HSBC Car Loans in the UAE
HSBC has been a leading financial institution in UAE and is among the largest banking institutions in the world. HSBC caters to customers across different segments and cater to personal banking as well as corporate, business and investment banking. HSBC also offers its services in wealth management. HSBC’s presence in UAE can be traced as far back as 1946 and in the 1950’s they began their regional expansion. HSBC offers a range of comprehensive banking products and solutions and among these, the car loans provided in the UAE are a popular offering. Purchasing a car may be the result of fulfilling a goal of owning a dream car or may be a result of necessity to get from point A to Point B.
You’re probably eligible for HSBC Car Loan if you are
At least 21 years old
Less than 65 years old
Salaried or self-employed
with regular income
Earn more than the minimum
Your HSBC Car Loan amount eligibility is based on these factors
Minimum income required
AED 7500 per month
Loan capped is AED 918,000 of the Ex-Showroom price of Car value
EMIs of other loans lower
Increase your eligible HSBC Car Loan amount by these steps
Pay off your credit card bills
Choose longer tenure loan up to 5 years
Documentation needed to apply for an HSBC Car Loan
- 1. The applicant has to have an Emirates ID that is valid.
- 2. A copy of the applicant’s passport has to be submitted to the bank and in case of expatriates, a UAE visa is to be provided.
- 3. The process also requires a xerox of the applicant’s driving licence.
HSBC Car Loan Interest RatesUpdated on 21 Oct 2016
|New Car Loan – Flat Rate||2.49% p.a.|
|New Car Loan – Reducing Balance||3.49% p.a.|
|Used Car Loan – Flat Rate||2.49% p.a.|
|Used Car Loan – Reducing Balance||3.49% p.a.|
|Application Fee||1% of Loan Amount (AED 500 – AED 2500)|
|Pre-payment Fee||1% of the remaining loan amount|
The car loans offered by HSBC allow borrowers to purchase their desired car regardless of whether they are brand new or pre-owned. The features and benefits of the car loans from HSBC are as follows.
Types of Car Loans offered by HSBC
HSBC offers three types of car loans in the UAE:
- Car loans for New Cars
- Car loans for Pre-owned Cars
- Car loans with Balloon Payment Option
Car Loans for New Cars
As the name suggests, this loan is designed for borrowers who wish to purchase a brand new car. The new car loans have a higher loan amount available and are also packed with value added features which are as follows:
- The maximum loan amount available under this type of loan is AED 918,000 based on the eligibility of the candidate.
- Tenures of new car loans have a minimum tenure of 1 year and a maximum tenure of 5 years.
- The borrower must make a down payment of 20% of the value of the car and the remaining amount can be availed through the loan.
- The time taken to process the loan is quick and those applicants who apply for a car loan online will get a call back within 30 minutes if the application is made within the window of 8:30 AM to 4:30 PM between Thursdays to Sunday. Applications made outside this timeframe will receive a call back within the next working day.
- The HSBC new car loan does not require the borrower to open up a new account with HSBC.
- The interest rate available on this loan is 2.49% per annum and is equivalent to the value of a reducing balance rate applied at 441% per annum.
- This loan can be availed to purchase any kind of new saloon or four wheel drive vehicles. The loan can be availed for purchase of new motorcycles as well. Saloons and four wheel drive automobiles are provided with a competitive motor insurance rate.
- Aspiring candidates who apply for the new car loans will have a dedicated sales specialist assigned to them for ease of availing the loan.
- Repayment can be done without the need for a mandatory salary transfer.
Car Loans for Pre-Owned Cars
This loan is designed for seasoned drivers looking to purchase a preowned car and comes with added benefit of lower down payments and a relatively lower monthly instalment. The purchase of pre-owned cars are on the rise as cars are often seen as a depreciating asset and hence many people are reluctant to purchase brand new cars. The features of preowned car loans are as follows:
- Applicants applying for a loan on Thursdays to Sunday within 8:30 AM to 4:30 PM receive a call back within 30 minutes. Applications made outside this time frame receive call back on the next working day.
- The maximum loan amount available under this loan is AED 918,000 and has a minimum tenure of 12 months with a maximum tenure of 5 years.
- The loan is available for all kinds of automobiles including preowned motorcycles. The loan can be used to purchase saloons as well as four wheel drive automobiles and offers an insurance rate for these automobiles at very competitive rates.
