The independence of owning your own set of wheels is something people cannot abstain from. Although Dubai offers several advanced modes of transport, Emiratis and expats cannot shake the feeling of calling themselves a proud owner of a car.

With that said, most buyers prefer a car loan as a mode of payment. But, how to get a car loan in Dubai? Hopefully, by the end you’ll know everything you need to know. The application process to apply for car loans Dubai, documents required, eligibility criteria, and more are discussed below.

Application Process

When you apply for a car loan, and it gets approved, your car is mortgaged to the bank until you settle the loan.

• you will have to contact the bank. However, many car dealerships are affiliated with the bank to offer you a smooth and easy loan for your new car.
• If your car dealership offers this service, it becomes convenient to compare loan rates and other details. But, you can always compare loan rates at online resources.
• Based on the type of car, used or brand new, and other things such as models, your finance, and more, banks have different loan structures. 

But, there are some basic things you need to consider before applying for a car loan with any institution in Dubai as stated below.

Documents Required

Although document and other loan application details differ, here are the important documents you are required to produce for a car loan.

• Passport
• Emirates ID
• Salary certificate
• Labor card
• Driver’s license
• Bank statements for the last 3 to 6 months
• Insurance policy documents
• Valuation certificate of vehicle
• Car registration documents

Eligibility Criteria

The eligibility criteria is a lot similar for both expats and locals, the only difference is driving license. 

• First and foremost, you should be at least 21 years of age to apply for a car loan in Dubai.
• A valid driver’s license
• A salary of at least 3000 Dirham is required to be eligible for most car loan dealers in UAE.
• Valid documents as requested by the bank

How does Auto Finance work in Dubai?

There are different ways to finance your car in Dubai, it varies based on factors such as whether you are a local or an Expat, how long you wish to stay in Dubai, savings, type of ownership, and used or new car.

But, first, let’s discuss car loan considerations in Dubai.

• Most banks specify the amount they are ready to invest which is 80% of the total purchase amount and 20% is attributed to down payment. It is better to accumulate your down payment funds in advance. Another important thing to note is that the car you intend to purchase must be around AED 25k out of which banks are willing to invest 20k. The rest is down payment.  To learn more, check out our article on how to get a car loan in the UAE without a downpayment.
• Nevertheless, some UAE banks offer zero down payment options for a specific type of customer such as a business employee or self employed individual. Apart from that, you can get suggestions from your car dealer.
• You need to produce valid documents such as salary certificate, bank statements from the last 3-6 months, Emirates ID, and a driver’s license. If you are an Expat, you should have a valid driver’s license, or you can apply for a new driver’s license in Dubai if there’s an issue with your original license. Car’s registration certificate, insurance policy documents, and valuation certificate are also required for a loan application.
• The loan period for older cars is generally shorter due to less purchase amount. But, banks offer a maximum loan period of 60 months for both old and new cars.

Paying cash is always the best option to finance your car if you are ready with your funds. Besides cash or loan, you can also opt for a lease agreement if you want to stay for a year or so. Renting or leasing vehicles come with their own set of benefits. Instead of down payments, lease agreements feature yearly or monthly payments, gasoline charges, and maintenance costs.

Repaying Methods of Loan

As mentioned earlier,

• The Banks in Dubai structure car loans with a repayment tenure of  60 months.
• The used cars have shorter repayment tenure, say, a ten year old model will have a repayment term of two years at best.
• Interest rates are the most important thing to consider before financing your car with a loan. Loans with shorter repayment terms demand a higher repayment amount every month. However, long repayment terms come with less amount to pay. 

Thus, compare the best interest rates offered by different banks and go with the cheapest car loan option in Dubai.

If you’re interested to read more about How to Get a Home Loan in Dubai, click to read the best review. 

Dubai is considered as a haven for expats who are looking to lead a luxurious lifestyle. If you intend to settle down in Dubai for long, then getting a home will be your basic requirement. The good news is even the expats and foreign residents can procure a property in Dubai. The financial institutions process non-resident mortgage applications both for investment and for having a home for your family.

