Car Loan Interest Rates in UAE

What is a Car Loan in the UAE? 

A car loan is a financial tool that helps you buy a car without paying the full cost upfront. With this type of loan, you borrow a certain amount of money at a pre-decided interest rate set by the lender and repay the amount in the form of monthly payments. 

Since the car you purchased worked as collateral, this type of loan can also be called a secured loan. This means if the repayments are not made as agreed, the lender has the right to repossess the vehicle. 

One of the most important aspects of car financing is the car loan interest rate, as it directly impacts your repayment amount (also known as EMIs) to the lender. This can be different from one lender to another. 

Top Car Loan Plans in Dubai

Best Auto Finance Interest Rates in the UAE

Here is the list of top auto loans with low interest rates in the UAE:

✍️Note: Interest rates fluctuate based on market conditions, lender policies, and other factors. To ensure you have the most accurate information, check the bank’s official website or contact them directly.  

Documents Required to Get the Lowest Interest Rate Car Loan 

Here is the complete list of documents you need to submit while applying for an auto loan at a low interest rate: 

✔️Emirates ID

✔️Passport

✔️Residence visa (for expatriates)

✔️Salary certificate 

✔️Current bank statements 

✔️Driving licence

✔️Car valuation certificate (typically for second-hand cars)

✔️Title of ownership for second-hand cars

Note: The respective bank may ask for some additional documents, so be ready to submit those. Plus, make sure to submit valid documents to ease the loan process.

How to Secure Auto Loans with Low Interest Rates? 

To get the best vehicle loan interest rates, follow these smart strategies: 

Improve Your credit Score

A high credit score shows lenders that you’re responsible with money. To boost yours, pay bills on time, reduce debt, and avoid new credit cards. A score above 750 can help you get better loan offers with lower interest rates.

Compare Loan Offers

It’s not necessary that your first auto finance interest rates are lower and the best deal for you. Check with banks, financial institutions, and online lenders to compare rates. Even a small difference in interest can save you a lot of money over the loan term.

Make a Bigger Down Payment

A higher upfront payment reduces the amount you need to borrow. This lowers your risk for the lender and helps you get a lower interest rate. 

Typically, you are required to pay at least 20% of the car’s price as a down payment. However, you can go beyond and voluntarily increase this payment.

Choose a Shorter Loan Term

Short-term loans usually have lower interest rates than long-term ones. Though the monthly payment may be higher, you’ll pay less overall. 

While choosing a repayment period, make sure to balance the monthly instalment against the total interest applicable. 

Get Pre-Approved

Pre-approval from a bank or lender helps you understand your budget, preventing overspending. This shows dealers you’re serious. It helps you negotiate better and prevents you from getting stuck with high dealer interest rates.

Things to Keep in Mind While Applying for a Car Loan in the UAE

There’s no shortage of available auto loan options in the UAE, but it’s difficult to narrow down your choices and find the right one. By keeping the following tips in mind, you can get the lowest car loan rates: 

👉Make sure you meet the bank’s minimum salary, age, and other requirements

👉Know the difference between flat and reducing interest rates before choosing a loan

👉Be ready to pay at least 20% of the car’s value as per UAE regulations

👉Look out for processing fees, insurance costs, early settlement, and late payment penalties of the selected bank

👉Use car loan calculators to estimate the monthly payments for better financial decisions

👉Understand all the loan agreements before signing and availing the loan amount

Where to Get the Best Car Loan Interest Rate in the UAE? 

At Paisabazaar.ae, you can get a car loan at the lowest rates by comparing various finance options from the top banks. Follow the steps mentioned below: 

1️⃣Go to the homepage and click on the ‘Car Loan’ option 

2️⃣Fill out the lead form with the required information

3️⃣Get the quote page and compare all the loan options

4️⃣Choose the  best auto interest rates that fit your budget

It’s done! Soon, you will receive a call from our representative who will guide you further. 

Frequently Asked Questions