- Dubai, UAE is a popular destination for tourists or professional employees.
- Hence, the needs of everyone are varied which makes this post really important.
- Here are some key factors to consider before taking a car loan.
Here are some key factors to consider before going for a car loan in Dubai. Dubai is home to a lot of migrant population that is in the city for varied durations. Hence, there could be a few options while considering how to buy a new car. There is the traditional way of going for loans or the relatively new way of leasing. The latter makes sense for those who are there for a short amount of time. But for the majority of others, going for a bank loan is the only way. Here are some things to consider before applying for a loan to buy a car.
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Tips Before Car Loan in Dubai
We are considering Dubai because it is the financial hub of the UAE. Banks will tempt you into going for the loan straightaway with attractive offers and interest rates. However, you must shop around and research a bit with other banks, lending institutions, and even dealerships to get the lowest interest rates. This would ensure that you the best rates from the bank or even discounts from the dealership. Thereafter, you need to ascertain the terms of the loan because some banks charge a penalty for early repayment.
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Additionally, most banks in the UAE offer a maximum repayment duration of not more than 60 months (5 years). Additionally, a bank would want the potential car buyer to pay 20% amount of the car as a down payment. Hence, the loan amount will be the remaining 80%. Then there is this rule of the minimum loan amount to be at least Dh 20,000. Therefore, the car must be around Dh 25,000 and after paying the 20% down payment, the bank will lend the rest of Dh 20,000 as a loan.
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Finally, the EMI should be less than half your salary. This includes all the other EMIs that you might be paying including credit card payments, etc. All these factors must be taken into consideration before buying a car in Dubai. These will help you make the best decision in terms of which cars to opt for, what kind of interest rates to look for and what are the repayment options. Do share your thoughts with us on this.