- The down payment needed to be made for the preowned car is 20% and the remainder of the amount will be financed by the loan.
- The loan comes with an interest rate of 3.99% per annum and is equivalent to the reducing balance rate applied at 4.41% per annum.
- The applicant is not required to open an account with HSBC to avail this loan nor is it mandatory for the applicant to make salary transfers during repayment.
Balloon Payment Option Loans
The balloon payment option loans is a type of new car loan wherein the borrower needs to make smaller monthly instalments and one large lump sum payment during the end of the loan tenure. The balloon payment option is fast becoming a popular choice as it allows for smaller EMI’s that are easier for the borrower to plan their budget around. The features of this loan are as follows:
- The applicant can avail this type of payment option only on new cars
- The loans offer smaller monthly instalments that allow the borrower to manage their finances more efficiently and makes the loan more affordable.
- The tenure of loans with balloon payment options range from 1 year to a maximum of 4 years.
- The maximum loan amount available under this option is AED 918,000
- The interest rate of this loan is 2.49% per annum and is equal to the reducing balance rate charged at 4.41% per annum.
- Applications for this loan made from Thursdays to Sunday between 8:30 AM to 4:30 PM receive a call back within 30 minutes and applications made outside these timings receive call back on the next working day.
- The loan repayments do not require the mandatory transfer of salary and the loan can be availed without the need for opening an account with HSBC.
- The balloon payment is a lump sum owed at the end of the loan tenure and is 70% of the loan amount at the end of a 12 month term, 65% of the loan amount at the end of a 24 month term, 45% of the loan amount at the end of a 36 month term and 30% of the loan amount at the end of a 48 month term.
Eligibility Criteria for HSBC Car Loans
- The minimum age of the applicant must be 21 years as at last birthday.
- The maximum age of the applicant cannot exceed 65 years.
- The applicant must earn a minimum income of at least AED 7,500 on a monthly basis.
- The applicant must be a UAE national or a resident expatriate.
Fees and Charges for HSBC Car Loans
The below table displays the schedule of fees and charges involved in HSBC Car Loans
|Type of charge||Amount for New Car Loan||Amount for Pre-owned Car Loan||Amount for Balloon Payment Option|
|Charge for Application||1% of the loan amount with a minimum charge of AED 500 and maximum charge capped at AED 2500||1% of the loan amount with a minimum charge of AED 500 and maximum charge capped at AED 2500||1% of the loan amount with a minimum charge of AED 500 and maximum charge capped at AED 2500|
|Charge for Early Settlement||1% of the remaining balance of the loan||1% of the remaining balance of the loan||1% of the remaining balance of the loan|
|Fees for Advance Payment of Instalment||1% of the payment made in advance||1% of the payment made in advance||1% of the payment made in advance|
Documents Required for HSBC Car Loan
Applicants based on their nature of employment need to submit certain documents. These are given below.
For Employed applicants purchasing new or used automobile from an authorized dealer:
- The applicant must provide a completed application form along with a valid Emirates ID, a copy of the valid UAE driving license and a copy of their valid passport. Applicants who are expatriates will also need to provide a copy of their valid UAE Visa.
- The applicant must provide the salary slips dating back at least three months at the time of applying for the loan and show the bank statement reflecting the salary credit. This may need to date back for a longer period if the applicant has a history of returned cheques.
- The applicant must provide a salary certificate if salary is assigned to any other bank apart from HSBC and is also required to provide an undated cheque from the salary account as a form of security.
For Self-Employed applicants purchasing a new or used automobile from an authorized dealer:
- The duly filled application form along with a valid Emirates ID, a copy of the applicant’s passport and driving license and if the applicant is an expatriate, then a copy of the valid UAE Visa.
- The applicant must provide bank statements of both personal accounts as well as business accounts.
- The applicant must provide a copy of the audited financials of the business along with an undated cheque from the main business account or operating account as a form of security.
- In addition, the bank may request on an individual basis, the documents pertaining to the business or association such as a trade license copy, the passport copies of business partners, articles of association and other additional documents.
Car loans from HSBC in the UAE are available at nominal interest rates and very simple terms and conditions. In order to proceed with the application form, one needs to download and fill up an agreement form along with providing the requisite KYC documents.
