Car Loans: Everything You Need to Know
Car loans are the single most common personal loan within the United Arab Emirates. So if you’re planning to take out a loan to pay for a new or used car, you’re not alone.
What to expect
Before you purchase a vehicle, the dealership will give you a quote for how much you’ll have to pay per month. This payment is divided into the principle (the balance of the loan) and the interest (the fee charged for taking out a loan). All of this, when taken together, is known as the Annual Percentage Rate (APR).
Make sure to shop around before taking out a loan! UAE Money Experts recommend that you check the dealership, your bank, or the internet for the best deal on a loan. No, it’s not just banks that do this nowadays. Sometimes the better deals come from businesses that operate solely on the web. Other times the dealership itself has the better deal (although this is rare, since they’re getting their loan from a bank, and tacking on additional interest to your payment to make more money off you), and you should at least take a few minutes to look at their financing options.
Five years is the average time it takes to pay off a car loan. REMEMBER: You need to take into account both the principle AND the interest rate to get the total cost per month.
Beginning the application process
Before you request a car loan, make sure you have all the necessary documents on hand. This usually includes a bank statement, proof of employment (a paycheck stub works here) and proof of salary (how much you make per year). You’ll also need all the proper identification and a valid driver’s license.
The lender will look at all of this and make a final decision on whether to grant you a loan or not. They’ll also decide what your interest rate will be. Individuals with bad credit often pay more on interest than someone that has excellent credit. The amount that you paid for the car up front (there is a minimum payment here, usually around 15%-20% of the car’s total value) could also influence the interest rate (and thus lower both the premium and the total per-month cost of the car).
Should you fail to make payments on your car, the entity that gave you the loan can repossess the vehicle. Make sure you can pay the monthly cost before you make this kind of large purchase!
Not sure where to start looking for a car loan?
Also use the Loan calculators to work out exactly how much it will cost
|Account Name||Car Loan||Auto Loan||Car Loan||Auto finance||Auto Loan
|Features||Fast and easy car loan approval|
Ballon payment option
|3 month Grace Period||refinacning of an existing car|
low processing fee
flexible payment options
|Hasstle free appliaction process
early settlement fee 1%
|Salary Transfer Required||No||No||No||No||No
|Max Loan Amount||918,000 AED||500,000 AED||500,000 AED||500,000 AED||750,000 AED
|Minimum Salary||7500 AED||5000 AED||5000 AED||5000 AED||7000 AED