Buying a car is a dream many people hold. However, buying a car can be a tall order, especially if you have a meager salary. The good news is, banks in the UAE offer car loans, and you can now own a car by paying a small deposit.
Although many people still ask whether it is possible to get a car loan in UAE without making any down payment, it is essential to understand that it may not be effortless. In fact, to be precise, you cannot get a car loan in the UAE without a down payment.
Before you give up on this, we have prepared this article to give you all the details you need to know about UAE car loans. Read on to find out more.
What Is A UAE Auto Loan?
Auto loans are loans offered by financial institutions such as banks to help you purchase a vehicle. In the UAE, car buyers can finance their vehicle purchases through a dealer or a bank.
You have to go into a branch for bank loans and fill out an application form. The bank then does a credit check, approves your loan, and provides you with a loan at an interest rate determined by your credit score.
If you decide to take a UAE auto loan with a dealer directly, you will avoid the credit checks and get a lower interest rate.
How Much Down Payment Is Required In The UAE For A Car Loan?
Auto loans in the UAE usually attract a down payment of 20%. The payment is mandatory for all the bank auto loans you may be interested in.
Can I Get 100% Financing On A Car Loan In UAE?
Usually, you will get an 80% auto loan to finance your car in the UAE while paying a 20% down payment.
This is the most common deal across the many banks in the UAE. However, as we mentioned already, you can still get 100% car loan financing from other banks as well as from dealers across the state.
Some of the top lenders offering zero down payment car loans include HDFC bank car loan, ICICI bank car loan, and Axis bank car loan. There are, however, other terms and conditions you must meet to qualify for the 100% car loan financing.
Personal Loans And Down Payments In The UAE
Getting a personal loan in the UAE is one wise method of getting a car without a down payment. You only need to apply for a personal loan based on your salary and use the loan to buy a car.
However, if your salary is low, getting a personal loan may not help so much because the loan amount will be so tiny, considering the high cost of cars in the UAE.
Can I Make A Partial Payment To My Car Loan?Â
Since repossessing a car is not profitable to lenders, they want to take payments and work with you to get their money, and you get your vehicle. You should, therefore, reach out to your lender and explain why you cannot pay and that you would like to find another solution. So, yes, you can make partial payments.
Who Can Get A Car Loan In UAE With A Down Payment?Â
Generally, anybody can get a car loan in UAE with a down payment, provided they are employed and have a monthly salary. This is true for both nationals and ex-pats.
On the other hand, self-employed individuals can get car loans with a zero down payment provided they have a good credit track record, pay the loan processing fee, and the car loan does not exceed their net annual income.
Are Salary Transfers Required For A Car Loan?
No. Provided you have the minimum salary required, you do not need a salary transfer or guarantor.
How Does The Process Of Purchasing A Car With Down Payment Work?
If you qualify for a 20% down payment car loan, you only need to make an application to your lender and get your car when they approve it. You must, however, pass the qualification criteria provided by your lender.
Buying A Used Car With 20% Down payment
You can buy a car by paying the 20% down payment directly to your dealer or letting your bank settle the dealer. It, therefore, depends on your bank and whether you qualify for a 20% car loan or not.
How Used Car Dealers Offer 0% Down Payment In The UAE?
Some dealers offer zero down payment car loans in the UAE, but this is highly dependent on their qualification criteria. Therefore, you will have to meet the terms of the offer before you can qualify for the car loan.
Also, some dealers offer 0% down payment on promotional terms, which may be limited for short periods only.
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