Well, let’s check how things work for foreign nationals if they intend to get home loans in Dubai: 

Eligibility Criteria

If you are planning to buy a home in Dubai as a non-resident of this state, you can still apply for the same. Generally the nationalized banks in Dubai have the following four conditions to fulfil as a home loan seeker eligibility. 
To get a Home Loan in Dubai, 

• You should be a resident in Dubai for not less than six months to a year. 
• The total duration of your employment in UAE should be minimum six months 
• The business period in the country should be two to three years 
• A good credit score and lastly, 
• Your employer should be in the bank list
  

If you suffice these requirements, you are entitled to get a home loan.

In addition, if you are looking at how to take out a loan against your property in Dubai, please check out this guide.

Process 

The Process of getting a Home Loan in Dubai is as follows-

• You need to check how much money you need to buy a home in Dubai.
• Then comes the duration of the mortgage along with deciding the interest rate – going for a variable or having the fixed interest rate.
• The process often takes a few weeks. Thus people opting for the same have to get an advance approval from banks.
• Once you get a home of your budget, you have a loan under process against the things you want to mortgage as per the bank requirements.

All these are some of the key considerations you need to check for getting a home loan in Dubai.

Applying for a Home Loan 

In order to start the process of your home loan, you are supposed to provide the bank the following documents: 

• Your personal identification documents, for foreigners it is the passport for the locals, they can produce any other document. 
• Legal document of your residence in Dubai with your current residential address proof. 
• Your creditworthy documents like bank statements, tax, wages proof or your employer letter.
• The documents that can prove the affordability element of the mortgage.
• In Dubai the banks would need your debt payments to be not less than 50 percent of your income. Thus in UAE, the banks remain more flexible as compared to the other nations.

Once these documents are ready, you are good to go for lending a home loan for buying a home in this place. 

Home Loans for UAE Nationals 

If you are a local in Dubai, you can enjoy loans the following way: 

• The locals are offered loans up to AED 15 Million,
• You get finance up to 85 per cent to the property value 
• Enjoy the loan tenure up to 25 years 
• Avail the Pre-approval facility 
• It is available for salaried and self-employed individuals 

The banks can still have the right to change or amend the requirements 

Home Loans for Expats 

When it comes to getting loans for the expats or foreigners there seems to be some amount of difference, which are enlisted as under: 

• You get a loan up to AED 15 Million, or 70 times your salary, which one is calculated as the lower 
• The banks can finance up to 75 per cent of the property value 
• Loan tenure be up to 25 years 
• You can enjoy the pre-approval loan facility 
• It is available only for the self-employed and salaried people. 

Lastly the banks are the sole authority to decide upon the loan conditions, which change from time to time. 

Wrapping Up 

When it comes to getting a home loan in Dubai, it can be a simple affair. However, the banks in UAE have their own standard process, which takes a few weeks to process. The local financial institutions like banks treat both the UAE nationals and expats similar ways provided they are sufficing their requirements. So, if you meet all their requirements, getting a home loan in Dubai is a simple affair.

Know more about How to get a Loan in Dubai, click to read article. 

Mortgage in Dubai is still on the rise and contributes a considerable portion of property financing. Despite the sparse resources, UAE nationals and expats rely on home loans for most property investments.

Getting mortgages for buying a plot of land for a house, or commercial property can be easy, but taking help of mortgage brokers or other financial advisory services is a wise decision. Their expertise lets you explore the nitty gritty of the Dubai mortgage process.

Speaking of the process, you need to know how much you can borrow before you apply for a mortgage. So, calculate your mortgage in advance based on the price of the property, the loan term, and interest rate.

Process of Getting a Mortgage in Dubai

Application

• Once you have found the right type of mortgage for your needs, approach the bank directly or with the help of a broker.
• Central Bank of the UAE has formulated some regulations on property loans. It requires a UAE national or an Expat to have a down payment of at least 20% of the property value below AED 5 million.
• If the property value is above AED 5 million, this rate increases to 30%. It further increases to 35% if the financing is for the second or subsequent purchase of the property.
• Nevertheless, the down payment of 50% is required irrespective of the property value if the purchase is made off plan.

Pre-approval

Next,

• You need a pre-approval. Once you have decided how much to borrow and repayment method, seeking a pre-approval is important for security purposes.
• A bank emails you or sends you an official declaration stating that they have reviewed your application and it is approved.
• This pre approval is valid for 60 days. It gives both the buyer and seller a sense of security. 

The buyer can start searching for a property without worrying about its finance. However, the seller confidently proceeds with sale if a buyer has pre-approval. 