The form has sections written both in English and in Arabic in two different columns. The loan agreement number is to be mentioned at the top of the document by the bank officials. The next detail on the form is about the date on which the agreement is formed and the parties involved, the primary one being HSBC Finance and the secondary being the customer. The customer portion needs to have the name, address, Emirates ID number and contact number of the customer.
Post the portion wherein the customer details have to be filled in, the definitions and terms in the agreement are specified as per the bank’s interpretation. Force majeure clauses, costs, rates and authority figures are also defined in a similar manner.
Validity of Loan Agreement
The loan facility will be valid only if the following documents are received by HSBC within 30 days of the submission of the application –
- Duly filled and signed application form submitted by the customer.
- Duly filled and executed mortgage submitted by the customer.
- Submission or presentation of a guarantee that is approved by HSBC.
- Miscellaneous documents required by HSBC.
A letter of purchase can be provided by the bank if the customer wishes to have the vehicle released before the registration is done and the payment to the seller is made.
A drawdown clause is also mentioned and it needs to happen if a loan process is to be carried out in its entirety. For the same, the following documents should be received by HSBC before 30 days of issue of the loan facility else the loan facility will be deemed expired –
- A letter of purchase order acknowledged by the seller if requested in advance
- A registration card of the vehicle confirming the ownership status
- An insurance policy for the vehicle in question with HSBC as the first beneficiary
- Other requisite documents as deemed necessary by the bank
Withdrawal from the agreement can only be done before the drawdown is completed and the vehicle handed over to the customer.
Payment and Prepayment of HSBC Car Loan
The payment clauses are the sections that follow the validity terms. The payment might require the customer to set up a bank account with HSBC wherein direct debit of the payments can be made. In case there are already multiple accounts of the customer with HSBC, there might be an agreement to sign which will allow HSBC to debit payments from all owned accounts. An undated security check needs to be provided from the customer to HSBC that will cover the total amount of the loan as well as the interest of the facility.
In case of prepayment, the customer must give HSBC a written intimation at least 7 days before the next instalment is due. If not specified otherwise, any advance payment will contribute towards the principal payment of the loan.
Clauses for Interest Rate on HSBC Car Loan
Interest charged on the loan is calculated daily by HSBC and operates on a reducing balance scheme. Interest is to be paid regularly throughout the period of the loan as per the rates that have been laid down by HSBC.
Late Payment Clauses for HSBC Car Loan
Interest due but unpaid on any instalment amount will be calculated regularly by HSBC and need to be settled on priority basis. In such cases, any payments made by the customer will first be used to clear of the due interest and associated late payment fees and the remaining amount used to pay the interest and principal portions of the next instalment.
Fees and Expenses associated with HSBC Car Loan
Any miscellaneous fees and charges associated with the processing of the loan and dealing with losses, damages, actions, suits, proceedings, accounts, claims, expenses, costs and demands on behalf of HSBC need to be settled by the customer.
Termination pertaining to HSBC Car Loan
HSBC retains the right to terminate a car loan agreement in the event of the occurrence of any or all of the following situations –
- Non-conformation of the rules and regulations by the customer
- Non-payment of dues on loan amounts by the customer
- Incomplete or misleading information provided by the customer
- Insolvency declared by the customer
- Threat to the vehicle or assured security provided by the customer
- Failure of the customer to maintain insurance for the vehicle
- Death or imprisonment of the customer
- Sale, transfer or any such purported activity on behalf of the customer pertaining to the car
Insurance Clauses for HSBC Car Loan
Insurance on the loan asset in question, or the car, is to be maintained by the customer at all times throughout the active period of the loan. Under special conditions, HSBC may allow the seller to arrange for an insurer to insure the car upon the request of the customer.
The customer might also be required to purchase a life insurance policy and assign the benefit to HSBC under certain circumstances.
