Today, it is easier to get your hands on a new (or used) car. And this all thanks to the various car loan schemes offered by different banks and other financial establishments. These car loans come in different payment schemes or schedules and they offer several advantages as well.
Applying For A Car Loan In The UAE
If you are looking to apply for a car loan in UAE, you may have a hard time looking for the best or most suitable one. To make sure you choose the best one, below are some important aspects you have to consider before making your final choice:
• The interest rates of the car loan product. In the UAE, there are two types of interest rates applied to car loans: fixed and reducing balance interest rates. Fixed interest rates are computed every month based on the total amount the customer borrowed. When it comes to reducing balance interest rates, the interest rates are calculated monthly based on the amount the customer currently owes the bank. For Shariah-compliant banks, profit rate is computed by dividing the markup profit by the purchase cost.
• The payment plan of each loan product. It is essential for a potential borrower to evaluate this factor since this will allow you to properly plan financially during the duration of the loan. The maximum period for a loan in the UAE is pegged at six years. However, there are some banks offer borrowers the option to pay smaller amounts on a monthly basis and settle the remainder in bulk.
Applying For A Car Loan In The UAE
If you are looking to apply for a car loan in UAE, you may have a hard time looking for the best or most suitable one. To make sure you choose the best one, below are some important aspects you have to consider before making your final choice:
• The interest rates of the car loan product. In the UAE, there are two types of interest rates applied to car loans: fixed and reducing balance interest rates. Fixed interest rates are computed every month based on the total amount the customer borrowed. When it comes to reducing balance interest rates, the interest rates are calculated monthly based on the amount the customer currently owes the bank. For Shariah-compliant banks, profit rate is computed by dividing the markup profit by the purchase cost.
• The payment plan of each loan product. It is essential for a potential borrower to evaluate this factor since this will allow you to properly plan financially during the duration of the loan. The maximum period for a loan in the UAE is pegged at six years. However, there are some banks offer borrowers the option to pay smaller amounts on a monthly basis and settle the remainder in bulk.
• The requirements. In the UAE, potential borrowers are usually required to submit salary certificates, pay slips, banks statements and copies of their passports. Some banks may also ask potential borrowers to submit at least three local references and/or a copy of their utility bill. In general, documentation and vetting requirements will vary from one bank to the other. Make sure you have all these requirements and documents on hand so that the loan application process will go easier for you.
• The processing fees. As a potential borrower, you have to inquire about this so that you will know all of the costs involved in the car loan. Most banks allow borrowers to extend the duration of the loan. But if you plan to settle your loan earlier, you can ask a bank personnel whether you will have to pay an early settlement fee.
• Additional perks. Finally, to attract potential borrowers, many banks offer additional benefits that include credit and debit cards to extended warranties and free registration. Although these bundled offers may seem appealing to you, be wary of the additional costs that you may possibly incur.
Source:
http://www.hsbc.ae/1/2/personal/borrowing/loans/vehicle-loans offers more details about applying for a car loan in the UAE.
• The processing fees. As a potential borrower, you have to inquire about this so that you will know all of the costs involved in the car loan. Most banks allow borrowers to extend the duration of the loan. But if you plan to settle your loan earlier, you can ask a bank personnel whether you will have to pay an early settlement fee.
• Additional perks. Finally, to attract potential borrowers, many banks offer additional benefits that include credit and debit cards to extended warranties and free registration. Although these bundled offers may seem appealing to you, be wary of the additional costs that you may possibly incur.
Source:
http://www.hsbc.ae/1/2/personal/borrowing/loans/vehicle-loans offers more details about applying for a car loan in the UAE.
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