Whether you live in Dubai, Qatar or another part of the MENA region, financing your new car with a personal loan has never been easier.
And whilst getting the cash might be relatively easy if you meet the desired criteria, there are strict regulations to follow in order to comply with Shari’a law.
1) Get a personal car loan
If you are thinking about upgrading your car, a personal loan can make it happen. They are flexible and often have low introductory rates that last for a limited period.
It is worth bearing in mind that:
- Maximum loan terms are for 60 months.
- The amount of the loan cannot exceed 80% of the value of the financed car.
- Interest rates usually hover around just under 3% – considerably cheaper than in the Western world.
In order to attract the right customers to the right deal, there have been offers of interest-free car financing at selected banks within the UAE.
2) Keep an eye on your interest prices
Make sure to always check your pricing and especially the interest rates and the interest rate period. You may have no interest or 0%, but only for a couple of years, after which time the rates can suddenly jump up massively. This is one thing to always look out, whether you are in the UAE or in the West.
3) Don’t be tempted by luxury cars
Everyone wants to drive that Ferrari, but don’t overstretch yourself.
Dubai especially has an influx of large and glamourous cars, and you will see many supercars tearing it about in the city centre. This is because there is a large amount of wealth within the city, and supercars are a relatively new addition to the city of Dubai.
Coupled with low interest rates on the supercars when purchased on finance, means in Dubai it is extremely common for people to purchase and drive a luxury car.
4) Wait for certain times of the year
During religious festivals within the region, such as the Islamic celebration for Ramadan, there are likely to be offers at various car dealerships.
Last year during Eid there were several all-time low interest rates, and Ramadan is certainly a festival where there are a variety of offers out there.
If you are an expat or aren’t religious, and are in the market for a new car on finance, it might be worth checking out when the next religious festival is happening – the dealerships and banks tend to get a bit more generous at this time of year!
5) No minimum salary requirement
UAE as a whole is a playground for the super-wealthy, but it does not have a similar financial set up to the one we have in the West, and loan eligibility is not always judged on salary.
Many banks offer a variety of low-rate, flexible personal loans that make it easy to purchase a vehicle within the UAE. If you pay off the outstanding balance within two years, your interest rates will stay very low and manageable.