The customer will be liable to pay HSBC for any and all of the following, if they should ever occur –
- Loss or damage to the vehicle
- Loss, expense or damage borne by HSBC due to claims made by any third party pertaining to the usage or state of the vehicle
- Costs and/or expenses borne by HSBC during the repossession of the vehicle (as the case may be)
The car loan application available with HSBC for individuals is a simple 2-page form that needs to be filled in with the personal, professional and financial details of the customer. The relevant sections of the form are mentioned in the following points –
- Personal Details– This deals with information like name, government-accepted identity proof and nationality status of the customer
- Residential Address in UAE– One needs to choose if their residence in UAE is rented, owned or company-owned and provide the complete address
- Permanent Address in Home Country – The address details of the residence in one’s home country also needs to be furnished
- Alternative Contact Details – Herein, one needs to mention the contact details if you are unavailable at your work or residence address
- Employment Details – This section has options for both salaried and non-salaried individuals. One needs to provide the official address of the business in each case and tick the relevant business type
- Income Details – Monthly salary, allowances, total income, other sources of income and the like need to be mentioned in here in the AED currency format
- Other Business Interests of Applicant – In case the customer has other businesses wherein time and money have been invested, the same can be mentioned here
- HSBC Relationship – If one is an existing HSBC bank customer, the relevant details need to be mentioned in here
- Existing Liabilities in UAE and abroad – In case one has existing financial liabilities in the UAE or abroad, the same need to be detailed in here
- Asset Financed – The details of the vehicle, like the make and model, year of manufacture and registration number along with the loan amount and other details go in this section
- Customer Declaration– This basically takes care of the signature and mentions that the applicant is agreeing to the terms and conditions put forth by the bank and being honest about the information that he/she is providing
The car loan application available with HSBC for corporates is a simple form that requires the financial and business details of any company which is interested in availing a car loan from the bank. The relevant sections of the form are mentioned in the following points –
- Business Details– This deals with information like the name, trade license number and its validity, the type of business and the nature of business, along with the employee strength
- Office Address– The official mailing address of the business needs to be mentioned in this section
- Business Management Team– The details of the people in the management team of the business need to be provided here along with how long their service has been in the company
- Other Business Interests of the owners/Management– In case members of the management team have other businesses wherein time and money have been invested, the same can be mentioned here
- Residential Address of the Authorised Signatory– The chosen authorised signatory from the company’s side has to furnish details of residential address, along with permanent addresses in the UAE. Two signatories are mandatory
- HSBC Relationship– If the company is an existing HSBC bank customer, the relevant details need to be mentioned in here
- Asset Financed– The details of the vehicle, like the make and model, year of manufacture and registration number along with the loan amount and other details go in this section
- Customer Declaration– This basically takes care of the signature and mentions that the company is agreeing to the terms and conditions put forth by the bank and being honest about the information that it is providing. Company stamp is mandatory in this section
HSBC is one of the major banks that provides funds for business, investment banking and retail banking in the UAE. It serves around 52 million clients in areas such as Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. HSBC is a worldwide player with a far reaching system in nations and domains in Europe, Asia- Pacific, The Middle East, North America and Latin America, and in Africa.
HSBC had its beginning in UAE in 1946 and was then known as the British Bank of Iran and the Middle East (BBME). Step by step, in 1959, BBME control was assumed by The Hong Kong and Shanghai Banking Corporation, and the bank proceeded to turn into a key component in the growth of banking over the MENA locale.
History of HSBC Middle East Ltd
HSBC’s presence in Middle East dates back to 1946 when the bank was still called the British Bank of Iran and Middle East. The bank was renamed The British Bank of The Middle East after its withdrawal from UAE. The Hong Kong and Shanghai Banking Corporation acquired BBME in 1959. The bank was a leader in in financial services in Gulf Cooperation Council countries. The bank added more branches in UAE after the acquisition in 1959. The bank was renamed HSBC Middle East in 1999 and has remained the same ever since.
Performance History of HSBC Middle East Ltd.
HSBC Middle East has witnessed immense progress over the years in UAE. The bank identifies and addresses environmental, social and ethical developments. The bank has expanded and added more branches in UAE, Saudi Arabia and Yemen after 1959 to reach to the bigger scale of customers.
Listed below are the important awards received by HSBC Middle East Ltd.
- The bank won Euromoney Awards for Excellence in 2009 at Trade Finance Magazine awards
- The bank was awarded the Best Global Trade Finance Bank at Global Trade Review awards in 2010
- HSBC won the award for Best Provider of Private Banking and Wealth Management Services, Middle East, at the 2012 Global Private Banking Awards
- The bank was awarded Outstanding Private Bank in the Middle East at the 2012 Private Banker International Awards.
