approvals for up to 80% of a car’s value, requiring minimal documentation and fast approvals.
- Financing your car over several years with competitive interest rates reduces financial strain. This way, you don’t have to pay for it immediately but pay over time while maintaining your savings for emergencies.
- UAE car loan providers offer flexible repayment terms of up to five years.
- You can also get a loan for second-hand cars in the UAE. Numerous UAE banks offer loans for used cars with competitive interest rates, reflecting the widespread popularity of second-hand vehicles.
- Car loans in the UAE generally require no additional collateral.
- With fixed or floating interest rates, UAE car loans allow you to choose the interest rates based on your preferences.
- The car loan also improves your credit score in Dubai or other Emirates.
FAQs
Yes, you can get a car loan from UAE banks and finance companies.
Dubai offers self-employed customers car loans with interest rates ranging from 2.95% to 4.25%. On the other hand, the used EV car loans are:
– 2.47% for salaried customers
– 2.79% for self-employed customers
Each UAE bank has a different processing fee. For instance, in Emirates NBD, the processing fee is 1.05%.
Now that you know about UAE car loans, you can easily apply for car financing. With several UAE banks offering low interest rates, getting a car loan in the UAE is feasible.
Besides, it is always better to know the ins and outs of buying a car in Dubai. Also, if you want a clear understanding of leasing vs buying a car, stay connected with the Property Finder blog.
