Documents Required for Car Loan in UAE
If you're considering buying a car in the vibrant city of Dubai, financing your purchase through a car loan is a common and practical choice. Car loans in the UAE make it easier for residents and expatriates to own their dream vehicles without depleting their savings upfront. In this blog, we'll explore the critical documents required for a car loan in the UAE, the benefits of a car loan, and the step-by-step process for obtaining one.
Benefits of Taking a Car Loan in Dubai
Some Benefits of Taking a Car Loan in Dubai are as follows:
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Financial Flexibility: By taking a car loan, you can spread the cost of your vehicle over several months or years, making it more manageable for your budget.
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Preserving Savings: Rather than depleting your savings, you can use a car loan to purchase a vehicle while retaining your financial cushion for unexpected expenses or investment opportunities.
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 Building Credit: Timely repayment of your car loan can positively impact your credit score, facilitating more accessible access to credit for future endeavours.
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Access to Better Vehicles: Car loans enable you to afford more reliable vehicles, enhancing your overall driving experience.
Documents Required for Car Loans in the United Arab Emirates
Like any other loan, documentation is required when applying for a car loan. A checklist to guide you through the documentation process is provided below:
Documents required for Self-Employed Applicants
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Duly filled car loan application form
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Copy of Passport
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Emirates ID
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Visa page from resident Visa proving residency
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Driving license of the applicant
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Bank statements – preferably for the last three months
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Trade license of the business
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Power of attorney (POA)
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Memorandum of Association (MOA) or Article of Association (in case of LLC)
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Partnership agreement (in case of LLC)
Documents required for Salaried Applicants
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Car loan application form filled out by the applicant
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Copy of Passport
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Emirates ID
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Visa page from resident Visa proving residency
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Driving license of the applicant
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Bank statements – preferably for the last three months
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Salary Certificate of the applicant (not required if the salary is transferred to the bank providing you with the loan itself)
Depending on their rules, Some banks may also request extra documentation, such as a new car dealer's quotation, a used car dealer's appraisal, and so on. Confirm the documentation needed with the bank where you're getting your car financed.
Primary documents that should be kept in mind while Buying a Car Loan
The primary documents required for Buying a Car loan in UAE are as follows-
Proof of Identity
Lenders are obligated by federal law to verify the identity of their customers. For the most part, a driver's license, passport, UAE visa, or other government-issued picture ID with your name and photograph should suffice. Lenders can verify your identification without requiring paperwork in some cases. Sometimes, the lender may seek assistance from third parties, such as a consumer reporting agency.
Proof of Income
Before financing an automobile, lenders want to ensure you'll be able to repay your loan. This is more than merely crunching numbers based on a rate of interest. To decide if you'll be able to repay the loan, lenders will look at your income, assets, employment, credit history, and monthly spending.
Take copies of your last month's pay stubs, which show the amount of what you've been paid year to date, with you when you apply for your loan. You may also be able to demonstrate proof of income with bank statements (be prepared with up to six months of words), or the lender may call your employer to verify your employment and income in some situations.
Proof of Residence
Lenders are required by law to acquire information about your home and confirmation of residency. Most lenders may be satisfied if your driver's license is current or if the address you supplied on the credit application matches the address on your credit report. However, you may be required to present further paperwork if you have just relocated. You might be able to use a piece of personalized mail from the previous month, such as:
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Utility bill
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Mortgage statement
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Lease agreement
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Credit card or bank statement
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Property tax bill
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Medicaid or Medicare benefit statement
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Homeowners or renters' insurance policy
Information of Vehicle
The dealer will provide the lender with full car details if you finance through a dealership. If you're dealing directly with a lender or buying a car from a private seller, you'll need to get or fill out a bill of sale, purchase agreement, or buyer's order, which should include the following information:
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Price of purchase
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Number assigned to a vehicle (VIN)
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Model, year, and make
If you're buying a used automobile, ask the seller for the above information, the car's mileage, original title, and a list of any liens on the vehicle.
Insurance Proof
You'll be requested to present proof of insurance after signing a bill of sale for a vehicle. Before you may drive the car from the lot, your insurance must comply with your state's standards and any additional lender requirements.
If you already have vehicle insurance, your new automobile purchase may be covered for a period under your current policy, so make sure to check.
Eligibility of for Buying a Car Loan in UAE
You must meet the following requirements to apply for a car loan in Dubai.
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You must be a citizen or an expat living in the country.
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You must be between the ages of 21 and 65.
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You have a valid driver's license in the country. If you don't have a driver's license in the UAE, the one you have in your home country should suffice.
The bank needs a minimum salary of AED 5000 for new automobiles and AED 8000 for old cars.
The Process of Getting a Car Loan in Dubai
The following is the procedure of getting a Car Loan in Dubai are as follows:
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Research and Choose a Lender: Research different banks and financial institutions offering car loans in Dubai. Compare interest rates, terms, and eligibility criteria to select the most suitable lender.
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Loan Application: Visit the chosen lender's branch or apply online. Complete the loan application form and submit the required documents.
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Loan Approval: The lender will review your application and documents. Once approved, they will provide a loan offer detailing the terms and conditions.
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Vehicle Selection: With the loan approval, choose your desired vehicle from a dealership or private seller.
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Finalize the Loan: Sign the loan agreement, provide any additional required documents, and pay any applicable fees.
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Vehicle Registration: Complete and transfer the vehicle registration process to your name.
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Loan Repayment: Repay the loan by the agreed-upon terms, typically installments.
Conclusion
A car loan in Dubai can make your dream of owning a vehicle a reality while maintaining financial stability. By understanding the necessary documents, the benefits, and the application process, you can confidently navigate the car loan journey in the UAE. Whether you're a resident or an expatriate, these financing options provide a convenient way to hit the road in style. Obtaining a car loan in Dubai is easy if you are eligible and have all the required documentation. Because Dhanguard has relationships with bank personnel, they can assist you in obtaining the loan that best suits your needs.
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