Car loans in the UAE: down payment, tenor and eligibility

Under Central Bank of the UAE rules, a car loan can cover at most 80% of the vehicle’s value, so you pay at least 20% yourself, and it can run for up to 60 months. All your loan and card repayments, including the new car loan, must stay within 50% of your gross salary and regular income. Each bank adds its own conditions on salary, employer and the car.

Key takeaways

• A car loan can cover at most 80% of the vehicle's value, so the buyer funds at least 20%.
• The maximum car loan term is 60 months.
• All your loan and card repayments, including the new car loan, must fit within 50% of your gross salary and regular income.
• If a car loan is quoted at a flat rate, compare the effective rate and the APR instead.
• A zero down payment offer still cannot lend more than 80% of the car's value, so ask in writing how the rest is covered.

These rules apply to car loans from banks and finance companies licensed by the Central Bank, conventional and Islamic, for new and used private cars. For the rest of the topic, start from our Car loan guides.

The Central Bank rules for car loans

Four sets of rules shape every car loan from a UAE bank or finance company: a cap on how much of the car’s value you can borrow, a maximum term, the debt burden ratio and a table of capped fees. The first two come from Regulation No. 29/2011, Article 3, which treats a car loan as a separate product from a personal loan and requires it to be secured by a mortgage over the car.

Maximum car loan, share of the car's value

80%

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

Maximum car loan term

60 months

The maximum repayment period of a car loan is 60 months.

The Central Bank’s clarifications to the regulation say banks may finance new and used passenger cars up to 80% of their value. Commercial vehicles fall outside these rules unless the loan is repaid from the customer’s salary and meets the other criteria, and an operating lease to an individual is not treated as car finance at all.

The fee caps in Appendix 2 are maximums before VAT, and the Central Bank expects lenders to charge less where their actual costs are lower. Late payment penalty charges on a car loan are capped as shown below; the table does not say whether the cap applies to each missed instalment or to a period.

Maximum late payment charge, car loans

AED 500

Late payment penal charges on a car loan are capped at AED 500.

How much down payment you need

You need at least 20% of the car’s value from outside the car loan. On a AED 90,000 car that is AED 18,000, leaving a loan of no more than AED 72,000. The cap is set on the vehicle’s value, and the rules do not say how that value is fixed. If the value the lender accepts is lower than the price you agreed, 80% of that value is the most it can lend and your down payment goes up, so ask the lender which figure it uses before you agree a price. That matters most for used car loans.

Paying more than the minimum lowers the loan, the instalment and the total interest. The example below uses an illustrative flat rate; the rate a lender offers you will differ.

Worked example

Car priced at AED 90,000, minimum down payment, 60 months

The car price and the 3.5% flat rate are illustrations, not market rates.

1. Minimum down payment: AED 90,000 × 20% = AED 18,000.
2. Loan: AED 90,000 less AED 18,000 = AED 72,000, which is 80% of the price.
3. Interest at 3.5% flat for 5 years: AED 72,000 × 3.5% × 5 = AED 12,600.
4. Total repaid: AED 72,000 + AED 12,600 = AED 84,600.
5. Monthly instalment: AED 84,600 ÷ 60 = AED 1,410.
6. The same instalment on a reducing balance works out to about 6.5% a year, the figure to compare with other quotes.

This buyer pays AED 18,000 upfront, then AED 1,410 a month for 60 months: AED 12,600 in interest in total.

Here is the same car with a larger down payment or a shorter term, at the same illustrative 3.5% flat rate:

A shorter term raises the instalment but cuts the interest; a larger down payment lowers both. Because 60 months is already the longest term allowed, the instalment can only come down through a lower rate, a bigger down payment or a cheaper car. Insurance and any fees in the lender’s Key Facts Statement are separate from the down payment, although you can choose to spread the insurance cost over the loan (see below).

What about zero down payment offers?

A car loan from a UAE bank or finance company cannot be more than 80% of the car’s value, so “zero down payment” cannot mean that the car loan pays for the whole car. The first 20% has to be covered some other way, and you need to know exactly how before you sign.

