Car loans in the UAE

A car loan in the UAE can cover at most 80% of the vehicle’s value, so you pay at least 20% yourself, and it must be repaid within 60 months. The repayments count toward the Central Bank’s 50% debt burden ratio together with your other loans and cards, and the lender holds a mortgage over the car until the loan is paid off.

The rules for every car loan

Maximum car loan

80%

A car loan must not exceed 80% of the value of the financed vehicle, so the buyer funds at least 20% themselves.

The 80% cap applies to new and used cars alike, and the rules cover conventional and Islamic lenders. Within them, each lender sets its own criteria and can offer less. A car loan is separate from a personal loan, but both count toward the 50% cap on your total monthly repayments.

How car loan rates are quoted

Car loans may be advertised with a flat rate. A lender that advertises a flat rate must show the equivalent effective (reducing-balance) rate next to it, and must disclose the APR, which includes interest and fees. Interest on car loans is calculated on the reducing balance. Our guide to flat vs reducing rates explains the gap, and the flat to reducing rate converter works it out for any quote.

Fees the Central Bank caps

How to settle early and get the lender’s mortgage removed from the car is covered in early settlement of a car loan.

How to get a car loan: the steps

1. Check how much of your income already goes to repayments with the debt burden ratio calculator.
2. Save at least 20% of the car’s value for the down payment.
3. Compare offers by APR, not by the flat rate, and estimate the instalment with the car loan calculator.
4. Read the Key Facts Statement the lender must give you before you sign.
5. Apply with your ID, proof of income and the car’s details.
6. When the loan is paid off, ask for the free NOC so the lender’s interest can be removed at the traffic department.