Car Loan at Low-interest Rates in UAE

The purchasing of a car in UAE is possible through the obtaining of car loans at lower interest rates. But before applying, every individual must ensure that the paperwork for this loan is easier. So, the application process will not require applicants much time. There are many factors that can influence the interest rates of car loans. You need to consider all of these factors in order to get a debt at a low-interest rate. Many financial companies such as Emirates Loan provide many types of loans including car loans with lower rates and without any processing fee.  

Factors that affect the car loan interest rate: 

The financial institutions offer loans with specific interest rates. When you receive the debt, the repayment installment includes the amount of interest. Check the following factors, so you will know which factors affect the interest rate of car debts. As a result, you will be able to avail a debt at lower interest rate.    

Loan tenure: 

The interest rate is higher if the tenure is longer. You will be required to pay installments with higher interest for a long duration. The overall cost of such debts is with higher rates. Generally, the longer tenure of debts comes with high interest. On the opposite side, the shorter duration of loans is with a lower rate. You can also choose the interest type for any tenure. 

Car’s age & model: 

When an applicant applies for a car loan, the car acts as collateral. That’s why there is no need for additional collateral. The banks get surety that they will get repayment from the borrowers and if any borrower fails to repay, the lender will seize the vehicle. Therefore, the model & age of a vehicle are essential factors that also impact the debt as well as its interest. If you want to purchase an old model of vehicle, it comes with higher interest. The lower rates of loans are available for new models of vehicles.   

Income level: 

Every lender includes the term of income level to check if the borrower easily pays off the debt or not. The higher income gives the applicant more chance to avail the funds at lower interest. There is a particular term of debt-to-income ratio that all lenders check and then approve the applicant’s application. If this ratio is higher, the applicant gets the debt with lower interest. It becomes easier to know the borrower’s financial capability for paying down the amount. This ratio also shows that if the borrower is a trustworthy client for the lender or not. In the UAE, the bad ratio will lead to obtaining a debt at higher interest rate.   

Down payment ratio: 

The down payment is paid by the borrowers and then they are eligible to avail the debt amount from the lender. Paying off a higher down payment is an advantage for the borrower. Because such an applicant requires a lower amount of debt from the bank. The getting of lower debt also comes with lower interest. And you will easily pay down in a short tenure. In other words, the higher down payment shows that the applicant is a financially stable person. And, the lender considers the applications of such applicants and gives them instant approval. 

Credit history: 

When you apply for a new loan, the lenders check the credit history of applicants. A good credit history means that you are sincere about paying off your all existing or previous debts. Furthermore, it also shows that you pay your payments on time. The credit history contains the credit score. The score should be higher if you want to get approval for a lower rate of loans for the buying of a new car. The repayments are also convenient for you because they are lower. 

Things to remember when applying for a car loan

There are things that you must remember when you decide to apply for a loan at a lower rate of interest. The prominent things to remember are: 

Minimum requirements: 

Every lender sets the limit criterion of age as well as salary. Most lenders’ criterion of age starts from 21 years. You need to check the lender’s terms and make sure you meet all the requirements of eligibility. Emirates Loan also offers this debt to applicants of no higher monthly salary. But this financial company checks all other eligibility requirements.   

Maximum tenure: 

The lenders provide the options of different tenures. You should check the maximum tenure of the lender. When you know the maximum tenure, you will easily compute the overall cost of interest. Always select a tenure that comes with lower monthly installments and lower interest. In this way, the debt becomes less costly for the borrowers. 

Repayments: 

The missing repayments lead to loan default and that may result in the applicant’s facing legal action. Always remember the due dates of repayments and then pay off on time. The amount of installment must be lower to easily repay the amount. Besides, you will easily make a financial strategy for handling the debt’s repayments.   

Calculate EMIs: 

The calculation of EMIs is easier with the help of a loan calculator. Every lender’s official website offers the services of this calculator online. That’s why you can easily calculate the EMIs quickly. It does not require your extra time and you will see its result instantly. There is a need to mention of few factors like debt amount etc.