Introduction to the Car Loans in Dubai
Dubai is a city that has emerged as one of the most popular business hubs in the world. With so many people moving to the city for work, it has seen a steady increase in the demand for cars which has led to more and more car loans being taken to purchase said cars. If you are looking for car loans in Dubai then you can rest assured that you will be spoiled for choice.
Types of Car Loans in Dubai
There are two types of auto loans in Dubai. The first is the conventional car loan and the other is car Ijarah which works on the principle of hire purchase. The conventional car loan is a loan where banks fund up to 80% of the amount needed for the car. The remaining 20% is paid as the down payment by you. This loan is available with most banks in Dubai and comes with competitive interest rates that can range from 2% per annum to 7.5% per annum. Even the loan amounts offered are quite high so as to cover most of the cars you’d want.
In the case of car Ijarah, it is a car loan that is designed to be compliant with the rules of Islamic banking. the best thing about this loan is that there is no down payment required which makes it ideal for those who might not have the funds, needed for the down payment, at hand.. Under this scheme, the bank purchases the car on your behalf and then rents or leases it out to you for a specific amount every month. This arrangements continues for a fixed period of time, at the end of which you can buy the car from the bank for a nominal sum.
Features and Benefits of Car Loans in Dubai
There are some distinct advantages of taking a car loan in Dubai. They start with the loan amounts that banks are willing to afford to customers. This loan amount can range from AED 500,000 to even as high as, AED 1.5 million. Banks also offer customers the choice of having their salaries transferred to accounts held with these banks, though this is not mandatory with most banks. Another advantage customers get with a car loan is that the tenures can be as long as 5 years and even longer with some banks. The interest, in most cases, is fixed and charged on the reducing balance of the loan. The documentation tends to be simple and some banks also offer services like help with funding for the insurance of the car and traffic registration.