What is a Car Loan ?
When the time comes to buy that dream car and you realize that the only thing standing between you and pure driving bliss is the lack of money to buy the car, it’s time to head in for a car loan. A car loan makes sure you get the opportunity to make your dreams come true in such a way that you can enjoy the car today and pay for it tomorrow. Some of them may make the repayments even easier on you by reducing the instalments for the first year just so that you don’t experience too much of a financial burden in the initial days of owning the car.
Features of Car Loans
- Based on the bank providing the loan, car loans can start from 30000AED and even go as high as AED 900,000.
- For most car loans, the repayment period can range from 12-60 months based on what you find comfortable.
- If you go in for a flat interest rate then you could end up paying as little as 2.35% per annum. This interest rate is dependent on the banks and may change from one bank to another.
- You can choose between flat interest rates or reducing balance interest rates, which tend to be a bit higher.
- You can even take a car loan to buy a used car.
- 80% to 100% of the money needed to but the car can be taken as a loan.
- The car loan can be availed by the residents and even expats working the in the UAE.
Benefits of Car Loans
Car loans don’t just act as the financial instrument that get you the car you always wanted. They also provide lots of benefits to customers some of which can include things like :
- Most current accounts come with a minimum balance clause which cannot be violated. Many banks will waive that clause if you take car loans from them.
- Many of the banks offer credit cards that are free for the first year
- These loans can be taken for all types of cars including sedans, saloon, 4X4 vehicles, etc.
- Some banks will even provide car insurance at competitive rates along with the loans
- SIP (Staggered Investment Plans) allows for easy to afford instalments which increase gradually with the tenure of the loan
Types of Car Loans available in the UAE
Since different customers can have different needs, banks in the UAE offer auto loans that are tailored to each one’s needs. These car loans are:
- Conventional car loan with/without salary transfer
- The conventional car loan is the one where customers can apply for a car loans based on the maximum amount that the bank will offer. They can then pay back the loan over a period of up to, or more than, 60 months along with an interest rate. These loans can also be taken with or without a salary transfer to an account held with the bank.
Islamic Car Loans
Islamic car loans are those that are auto finance that follow the rules of Islamic banking. Most of these loans follow the concept of Ijarah wherein the bank purchases the vehicle on behalf of the customer. The customer can then lease the car from the bank and pay a specific amount for a fixed period of time and once the car is paid for, the bank will transfer the ownership of the car to the customers.
Car Loans without Down-payment: 100% Car Loans
While most banks offer only financing for a part of the cost of the car, there are banks that are willing to offer up to 100% of the cost of the car. These loans can even include the cost of the insurance for the car along with the actual price of the car.
Used Car Loans
While many people go in for new cars, there are some who might want to go in for a used car. Even for such purchases, banks in the UAE provide used car loans that work almost the same way as new car loans do however, there can be one point of divergence with these loans. These loans can be taken only for cars that are not older than a specific number of years determined by the bank.
Best Car Loans available in the UAE
While there are a lot of banks that offer car loans in the UAE there are some banks that are considered the preferred places to go to for a car loan.
Benefits of hiring our services
- Easy and quick solutions to all your personal financial problems
- We help you compare the interest rates on personal loans in Dubai offered by the various banks and help you make an informed decision in opting for the most advantageous offer
- We provide you with the latest information with reference to the eligibility criteria and the procedures involved in the lending process
- Hassle-free application procedure
- Quick turnaround time in processing and sanction by the banks