A loan one takes in order for the person to acquire his/her dream car is Auto Loan. It is ideal for a person looking to buy a vehicle but does not have the means for it at this moment. Getting car loans has gotten much easier these days, as the installment rates have been lowered, hence the loan applicant does not feel burdened while repaying it. Some of the banks even make repayment easier by reducing the installments in the first year, so the customer does not experience too much of a financial burden during the initial days of owning a car.
Features of a Car Loan
- Based on the bank providing the loan, car loans can start from 30000AED and even go as high as AED 900,000.
- For most car loans, the repayment period can range from 12-60 months based on what you find comfortable.
- If you go in for a flat interest rate then you could end up paying as little as 2.35% per annum. This interest rate is dependent on the banks and may change from one bank to another.
- You can choose between flat interest rates or reducing balance interest rates, which tend to be a bit higher.
- You can even take a car loan to buy a used car.
- 80% to 100% of the money needed to but the car can be taken as a loan.
- The car loan can be availed by the residents and even expats working the in the UAE.
Benefits of Car Loans
Car Loans are not just a financial tool, they also contain certain privileges and benefits for the customer.
- Most Current Acoounts come with a minimum balance clause which cannot be violated. But banks are willing to waive that clause if you chose to take the car loan from them.
- Most banks will also offer a credit card without any charge for the first year.
- Car loans are applicable for all types of cars.
- Banks will also be willing to provide car insurance for a competitive rate.
- Staggered Investment Plans allows applicants to enjoy low economical installments which gradually increase over time.
Types Of Car Loans Available
- Conventional car loan with/without salary transfer
- The conventional car loan is the one where customers can apply for a car loans based on the maximum amount that the bank will offer. They can then pay back the loan over a period of up to, or more than, 60 months along with an interest rate. These loans can also be taken with or without a salary transfer to an account held with the bank.
Islamic Car Loans
Car Loans taken with consideration to the Islamic Banking rules are called Islamic Car Loans. In this situation, the bank buys the car on behalf of the client. The client or the loan applicant can then keep the car on lease and pay the bank in installments. Once the car is completely paid for, the bank will then transfer the ownership to the customer.
Car Loans without Down Payment: 100% Car Loans
While most banks offer only financing for a part of the cost of the car, there are banks that are willing to offer up to 100% of the cost of the car. These loans can even include the cost of the insurance for the car along with the actual price of the car.
Used Car Loans
Customers also have the choice to apply for a used car loan, if the applicant has decided to purchase a second hand car instead of a brand new one. The loan gets processed the same way as a regular car loan.
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