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Whether it's for your first car or upgrading your vehicle, here's what you need to be eligible and to apply for a car loan in Dubai
13 August 2024
| Last updated on 14 August 2024
Ready to drive your dream car?
Getting a car loan in Dubai can be a straightforward process if you know what are the requirements and the steps involved.
Whether you're a first-time buyer or looking to upgrade your current vehicle, understanding how to get a car loan in Dubai is crucial for your financing. This guide will walk you through everything from checking your credit score to choosing the right lender and getting pre-approved.
By following these steps, you'll be well-equipped to navigate the car loan process in Dubai, ensuring you get the best deal possible and drive away in your dream car with confidence.
Here are the typical requirements to get a car loan in Dubai. We do recommend checking with your bank, as additional requirements may vary.
1. Meet the Minimum Age and Salary Requirements
What is the minimum age to apply for a car loan in Dubai?
To be eligible for a car loan in Dubai, the borrower must be at least 21 years old.
What is the minimum salary requirement for a loan in Dubai?
The minimum salary requirement to apply for a car loan in Dubai is typically AED 5,000 or above. However, this varies depending on the lender so we recommend inquiring with a few banks to see if you meet the minimum salary requirement.
2. Documents Required to Get a Car Loan in Dubai
The list of documents needed to apply for a car loan in Dubai tends to vary by bank. Regardless of the different paperwork, some are standard - check out the list of documents you can expect to prepare:
- Valid Emirates ID card or UAE Residency Visa.
- Salary certificate as proof of income.
- Valid passport document.
- Valid UAE Driver's License.
- 3-6 months bank statement.
- Valuation certificate for the car.
- Car's insurance policy.
- Car registration.
Can I use a different country's driving license?
UAE residents who possess a valid driving license from another country are advised to check if it's valid in the emirates. If the country's driving license is invalid in the UAE, then a UAE driver's license is required.
Below is a list of countries where the local driving licenses are valid in the UAE:
- Austria
- Australia
- Bahrain
- Belgium
- Canada
- China
- Denmark
- Finland
- France
- Germany
- Greece
- Hungary
- Hong Kong
- Ireland
- Italy
- Japan
- Kuwait
- Latvia
- Lithuania
- Luxembourg
- Netherlands
- New Zealand
- Norway
- Oman
- Poland
- Portugal
- Qatar
- Romania
- Saudi Arabia
- Serbia
- Singapore
- Slovakia
- South Africa
- South Korea
- Spain
- Sweden
- Switzerland
- Tukey
- United Kingdom
- United States of America
What if my country's driving license is not valid in the UAE?
If your country's driving license is not included in the list above, then you will need to secure a UAE driver's license to be eligible for a car loan.
3. Determine the Budget For the Car
How much can a bank loan you?
When it comes to car loans in Dubai, many banks can lend up to 80% of the car value - and a 20% down payment is usually required from the borrower.
Is there a minimum value for the car?
Some banks in the emirates have a minimum financing amount for the car loan, which averages around AED 20,000. To qualify for a car loan in Dubai, we recommend that the vehicle you're interested in purchasing should be valued at a minimum of AED 25,000.
It's important to calculate your budget for the car - how much you can afford to borrow from the bank and repay without struggling with your finances.
We recommend exploring different UAE banks to find the best rates, different down payment options, etc.
Do UAE banks offer car loans for used cars?
Several banks in Dubai and the UAE offer car loans for new or used vehicles, and some also offer specific loans for electric and hybrid car models.
4. Check the Interest Rate
It's important to take into account the different interest rates for car loans in Dubai, to ensure that it's a rate you can pay back comfortably.
What is the average interest rate for car loans in Dubai?
In Dubai, banks offer car loans at an average interest rate of 3%, however the actual interest rate you'll get can vary based on several factors including:
- The bank / lender.
- Your credit score.
- Type of loan.
For example, borrowers with good credit scores may get a lower interest rate at 2%, whereas individuals with poor credit scores may see higher interest rates at 5% or more.
5. Inquire With the Right Banks
If you're looking to secure a car loan in Dubai, it's crucial to borrow from a reputable bank instead of lenders who offer cheaper rates that may seem too good to be true.
The following UAE banks offer car loans in Dubai and are trusted sources, offer various options, as well as competitive interest rates.
- Dubai Islamic Bank.
- Emirates NBD Bank.
- First Abu Dhabi Bank.
- Mashreq Bank.
- RAK Bank.
Compare Your Options
For car loans in Dubai, carefully consider the options available to you by inquiring with banks, comparing the different interest rates they offer, and research the duration of the loan term.
Longer loan terms may see lower monthly payments, but these may involve more interest to be paid over the loan's extended period.
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