Documents Required

The bank might have hidden costs associated with this, so it is important that you read everything carefully before signing the paperwork. Speaking of which, here are the documents you need as a UAE national to apply for mortgage:

• Copy of passport, Visa and Emirates ID
• Proof of employment which is the salary certificate
• Bank statements from the past six months
• Most recent credit card statements
• Proof of address – either a copy of DEWA bill or a tenancy contract.

Fees

In Dubai, the difference in laws makes banks more flexible for loan applications. Your debt payments should not be more than 50% of your income. 

The cost of arranging a mortgage can be hefty. Apart from those mentioned below, there are other costs and fees associated with the mortgage. The costs and fees include 

• The mortgage registration fee, which is 0.25% of the mortgage value.
• Bank fees – property valuation fee, processing fee, insurance registration fee, and more hidden costs
• Depending on mortgage, property value, and personal circumstances, the costs for mortgage insurance vary, but it is compulsory. So, loan protection insurance is also included.
• If your account is outside of Dubai, it incurs transactional costs too. Thus, it is important to check with your bank what you will be charged for making such a huge international transfer covering fees and incidental costs.

Looking to buy a car? Read this article on How to Get a Car Loan in Dubai. 

Can Foreigners get a Mortgage in Dubai?

Most banks see foreign buyers as a risk when it comes to mortgage. Sometimes, paying a significant down payment to proceed is unavoidable. Based on the property and your personal circumstances, your options vary for getting a mortgage in Dubai. Speaking to a financial expert or brokers in advance can help.

Getting a pre-approval takes a couple of weeks, but gives you a fair idea of how much the bank is willing to lend. It lets you decide your budget before searching for a property. However, note that affordability is considered an important factor for loan eligibility. In many countries, your debt should not exceed 30% to 35% of your usual income. 

Do’s & Don’ts

Mortgage loans are not easy, you should be well aware of your options. But, a few Do’s and Don’ts can help you with the process.

Do’s

• Do get a pre-approval before beginning your search for property. 
• Do keep your financial records in order and turn in your requested documents within stipulated time.
• Keep your mortgage lender informed of your financial situation.
• Be educated about everything you need to know to make an informed decision during the process.
• Hire a legal advisor or advocate to make the  legislative decisions for you or at least advise you.

Don’ts

• Don’t sign any paperwork without going through all the terms and conditions of the bank.
• Don’t finalize a broker without checking into their history and success rate, especially if you are an Expat.
• Don’t quit or change your job because investors check on your employment status regularly.
• Don’t spend money that you need for your repayment.
• Don’t close credit card accounts or take cash advances on it if it is associated with your mortgage.

Getting a loan in Dubai is one of the most important things for people who are new to the country and need some initial cash flow to support their lifestyle and other needs. While there are a lot of banks in Dubai that offer loans, you have to find the one that suits your financial needs.

Before that, you have to understand the eligibility criteria, the documents required for the application, the process of application and other important details. In this article, we have covered all of these in detail. Make sure you read through this article till the end so that you get to learn exactly how you can get a loan in Dubai.

Where can you get a loan in Dubai?

You can apply for a loan in a bank or a private lending company. There are different terms and conditions which have to be met before you get loans from a bank or a lending company. Understanding these terms and conditions in advance will help you go through the process with ease. Let’s start by understanding the eligibility and requirements for loan approval via banks.

What are the eligibility criteria for getting a bank loan in Dubai?

• Applicant should be salaried/self-employed
• Applicant should possess a valid passport  or a valid UAE National ID card 
• Applicant should possess a valid residency visa for the UAE
• Applicant should possess a letter of salary transfer in case it is asked by the bank
• Applicant should have served at least six months of employment in the company
• Applicant should have a working contract that outlasts the repayment period of the loan

What are the documents required?

• National ID card (for UAE nationals)
• Resident visa (for expatriates)
• Proof of income

Some banks may require you to have a minimum salary of a certain amount. If you do not meet the salary requirement, you may not get a loan from that bank. In that case, you can opt for banks and financial institutions which do not have a minimum salary requirement. 