Ask the seller and the lender to answer these questions in writing:

• How is the first 20% paid? Ask to see it on the invoice and in the contract.
• Is any of it borrowed? A second loan, a credit card instalment plan or any other facility is still debt. If it comes from a bank or finance company, its repayments count towards the 50% cap together with the car loan, under Article 7.
• Is it a loan or a lease? The Central Bank’s clarifications say an operating lease to an individual is not car finance and falls outside Regulation 29/2011, which holds the car loan caps and the fee table.
• Is there a large final payment? The Consumer Protection Standards bar lenders from using balloon payments to get around the debt burden ratio or loan-to-value limits (Article 7).
• What is the APR and the total cost of every part? Compare the full package, not the headline.

When lenders assess what you can afford, they also have to take into account money you borrowed from an employer, friends or relatives and repay in instalments. Advertising has to be accurate and not misleading and must show where to find the qualifying criteria, and an introductory zero-cost offer must state when it ends and what the price goes back to (Article 2).

Eligibility: what banks look at

Banks look at four things: whether your income is stable and can be verified, whether the new instalment fits under the 50% debt burden ratio, your record with the Etihad Credit Bureau (AECB), and the car. The Central Bank sets the ratio and the checks; each lender sets its own minimum salary, age range and other criteria on top.

Salary and employer

The Central Bank’s car loan rules set no minimum salary: each lender sets its own. Emirates NBD’s auto loan page, as one example, listed a minimum salary of AED 7,000 and an age range of 21 to 60 when we checked it on 13 October 2026.

Whatever the threshold, lenders must verify your income against reliable sources where they reasonably can, rather than rely only on what you declare, and the Central Bank’s clarifications ask them to confirm salary and end-of-service benefits with the employer. Their risk policies can also weigh the nature and security of your job and the number of people who depend on you. If part of your pay is variable, such as commission, only a prudent share of the average counts, and one-off windfalls are left out (Consumer Protection Standards, Article 7).

Salary transfer is a separate question: see personal loans without salary transfer for how it affects loan offers.

Your debt burden ratio

Your debt burden ratio is the share of your gross monthly income that goes to repaying loans and cards. The new car instalment has to fit under the 50% cap together with every other repayment to banks and finance companies.

Maximum debt burden ratio

50%

Monthly deductions for all loans and facilities from banks and finance companies together, including car loans, home loans, overdrafts and credit cards, must not exceed 50% of the borrower's gross salary and any regular income from a defined and specific source, at any time.

A car loan is a separate product from a personal loan, so you can hold both, but only if all the repayments together stay within 50% (Article 3 clarifications). Ask each lender how it counts your credit card limits.

Worked example

Gross salary AED 12,000, existing repayments AED 4,000

The salary and repayments are illustrations; the new instalment is the AED 1,410 from the example above.

1. Cap: AED 12,000 × 50% = AED 6,000 a month for all repayments.
2. Room left: AED 6,000 less AED 4,000 = AED 2,000.
3. New car instalment: AED 1,410, which is less than AED 2,000.
4. Ratio after the loan: (AED 4,000 + AED 1,410) ÷ AED 12,000 = 45.1%.

The loan fits under the cap, with AED 590 a month of room left.

If the same person already repaid AED 5,000 a month, only AED 1,000 would be left. At the same illustrative rate and term, the loan would have to shrink to about AED 51,060, which means a down payment of about AED 38,940 on the AED 90,000 car.

The ratio is not the only test. Lenders must also weigh your basic living costs and dependants, and give you a free summary copy of their affordability assessment.

Your AECB report

Before approving a car loan, the lender must check your credit record with the Etihad Credit Bureau and review all your existing debts, secured and unsecured. It uses the report to judge your past credit behaviour, your ability to meet monthly payments and how much you already owe. It makes sense to check your AECB report before you apply, so that any error can be corrected first.

Self-employed applicants

Self-employed people can apply, but the lender must judge how stable the income is and ask for reasonable evidence of it. Where income swings a lot from month to month, the lender has to look at a longer period of evidence. A car loan made to a sole proprietorship or company and secured by the salary of the owner or partners is treated like a car loan to an individual, on the same terms (Article 3(e)). Emirates NBD’s list for self-employed applicants, for example, adds a trade licence and the company’s memorandum and articles of association.

