Leaving UAE with Car Loan ?
A car loan can be a valuable financial tool that helps you turn your dream of owning a vehicle into reality. However, if you plan to leave the UAE, managing your active loan is essential to avoid legal or financial problems.
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Whether you are relocating for a new job, moving for family reasons, or shifting abroad permanently, an unpaid car loan can’t be overlooked. Ignoring repayments in the UAE can cause significant problems, including legal issues and travel restrictions.
To ensure a smooth transition, we have outlined everything you need to know about what happens if you’re leaving UAE with a car loan along with smart steps to manage it effectively.
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Can I Leave UAE with a Car Loan?
Leaving the UAE with car finance on a temporary basis is possible if you are paying the EMIs on time and have maintained a good relationship with the bank.
However, if you repeatedly default on your loan, the bank may take legal action, which could result in a travel ban and criminal case against you. Typically, the lenders can file a legal case for debts above AED 10,000.
In some cases, even if you’ve already left the Emirates, a travel ban could still be imposed. This potentially prevents your return to the UAE or restricts your transit through certain airports.
Missing consecutive EMI payments can lead several other grave consequences, like:
🟠International arrest warrant
🟠Legal action from the bank
🟠Negative impact on your credit history
🟠Car seizure by the bank
🟠Difficulty in obtaining future loans, and more
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As per the Central Bank of the UAE, you cannot borrow more than 80% of the car’s value. |
What to Do When Leaving the UAE with Car Finance?
Leaving the UAE with an active car loan requires careful planning to avoid legal and financial complications. Here is what you should do before relocating:
Pay Off the Loan in Full
This is the easiest way to leave the country without any difficulties. Contact your concerned bank for the outstanding amount (ask for a ‘liability letter’), settle the loan, and get a loan clearance certificate. This proof is essential in removing the mortgage on your car through RTA.
Sell the Car to Close the Loan
You can sell the car and leave the UAE if the buyer is ready to pay off the remaining debt amount directly to the bank. In such cases, it’s crucial to be transparent with the bank, as the bank will release the title so the car’s ownership can be transferred once you clear the liability.
✍️Note: It can be difficult to sell a car in the UAE without the lender’s permission. So, it’s important to inform the bank before selling the financed car.
Negotiate with the Bank
If you fail to make loan payments, the bank may pursue legal action against you, which may result in a travel ban and legal arrest. To prevent such situations, communicate with your bank or financial institution and declare insolvency, stating that you are unable to make loan payments. Reach a mutually agreeable solution by negotiating with them.
✍️Note: Make sure to provide all the supporting documents if you are filing for insolvency.
Early Loan Settlement
Many banks in the UAE offer Early loan settlement facilities. This allows you to leave the Emirates and pay off your auto loan before the specified term. However, the bank may charge a certain amount for this service, in addition to the principal and interest rate.
Tips to Leave or Exit the UAE Smoothly with an Auto Loan✨Plan your finances early, such as at least 2–3 months before leaving ✨Never abandon your car and flee — this may lead to a criminal case ✨Check your credit report from Al Etihad Credit Bureau (AECB) ✨Keep all communication with the bank in writing or email ✨Don’t ignore bank notices or court summons ✨Consider legal consultation to make the process hassle-free ✨Always collect a loan closure letter and mortgage release confirmation to validate the settlement |
Frequently Asked Questions
Ans: Yes, not paying the car loan amount leads to adverse consequences and directly impacts your credit score.
Ans: As per the UAE Central Bank, you can get a car loan with a maximum repayment tenure of 60 months, or 5 years.
Ans: Yes, it’s possible to leave the country with a loan. However, in the case of default, you can face adverse consequences.
Ans: You can face several adverse consequences in case of leaving the UAE with a car loan, such as a travel ban, legal action by the bank, a bad credit score, an arrest warrant, and more.
Ans: Yes, you can easily repay a car loan taken in the UAE even if you are residing in another country.
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