Listed below are the products and services offered by HSBC Middle East Ltd.
- Accounts-The bank offers accounts to help customers manage their money better. Current account, Savings account and term account are some of the products offered by the bank under the account category.
- Loans and Mortgages-The bank offers specialised loans and mortgages to its customers tailor made to suit the financial/credit needs of its customers. The bank offers car loans, home loans and personal loans along with secured and unsecured overdrafts.
- Cards-The bank offers a wide range of credit cardsand debit cards, each with its own benefits and special offers. The bank offers a very attractive rewards programme on its credit cards.
- Insurance-The bank offers general insurance products like:car insurance, home insuranceandtravel insurance, and life insuranceto the customers in UAE to ensure that they stay protected in case of unfortunate incidents.
- Investment-The bank offers investment solutions such as mutual funds to aid the customer in building on their wealth the safe way.
- Transfers-Customers can handle money transfer with the variety of transfer options provided by the bank.
I’m an expatriate. What are the eligibility criteria for expatriates?
If you are an expatriate residing in the UAE, you should be aged between 21 to 65 years. Along with a valid Emirates ID, you will also have to submit copies of UAE visa, driving license. In case you are a salaried applicant, you will have to provide the last three months' or copies of bank statements of income transfer.
Can I avail a loan, from HSBC, for used cars?
Yes. You can buy a used car with the help of ‘used car loan’ offered by HSBC. With competitive rates of interest HSBC is the most sought-after bank when it comes to previously-owned car loan. The rate of interest for used car loans starts from 3.99% per annum.
Before opting for the loan it is essential to check the age of the car and the loan’s maturity in years. These two criteria should fall within the framework of the maximum maturities specified by the bank and not exceed eight years.
In case I want to apply for a car loan, do I need to bring a guarantor along?
Generally you may not need a guarantor. However, in case your income does not meet the bank’s credit criteria, then you may be required to bring along a guarantor to stand surety for your loan.
How much of a down payment will I be required to make?
Depending on the loan amount and car you intend to purchase, you may have to give at least 20% of the amount as down payment.
Does the bank offer insurance cover as well, along with the car loan?
Yes the bank also provides motor insurance for four wheelers, saloons, and motorcycles as well. At competitive interest rates, HSBC provides a 10% discount on annual premium of the auto insurance, as offered by Zurich Insurance Company.
Does the bank offer any wealth investment solutions?
The bank offers Mutual funds, Fixed income solutions, Managed solutions under wealth investment solutions.
What kind of overdrafts does the bank offer?
The bank offers secured and unsecured overdrafts.
What are the general insurance plans offered by the bank?
The bank offers general insurance products such as Motor insurance, home insurance, travel insurance and family secure insurance.
Does the bank offer Domestic transfers?
The bank offers domestic as well as international transfers.
All the top banks in the UAE offer car loans with lots of attractive features and a wide range of benefits. But out of so many, which car loans have made it to the top list?
There are many financial institutions in the UAE which finance 100% of the loan amount, and you do not need to pay any down-payment while buying the car.
Even the expats in the UAE can buy the car of their dreams with a car loan as all the leading banks in the UAE offer car loans for the expats. It is an easy business, even though the expats will need to provide a little more information about themselves.
Whether for their family or for their personal use, the banks in the UAE offer NRIs staying there to apply for a car loan, especially designed for them. The NRI Car Loans are modified to make it easier for the NRIs to avail the loans.
Yes, you can. The banks in the UAE provide car loans even for buying commercial vehicle(s). Even these offer a wide range of benefits like high range of financing, flexibility of down-payments and longer tenures.
Islamic Car Loan or Car Leasing or Car Ijarah these all are just another terms for Islamic Car Financing in the UAE. It differs a lot from the conventional banking mode and is based on the Sharia principles of the Islamic law. Best thing, its interest free!
News about HSBC Car Loan in the UAE
HSBC appoints new CEO in the Middle East
HSBC Bank in the Middle East has appointed Robin Jones as its interim Chief Executive Officer with immediate effect. The bank has confirmed it recently. Previously Mohammad Al Tuwaijri was working as the deputy chief executive of the bank, who has now been appointed as Deputy Minister of Economy and Planning, Saudi Arabia. Saudi Arabia also changed the governor of its Central Bank as well considering its wide economic changes.
09th May 2016