Your guide to getting a Dubai car loan in 2024

Interest rates of top banks range from 1.99 to 3.99 percent per annum
Your guide to getting a Dubai car loan in 2024
Having a car offers several benefits

According to estimates from S&P Global Mobility, 88.3 million new vehicles could potentially be sold globally in 2024.

In Dubai, despite being a city with a robust public transport system, the appeal of owning a car is far from waning. In fact, Dubai’s array of accessible car loans and car-friendly infrastructure boost this appeal further.

If you dream of owning your own vehicle, this article will give you the information you need on Dubai car loans.

What’s the eligibility for Dubai car loans

Bank financing is one of the most popular methods of purchasing a car. In this setup, you will apply for a car loan from a bank, pay a certain amount of downpayment and settle the remaining balance — plus interest — over a set period.

In Dubai, many reputable banks offer car loans. But before you can avail of such services, you must first meet eligibility requirements. While these vary from bank to bank, the list generally includes the following:

  • You must have a valid Emirates ID
  • You must have a valid passport and visa
  • You must have a valid UAE driving license (If you’re an expatriate, check if your driving license from your home country is accepted. Otherwise, you must first get a driving license in the UAE.)
  • You must be at least 21 years old
  • You must earn a minimum salary (In some banks, the minimum monthly salary is AED3,000 to AED5,000.)

When applying for bank loans, you will also be required to present salary certificates and bank statements in the past three to six months as proof of income. If you’re self-employed, you must present trade licenses and bank statements.

Some banks also require a valid quotation of the car make and model you plan to buy. These are some of the common requirements. Some banks may require additional supporting documents to process the car loan application.

How car loans work in Dubai

In the city, most banks finance 80 percent of a vehicle’s value. Therefore, you must shoulder the remaining 20 percent. In some cases, you will pay this 20 percent to the bank. In other instances, you will have to pay it directly to the car dealership or seller.

Banks also often have a minimum loan amount of AED20,000. They also require that the car you buy be worth at least AED25,000.

The repayment period for new cars in Dubai usually spans 60 months. If the vehicle is pre-owned, the repayment term is shorter.

business bank account

How to compute your monthly payments

When financing your car purchase, you must pay an Equated Monthly Installment (EMI). The formula for this is EMI = [P x r x (1+r)^n] ÷ [(1+r)^n – 1]. P refers to the loan amount; r is the monthly interest rate; n is the number of monthly installments.

So, if you’re buying a car worth AED25,000, and you’re borrowing AED20,000 for a 2 percent annual interest (equivalent to 0.167 percent monthly interest rate), then your EMI is approximately AED350.56.

Read: UAE mortgage rates guide for 2024

Interest rates of Dubai car loans

Dubai’s banks offer accessible car loan products. Here are some available car loans you can consider, with interest rates ranging from 1.99 to 3.99 percent per annum. Please note that the following details are based on publicly available information. Check with your preferred bank for the latest rates.

Bank/Institution Flat Rate Min. Salary Required Down Payment Ratio
ADCB – Car Loan 1.99 percent AED5,000 20 percent
ADIB – New Car Finance – Murabaha 2.59 percent AED5,000 20 percent
ADIB – Used Car Finance – Murabaha 3.25 percent AED5,000 20 percent
Ajman Bank – Exotic Car Finance 2.74 percent AED40,000 20 percent
Ajman Bank – Individual Standard 3.05 percent AED5,000 25 percent
Ajman Bank – Used Car Loan 3.10 percent AED5,000 0 percent
Ajman Bank Car Finance 2.45 percent AED5,000 20 percent
Arab Bank Auto Loan 3.99 percent AED7,000 20 percent
Commercial Bank of Dubai – Tamweel 2.18 percent AED8,000 20 percent
Dubai Islamic Bank – Al Islami 2.35 percent AED3,000 20 percent
Emirates Islamic – Green Auto Finance 2.49 percent AED15,000 20 percent
Emirates NBD – Auto Loan For Used Cars 2.99 percent AED4,000 20 percent
FAB – Car Finance For Expatriates 2.59 percent AED7,000 20 percent
FAB – Islamic Car Finance 2.35 percent AED7,000 0 percent
HSBC – Car Loan 2.49 percent AED10,000 20 percent
NBF Auto Loan 2.50 percent AED5,000 20 percent
Noor Bank Auto Finance 2.64 percent AED8,000 20 percent
SIB Car Finance 2.99 percent AED8,000 0 percent
Simplylife – Car Loan from ADCB 3.19 percent AED5,000 20 percent
United Arab Bank – Auto Loan 2.99 percent AED7,500 20 percent

Final thoughts

With Dubai’s array of car loan products, you can make your wish of owning a vehicle a reality. These loan offerings allow you to spread out your car expenses and improve your credit score in the process. Before getting one, make sure to consider your financial capacity in the long run. Choose a loan product that suits your profile and your preferences. Ultimately, ensure that you pay all your monthly obligations, as each payment moves you closer to the full ownership of the car.

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