Looking for a new set of wheels but need the funds to pay for the car. Don’t worry; we will reveal the best car loans in UAE so that you can consider fulfilling your dream of a shiny new car.
The car loan industry in UAE is expanding rapidly (CAGR of 17%), fuelled by the growing purchasing power of individuals, ease of obtaining a car loan, and increasing desire to finance the purchase instead of paying the whole cost upfront.
Consequently, several financial institutions and banks jumped onto the bandwagon, offering competitive rates and flexible repayment options. Loans generally range from 50% to 80% of the vehicle’s value, with a repayment period of 1 to 5 years. On top of that, many financial institutions in UAE offer zero down payment options and insurance coverage.
Well, there are plenty of options regarding car loan providers in UAE, but we recommend exercising caution before going with a particular lender. Incidentally, a good car loan relieves you of thousands in interest, offers reasonable interest rates and payment options, and allows owning the car a smooth, bump-free ride.
So, gear up and get ready to learn about the best car loans in UAE.
Factors to Consider before selecting the best car loans in UAE
A car loan is a big commitment that might put an additional financial burden on you; therefore, picking the best car loan that is congruent with your financial standings is vital.
Here are the top criteria for selecting the best car loans in UAE;
- Interest rates and fees
The most crucial aspect of choosing a car loan is the interest rates and fees. Lower interest rates mean a significant reduction in total loan cost, making it more affordable in the long run.
Additionally, fees associated with car loans are another critical aspect you should never overlook. Be sure to compare multiple lenders to compare interest rates, fees, prepayment penalties, etc., to determine which lender provides the best value.
- Loan duration and repayment terms
Another crucial factor is the loan duration and repayment terms. Longer duration might lower the monthly installment amount but will increase the total interest paid over the loan lifetime significantly. Therefore, choosing a car loan with repayment terms that align with your financial footing is essential.
- Availability of flexible repayment options
A car loan with flexible repayment options guarantees that you can effectively manage loan repayment. Some lenders offer the facility to adjust loan repayment terms or make additional payments.
It allows the holder to tackle any financial difficulty that may arise during repayment. Therefore, pick a lender that offers multiple loan repayment options.
- The loan amount and the loan-to-value ratio
Next comes the actual loan amount and the loan-to-value ratio. The former signifies the actual loan amount you wish to borrow, and the latter represents the loan amount compared to the car’s true value. Consequently, the higher the loan-to-value ratio, the more upfront cost you have to pay to finance the vehicle.
More down payment will reduce the repayment amount and incur lesser interest charges; however, you have to commit a big amount upfront. Therefore, pick the car loan with the optimum loan-to-value ratio that aligns with your financial goals.
- Customer service and support
Lastly, it’s crucial to evaluate the quality of customer support and service quality before choosing a car loan. A lender with top-notch customer support will help you swiftly navigate the loan process and clear all your queries and concerns.
Likewise, ongoing support from a lender will help you effectively manage the loan and repayment. Therefore, pick a lender with a proven track record of quality support and faster response time.
Top 5 car loans in UAE
Let’s take a closer sending look at the top car loan providers in UAE. We will also detail their interest rates alongside the fees they charge, offering relevant details to make the selection process as simple as possible. Here is our list of the top car loans in the UAE.
- Emirates NBD
- Abu Dhabi Islamic Bank
- Al-Hilal Car Loan
- First Abu Dhabi Bank
- HSBC Bank Car Loan
1. Emirates NBD
At the top spot in our list sits the Emirates NBD, a renowned financial institution in Dubai with a range of quality financial services.
Emirates NBD offers flexible financing options for new and used cars with competitive interest rates and a streamlined application process.
Features and Benefits
- Offers up to 80% of the car value as the loan amount.
- Boast a faster loan approval process. You can easily obtain the loan amount if you have all the documents.
- Emirates NBD also offers same-day loan approval services. You can receive the loan amount in a single day if your document checks out.
- ENBD also offers a flexible repayment option to make the process as hassle-free as possible.
- Borrowers also receive free credit for the first year.
Interest Rates – Average Flat Rates for minimum 12 months tenor range from 2.69% to 4%
Processing Fee – 1% of the loan amount.
2. Abu Dhabi Islamic Bank
If you care about Shariah-compliant banking institutions, then Abu Dhabi Islamic bank will be the best choice for obtaining a car loan in UAE.
You can receive a loan amount of up to AED 1 million with flexible repayment options, lower profit sharing of only 2.59% as well as ADIB Motor Takaful protection for comprehensive coverage at low contributions.
Features and Benefits
- High loan amount of up to AED 1 million.
- Easy and flexible repayment option for as long as sixty months.
- ADIB motor Takaful protection for increased coverage and low contributions.
- Facility to post installments for up to a year.
- ADIB wheel deals connect you with the top car dealers in UAE.
Interest Rates
For a new car loan – starting from %2.59.
For User car loan – Starting from 3.09%.
Processing Free – 1% of the loan amount, with a maximum amount of AED 2500.
3. Al-Hilal Car Loan
If ADIB doesn’t impress you, there’s another equally competitive, sharia-compliant financial institution that provides quality car loans in UAE – the Al Hilal Bank.
With Al Hilal Bank, you are entitled to receive competitive profit rates, high finance amounts, flexible repayment tenure, and more amazing facilities. The best thing is you don’t need a salary transfer to obtain a loan with Al Hilal Bank.
Features and Benefits
- Joint income possibility between blood relatives to further simplify the loan process and repayment.
- Provide flexible loan tenure that can be as long as five years.
- Al Hilal also provides third-party vehicle registration on family members’ names.
- Shariah-compliant contract of Murabaha as well as Musawamah.
Interest Rates – 2.59% to 2.79% per annum.
Processing Fees – 1.05% with the highest fee amount of AED 2,625.
4. First Abu Dhabi Bank
First, Abu Dhabi Bank is another excellent option if you are considering taking out a car loan. FAB provides affordable car loans with competitive interest rates, low salary requirements as well as extended repayment periods.
On top of that, you can opt to begin paying the loan amount 180 days after loan disbursement to help organize your finances.
Features and Benefits
- Up to 80% loan amount of the total car value.
- Multiple loan options, like car loans for self-employed and salaried, as well as Etihad Guest car loans.
- You can pay the first installment after 180 days which can be a huge help to plan and manage your finances before the repayment period begins.
- High loan amount of up to AED 1.5 million – enough to get your dream car.
- Flexible repayment period, which can be stretched up to sixty months.
Interest rates – 3.44% pa for self-employed individuals and 3.19% pa for salaried people.
Application processing fee – 1% of the loan amount plus valuation fees for used cars.
5. HSBC Bank Car Loan
With a commitment to top-notch services and customer satisfaction, HSBC Bank is a viable choice for those seeking the best car loans in UAE.
Incidentally, HSBC makes it simple for individuals to get their dream car with their simple loan approval process, high loan amount, and lower interest rates.
Features and Benefits
· Arrangement fee discount of up to 25% if you purchase a plug-in hybrid or fully electric vehicle.
· Varying repayment options with the reduced amount if you change your car every 2 to 3 years.
· No salary transfer requirement to avail of a car loan from HSBC bank, UAE.
· No need to be an existing customer of HSBC.
Interest Rate – Flat 2.49% as well as 4.55% for reducing balance.
Fees – 1% of the loan amount plus 1% additional fee for early settlement. Besides, there’s an additional 1% charge for advance payment of installments.
Final thoughts on the best car loans in UAE
In conclusion, picking the right car loans in UAE can significantly impact the overall experience of owning a car. Incidentally, there are numerous car loan options in the UAE, including Emirates NBD, ADIB, and HSBC Bank, each with its unique features and benefits. You can also find some of the cheapest car loans in UAE in this list.
However, when seeking a car loan, it’s essential to evaluate interest and fees, repayment options, and loan tenure to ensure that they fit your budget and won’t stretch your financial standings.
That said, going with a car loan in UAE not only provides financial support for purchasing a vehicle but also peace of mind with added insurance coverage, no need to pay the full amount upfront, and the possibility of getting in touch with top car dealers.
Therefore, a car loan in UAE can be worthwhile whether you are a first-time buyer or seeking to upgrade your ride. Based on our research and understanding of the UAE loan market, ADIB Car Loan seems to be the best option, primarily for its high loan amount of up to AED 1 million, flexible loan repayment period of 60 months, and the added convenience of ADIB Motor Takaful protection.
Frequently Asked Questions
Yes. Most banks ask for a minimum salary of AED 5000 to be eligible for a car loan.
A car loan works by providing the borrower a specific percentage of the total car value which can be used to purchase the vehicle in concern. The borrower then repays the loan amount over a specified period with interest.
Interest in car loans varies from one bank to another. However, depending on the loan tenure, it generally remains between 2% and 4%.
Eligibility criteria also vary from one lender to another; however, in general, they require you to be;
· A UAE resident.
· Age over 21 years.
· Salary of AED 5000 or above.
· Good credit score.
The loan approval process typically takes around 2 to 7 days to complete; however, banks like Emirates NBD also offer a single-day loan approval.