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How to Get a Car Loan in Dubai: All You Need to Know

Buying your car is possible for most people, mostly due to the easy availability of car loans and financing options. However, it is crucial to understand the requirements and paperwork before you plan to get a car loan. 

A car loan is one of the most popular modes of payment opts by many buyers in Dubai. Whether you want to buy a brand-new car or looking to finance a used one, it is essential to pick a bank wisely. This guide will explain how to get a car loan, what documents are required to get a used car loan, and the rules and regulations related to these loans.

Documents Required 

Many banks in the emirate have different criteria for approving an auto loan in Dubai. Here is the list of the following documents that are required to get a car loan in Dubai:

• Original ID
• Salary certificate/proof of income
• Valid passport/visa
• Driving license
• 3-6 months of bank statements
• Valuation certificate of the car
• Insurance policy documents
• Car’s registration

Expats who are interested in applying for a loan should cross-check the validity of their home country’s driving license in the UAE. If your driving license is invalid, then you need to apply for a UAE driver’s license to become eligible for car financing.

Also, expats are required to provide a home address in their home country no matter how long they have been living in the UAE. The bank may also require a reference from a friend or family member. 

Minimum Salary and Age 

A borrower needs to be 21 years old to apply for a loan in Dubai. The minimum salary requirement varies from bank to bank but generally, it must be AED 5,000 or above. Do check with a few banks to see if you fulfil the requirements. 

Repayment Tenure 

In Dubai, some banks offer a repayment tenure is up to 60 months and for used cars, the maximum tenure depends on how old the car is. However, for older cars, the repayment period can be even shorter. For instance, you may have a repayment term of two years for a 10-year-old model.

Minimum Amount for Car Loans

Most banks only finance 80% of the car’s value; however, you need to pay a 20% down payment in advance. In some cases, the bank takes the down payment, while some banks ask to settle the down payment directly to the car owner before the bank finances the 80% amount. Also, some banks specify the minimum car financing amount, which is roughly AED 20,000. Also, to qualify for a loan, the car you are planning to buy must be valued at a minimum of AED 25,000.