Today, you will find five of the most excelling car loans offered in the UAE, each with a quality of its own. So if you are looking for a loan with the lowest interest rate, or require a huge credit amount to purchase your dream luxurious car, we will offer you all of those options. Additionally, I will propose you a list of elements to help compare different kinds of loan to make an informed decision.
Which Loan to Choose?
It is common for us to get confused when there are multitudes of car financing schemes, each with different loan policies. However, do not fret anymore because knowing a few specific terms will help you in making the right decision. Remember that banks are profit generating corporate and they try trapping customers by offering attractive features with hidden aspects behind them.
- New or Used?
When buying yourself a car, you always encounter a very serious question; whether to buy a new or used vehicle. Though it is eventually your personal choice depending on your budget, the loan you later apply for will be based on this decision. Banks in the UAE offer different loan policies for new and used cars.
- Down Payment
Down payment is mandatory in all car financing schemes and the value of the down payment varies according to the kind of loan you go for. Typically all banks will require you to pay 20 per cent of the car value as down payment and only when you have made this payment can a loan be doled out to you. However, if you go for an Islamic bank, you may not be required to pay any down payment at all.
- Minimum Salary
All car loans have a minimum salary requirement which must be met by the applicant applying for a car loan. You can go for a particular car loan only if the required minimum salary is lesser than what you earn.
- Early Settlement Fee
Many banks have an early settlement fee which requires you to pay an extra amount of money if you plan to repay your loan earlier than what was settled for. This settlement fee is usually 1 per cent, but many banks still require none of that.
- Islamic or Conventional?
While there isn’t a major difference in Islamic and conventional car loans, the terms of both financing vary slightly. You must check with your bank that the Islamic financing scheme they are offering is Shariah compliant.
Following is the list of top 5 car loans in the UAE.
1. Mashreq Car Loans – Lowest Interest Rate!
Many of you will desire to go for a loan that requires the lowest interest rate so that you can conveniently manage your monthly budget. If that is the case, Mashreq car loan may be the ideal choice. With the industry’s lowest interest rate of 2.35 per cent per annum, Mashreq Bank not just offers a high loan of AED 500,000, but also gives you convenient repayment options. You can secure up to 80 per cent loan for yourself and make the repayments within 60 months. This financing scheme is not just valid for brand new cars but also for used ones, making it a lot easier for individuals with financial issues to make their valued purchase.
Unlike many other financing schemes, Mashreq Bank does not ask you to transfer your salary to its account, however, it does set a minimum salary requirement of AED 5,000. You also receive a number of benefits with this financing scheme including free platinum elite credit card and reward points.
2. Al Hilal Used Car Finance – 0% Early Settlement Fee!
Al Hilal car loan is the best financing scheme for buyers who think that they will be able to clear their loans before the agreed upon terms. For instance, if you have applied for a car financing scheme with repayment agreement of 5 years and believe, you will get the loan cleared in lesser than 5 years, you should go for Al Hilal car finance. This way you wouldn’t need to run around banks to clear your early settlement fee, hence will save your precious time and money.
Al-Hilal car financing is both for new and used vehicles, so both national and expats buying new cars would be able to get benefited from this scheme. You must earn a minimum of AED 7,000 per month to become eligible for this car loan and agree to repay the loan amount in a maximum of 60 months. Luckily, if you alone do not earn AED 7,000, you can still get this loan if you and your spouse’s combined salary equals to this amount. With a maximum loan amount of AED 500,000 and an interest rate of 2.99 per cent, you will have to make a 20 per cent down payment to secure this loan for yourself.
3. Emirates NBD – Featured Pack Auto Loans
The Emirates NBD auto loans are available on passenger and business vehicles. The minimum salary requirement is AED 10,000 with the 2.49% flat interest rate. The value added package contains half day approval, flexible payment options, online salik recharge, free annual registration renewal service, round the clock roadside assistance, free bank account and many other services.
4. Dubai Islamic Bank Al Islami New Car Loans – Lowest Minimum Salary!
Do not be disheartened if the minimum salary requirement by other car financing schemes is higher than what you earn, because Dubai Islamic Bank brings you and all those individuals who earn AED 3,000 a month to acquire an easy car loan. While most banks require you to be earning at least AED 5,000 in order to secure a loan, Dubai Islamic Bank will offer you their financing scheme even if you take home AED 3,000! That is certainly good news for individuals who aren’t earning much but still need a car to meet their daily commuting requirements.
Named Al Islami New Car Finance, Dubai Islamic Bank offers loans of up to AED 1,500,000 on an interest rate of 2.35% flat. To secure this loan, you will be required to make a down payment of 20 per cent and pay the remaining amount in a maximum of 60 months. In case you plan to clear your loan before the agreed upon terms, you will however need to pay a 1% early settlement fee. If you opt for Auto Ijara scheme, the interest rate is 3.5 flat per annum.
5. Standard Chartered New Car Loans – Simply the Best!
While there isn’t one particular reason as to why you should opt for Standard Chartered New Auto Loan, you will never regret your decision if you do. Customers who opted for this financing scheme have found it highly reliable and found it better than most of the other bank loans.
Standard Chartered offers a loan of up to AED 1,000,000, making it easier for customers to buy their favorite new car. With Standard Chartered you get the industry’s most competitive interest rates of 2.49 per cent. Your salary must be at least AED 5,000 to be eligible. You will have to make a down payment of 20 per cent and only then can you secure your loan. For used cars, the minimum salary requirement is AED 8000 on a flat 3.5% p.a rate.