Car Loan in Dubai: Interest Rates, Eligibility & Calculator [2025]
Thinking of financing a car purchase in the UAE? A clear understanding of car loan interest rates, eligibility requirements, and monthly repayment can help you make the best choice. This 2025 guide walks you through everything, including a built-in calculator to estimate your payments.
Internal link: Dubai Car Zone
How Car Loans Work in Dubai
A car loan is a form of auto financing where a bank or finance company loans you money to buy a car. You repay the principal plus interest over a fixed term. The car itself often acts as collateral until the loan is fully paid off.
Interest Rates for Car Loans in 2025
Interest rates depend on several factors: your credit score, the down payment, the loan tenure, and the chosen bank or finance provider. In 2025, typical car loan rates in Dubai range from around 3.5% to 7.5% per annum. Premium or luxury model loans might attract higher rates.
| Loan Type | Estimate Rate Range |
|---|---|
| Standard Cars | 3.5% – 6% |
| Luxury / Premium Cars | 5% – 7.5% |
Eligibility Criteria
- UAE residence visa (minimum 6 months validity)
- Valid UAE driving license
- Minimum income thresholds depending on bank (e.g. AED 5,000–10,000 monthly)
- Good credit history — no major defaults or blacklisting
- Down payment required by some lenders (10–25%)
Car Loan Calculator
Common Loan Terms & Conditions
- Tenure: Typically from 12 to 60 months.
- Down Payment: 0–25%; some lenders require a minimum upfront payment.
- Processing Fees: One-time administrative costs (often 1% to 2% of loan amount).
- