Do banks in Dubai offer used car loans?
We live in a time where almost everyone from every income class has a car. There is no lack of cars in the market and even with the tech crunch, the automobile pipeline continues to produce cars at breakneck speeds. Despite this, rising inflation rates and the growing pains of a household mean that not everyone can buy new cars.
For this very reason, we have a thriving used car market. There are a plethora of options available and everyone can get their desired cars. Even luxury cars end up in the used car market. This statement is especially true for cities like Dubai where the affluent often choose to shop for luxury cars in the used car market to save a fair few.
So, with a thriving car market, both used and new, it is only natural that banks will offer loans. And getting a car loan in Dubai is perhaps far easier than almost anywhere in the world. That being said, the rules around used car loans in Dubai are slightly different.
And it also differs from bank to bank. This article is a handy guide to a used car loan in Dubai, where to get them, and the features and benefits that come along with getting a used car loan.
Can you finance a used car in Dubai?
Yes! You can finance a used car in Dubai. With several income classes wanting to buy a car and a thriving market, banks across the United Arab Emirates have made it possible to finance a car.
As banks understand that gathering the amount of money required for a car is a tough ask for most people, financing agreements are given out even for used cars. A car loan in Dubai is among the cheapest loans offered by banks and requires the least documents for approval. This is also true for a used car loan in Dubai, however, the procedure and interest rates are slightly different.
What is the interest rate for used car loans in Dubai?
The interest rate for car loans itself varies and depends on a multitude of factors. For a
used car loan in Dubai, the difference is even starker. For starters, the rate of interest on used car loans is higher than what you get if you had to purchase a brand-new car from a showroom.
Moreover, the rate of interest varies from bank to bank. And you will also need to supply the right details about the used car showroom before you make the purchase. If you want to apply for a car loan in Dubai, and specifically for a used car in Dubai, the vehicle must not be older than 5 years. But the good news is the documentation for the loan will take up to a week.
What is the eligibility for a used car loan in the UAE?
There are namely four boxes that you have to tick when applying for a used car loan in Dubai. Let’s take a look:
- Age: For a car loan in Dubai, UAE you need to be over the age of 21 years. And the maximum age for used car loan eligibility is the age of 65 years.
- Income Requirements: The minimum income requirement for a used car loan in Dubai
Is AED 5,000 for salaried individuals. For self-employed individuals and business owners, the criteria are different.
- Down Payment Requirement: According to the Central Bank, an individual has to make a down payment of roughly 20% of the current market value of the car to purchase it.
- Credit Score: Another important requirement is you need to have a good AECB Credit Score for loan approval. A good threshold is a score of 700 and above. Anything above that and you will get instant approval.
Which banks provide used car loans?
With interest rates as low as a measly 3.5% ADCB Bank ranks among the best when it comes to used car loans. They also offer a hefty maximum amount of 1.5 million AED for loans. With a low processing charge of 1% and up to 80% of the loan amount against the car value available, ADCB remains among the best places for used car loans in Dubai.
One of the largest banks in the UAE, Emirates NBD is a great place to get used car loans. They also offer a good maximum amount of up to 500,000 AED for loans. With a low processing charge of 1% and up to 80% of the loan amount for private vehicles, a whopping 90% for company vehicles, and 75% for sports cars, it is a great place to avail of a used car loan. What’s more, you get one-day approval!
Dubai Islamic Bank
Dubai Islamic Bank is among the largest Islamic banks in the world and is one of the best when it comes to loans, not just used car loans. They have a big maximum amount of up to 1.5 million AED for loans and have a 1% processing charge.
Abu Dhabi Islamic
Abu Dhabi Islamic bank offers variable interest rates depending on the credit score of the individual. There is, however, a minimum income requirement of 5000 AED to avail of a car loan.
First Abu Dhabi Bank
First Abu Dhabi Bank is among the biggest banks in the world, which makes them a safe bet for used car loans. They also have low-interest rates ranging between 1.99% to 5.6%, depending on the candidate’s country of residence and employment status.
With interest rates starting from 1.99% and being among the oldest banks in the UAE, RAK Bank offers a range of options that make it a great option for a used car loan in Dubai.
Disclaimer: The information provided in the blog is for general informational purposes only. All information is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the site.
So, there you have it, your answers to all things car loan in Dubai and particularly, a used car loan in Dubai. It is easier than in most places to get a loan for a used car and with the market offering a range of great cars, it is a no-brainer to get the loan.
- September 23, 2022