Process

In most cases, you can apply for the loan online. However, you will have to visit the bank in person afterward. The process involves initial documentation for eligibility confirmation. Once that is done, banks follow some formal protocol and check the trust factors of the applicant. After this, the bank processes the loan within a few days.
There are a lot of banks that offer different types of loans in Dubai which include business loans and personal loans. There are also some private loan providers that can help you get loans. The application process for these private loan providers is very similar to that of banks. The difference could be in the eligibility criteria and the requirements. Private lenders have fewer requirements than banks. However, you have to make sure to compare the features of any financial institution before you apply for a loan. 

Ten Golden Rules to follow when Taking a Loan in Dubai 

• Don’t borrow more than you can repay
• Ensure timely and regular repayment of installments
• Don’t borrow to invest or splurge
• Take insurance with huge amount of loan
• Keep shopping for cheaper rates on loans
• Understand the loan documents properly
• Substitute high cost loans
• Repay loans before retirement
• Keep your family or close ones in the loop while taking a loan
• Keep loan tenure as short as possible

A word of caution

The ideal practice when applying for a loan is to approach a bank first. If the banks don’t approve of the loan for certain reasons, try getting the loan from private lending companies. There are companies that offer a loan on minimal documentation. However, you have to be careful and stay away from loan sharks. There are illegal loan providers in Dubai who constantly look for people desperate for loans. They offer loans at a very high interest rate and torture the borrower if they do not repay the money on time.

Do you want to get a loan in Abu Dhabi? If so, you have come to the right place. In this post, we have explained everything related to getting loans in Abu Dhabi. You can get loans to fulfill your personal goals, business goals, medical emergencies, and more. There are a lot of banks that offer loans in Abu Dhabi.

Best banks that offer loans in Abu Dhabi

• Dubai Islamic Bank
• Abu Dhabi Islamic Bank
• First Abu Dhabi Bank 
• RAK Bank
• HSBC
• ADCB
• CBD
• Emirates NBD

Now, let’s understand the process of loan approval in Abu Dhabi

Process for loan approval in Abu Dhabi

Obtaining a loan in Abu Dhabi is a simple process in today’s age. In earlier days, it was not that easy. The process was time-consuming, and sometimes it didn’t meet the purpose, especially when the loan was required urgently. Modern-day technology has made personal finance convenient, like never before. 

The process is quick and easy. In fact, applying for a loan from Abu Dhabi is similar to applying for a loan from any other place in the UAE. You can apply for loans from the official website of the bank you choose. If you meet the eligibility criteria, the loan gets approved in a few days.

Eligibility and qualifications for loan approval

To get a loan in Abu Dhabi, you need to be qualified and eligible. Here are some of the necessary qualifications and eligibility criteria for getting a loan in Abu Dhabi:

• Valid Abu Dhabi residence permit
• Clean credit history
• Capacity to repay the loan on time
• Government employee or employee of a firm approved by the lending bank
• At least six months of employment in the company
• Working contract outlasting the repayment period of the loan

Other important documents

• National ID card (for UAE nationals)
• Resident visa (for expatriates)
• Proof of income

What happens if you Fail to pay your Debts in Abu Dhabi, UAE? 

Failing to pay three consecutive installments or six non-consecutive installments on the repayment of your personal loans or credit card facilities may be considered an event of default, in accordance with Article 4(4) of the Personal Loan Agreement format of the Central Bank of the UAE. 

“If the loan elapses and all the installments, interests and any other fees and expenses become due and payable immediately without having to give any notification or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law in the event that the borrower failed to pay three consecutive installments or six non-consecutive installments of the monthly installments without approval of the bank.” 

It should be noted that the dishonour of a cheque in the UAE is considered a criminal offence. This is in accordance with Article 401 of Federal Law No. (3) of 1987 on issuance of Penal Code of UAE, which states: “Detention or a fine shall be imposed on anyone who, in bad faith, gives a draft (cheque) without a sufficient and drawable balance or who, after giving a cheque, withdraws all or part of the balance, making the balance insufficient for settlement of the cheque, or if he orders a drawee not to cash a cheque or signs the cheque in a manner that prevents it from being cashed.”

Final Thoughts

Loans can help you overcome financial hurdles and help you achieve your goals. Getting the right loan is critical because you will have to bear the interest rates. Besides, some banks offer more privileges than others when you get a loan from them. So, make sure to compare the loan schemes before applying to any loan provider in Abu Dhabi.

If you are interested in personal loans in Abu Dhabi, you can read this article.