Buying a new cars in Dubai is possible for many individuals mainly due to the easy attainability of financing and car loan options. However, it is essential to have a deep knowledge of the paperwork and requirements before intending to apply for a loan for a new cars in Dubai.
When buying cars in Dubai, a car loan is one of the leading payment options for most people. Whether buying a brand-new car or financing a used car, it’s important to choose a bank wisely. This article explains how to get a loan for a new cars in Dubai, what documents are necessary for this process, and the rules and regulations associated with these loans.
How to Lease a new car in Dubai?
A new car in the UAE can cost from a few thousand to millions of dirhams, depending on the make or model. Of course, not everyone can pay the full payment amount at once. If you do not have the funds you want or would rather use the leftover money for other expenses, you can always request a car loan in the Emirates of Dubai.
But first, you must learn how Dubai’s car loan procedure works. The “car loan eligibility requirements” differ depending on your financial status and situation. Whether you are looking for a brand new car in Dubai or want to finance a used one, here are some details to keep in mind:
Select a Car
The first decision you must make when leasing a sedan is what car you want. The UAE’s cars are cheaper than those in Europe or the USA. In addition, with car leasing in Dubai, you can enjoy driving luxury cars as if you have them. Whether you need a luxury trip for a few months or a more robust car for frequent trips around town, the choice of car is completely up to you.
Select the Car Loan Duration
You may lease a car for different periods. These include 1-year car leasing, 2-year car leasing, 3-year car leasing, and more. The longer the car is leased, the more money you save. If at the end of your lease you want to extend the time or just buy new car in Dubai, you can also do that. Both options are inexpensive.
Many banks in the UAE have multiple criteria for approving a loan for a new car in Dubai. Below is the list of the necessary documents required for a car loan in Dubai:
- Original Emirates ID
- Proof of income/salary certificate
- Valid passport/visa
- Insurance policy documents
- Driving license
- 3-6 months bank statements
- Car’s valuation certificate
- Car’s registration
Ex-pats interested in requesting a loan should verify the validity of their hometown’s driving license in the United Arab Emirates. If your driving license is invalid, you must apply for a UAE driving license to qualify for car finance.
Also, ex-pats must provide a home address in their home country, regardless of how long they have lived in the UAE. The bank may also ask for a reference from a family member or friend.
Close the Final Deal
Finally, Visit the car leasing company’s office or bank of your choice to close the final deal. Here you will provide the required document, read the lease agreement, and if everything offered suits your requirements, you pay and take the car.
Terms and Conditions for leasing a Car in Dubai
Minimum Age and Salary
A borrower must be at age of 21 years to apply for a car loan in Dubai. The required minimum salary varies from bank to bank but is usually between AED 3k and AED 5k. Check with some banks to see if you meet the requirements.
In the UAE, some banks provide a repayment period of up to five years; for used cars, the maximum period is based on how old the vehicle is. For older cars, however, the repayment tenure can be even shorter. For example, you can have a two-year payback period for a 10-year-old model.
Minimum Amount for Car Loans in Dubai
Most banks only provide 80% financing for cars; however, you must pay a 20% deposit in advance. Sometimes, the bank takes care of the deposit, while some banks ask to pay the deposit directly to the car manufacturer before the bank funds the 80% amount. Additionally, some banks state the minimum car financing amount is around AED 20,000. To qualify for a loan, the vehicle you wish to purchase must have a minimum value of AED 25,000.
Thing to Consider Before Applying a Car Loan
Following are the points you need to consider before getting a loan for a new car in Dubai:
Comparing Dubai car loan interest rates is essential to get the lowest one. The interest rate payable by the person is calculated by multiplying the 80% car’s value by the respective interest rate of the respective bank when you want to buy new car in Dubai. The result is multiplied by the term or number of years—around 4-5.
Loan Repayment Term
The loan term plays a decisive role in the monthly installment payment. For example, a longer loan repayment period means you have to pay more interest to the bank, while a shorter loan period means you have to pay more back to the bank each month. Therefore, you need to check your financial status and monthly income before making any deal.
Keep up with Loan Repayments
When you finalize a vehicle finance deal, it is important to keep up with loan repayments, or a bank may repossess your car. Furthermore, late fees and other penalties may also accrue if you miss payments.
The EMI (Equated Monthly Installment) is the amount you pay in monthly installments over the life of a loan. The EMI will tend to remain fixed for the entire loan period and often includes a car loan’s principal payments and interest charges.
Wrapping it Up
That concludes our guide on getting a loan on new cars in Dubai. Now, you are aware of all the information. Now, you are aware of all the information. It will help you do a better job when making your decision. When choosing a car, it’s important to consider both convenience and cost.