Flat rates on car loans

A car loan may be quoted at a flat rate, which charges interest on the original loan amount for the whole term. Because the balance you owe falls with every instalment, a flat rate always looks lower than the reducing rate for the same loan: in the example above, 3.5% flat over 60 months is about 6.5% on a reducing basis.

The Central Bank requires interest on car loans to be calculated on the reducing balance over a 365-day year, and any bank that advertises a flat rate must show the equivalent effective rate next to it (Article 6). Lenders must also disclose the Annual Percentage Rate (APR), which adds fees to the interest, so the APR is the figure to compare between lenders (Consumer Protection Standards, Article 7). The guide to flat vs reducing rates shows the conversion in full.

Flat rate adverts

Effective rate shown

Any bank advertising a flat interest rate must show the equivalent effective (reducing-balance) rate next to it.

Islamic banks offer car finance on a profit basis instead of interest, and the Central Bank lets them use their own terms when displaying rates. Regulation 29/2011 applies to Shariah-compliant banking services too, except for how the profit is computed, so the same 80% and 60-month caps apply (Article 13). See Islamic and conventional finance compared for how the structures differ.

Documents you will usually need

Expect to show proof of identity and residence, proof of income, recent bank statements and the car’s details. Each bank sets its own list. As an example, Emirates NBD’s auto loan page listed these on 13 October 2026:

• Passport, UAE residence visa and Emirates ID, with copies
• A copy of your driving licence
• A labour card or work ID copy
• Three months of bank statements, if you do not bank with the lender
• For a new car, a quotation from the dealer
• For a used car, the seller’s passport and Emirates ID copy and a valuation certificate from the dealer
• If you are self-employed, a trade licence copy and the memorandum and articles of association

The page adds an extra document for UAE nationals and says the bank may ask for more in some cases.

Two rules protect you at this stage. Before you sign, the lender must give you a Key Facts Statement as the first document in the sales process, showing the expected annual rate, the possible fees and a worked example of any early settlement fee (Article 2). And the lender must not issue a credit card with your car loan, or raise an existing card limit, without your express consent (Consumer Protection Standards, Article 7).

If the lender asks for post-dated cheques, the Central Bank limits what it can take:

Post-dated cheques, maximum value

120%

Lenders may take only post-dated cheques that cover the instalments, worth no more than 120% of the loan or debit balance.

Registration, insurance and the bank’s lien

Until you repay the loan, the car is mortgaged to the lender: Article 3(d) requires every car loan to be secured by a mortgage over the car. When the loan is paid off, the lender’s no-objection certificate (NOC) to the traffic department is free.

NOC fee on a car loan

AED 0

Lenders may not charge for a no-objection certificate (NOC) to the traffic department on a car loan.

The steps for registering and releasing a lender’s mortgage with the traffic authorities are covered in our guide to used car loans.

Loans and insurance are separate products under the Central Bank’s clarifications. You choose whether to pay for insurance upfront or over the term of the loan, and the lender must explain this and get your agreement before charging you.

Paying for insurance

Customer's choice

Loans and insurance are separate products: the customer chooses whether to pay for insurance over the loan term or upfront, and the bank must explain this and get the customer's agreement before charging for it.

If credit insurance or takaful is a condition of the loan, the lender must tell you so in writing, and you buy it from regulated companies the lender proposes. Any other product bundled with the loan can be refused without losing the original credit offer (Consumer Protection Standards, Article 7).

Paying a car loan off early

If you repay a car loan before the end of its term, the early settlement fee is capped at 1% of the amount still outstanding, before VAT.

Maximum early settlement fee, car loans

1% of outstanding

The early settlement fee on a car loan is capped at 1% of the outstanding amount.

On an outstanding balance of AED 40,000, for example, the fee can be at most AED 400 plus VAT. The fee table shows an AED maximum for consumer (personal) loan settlements but none on the car loan row. Once a loan is fully settled, the lender cannot charge interest for the months that remain, and a partial settlement must reduce the interest in proportion to the principal left (Consumer Protection Standards, Article 7). Islamic banks must give an adequate rebate on early repayment so that the final charge stays within the same caps (Article 7 clarifications).

The steps, from the settlement figure to the free NOC and the release of the lender’s mortgage on the car, are in early settlement of a car loan.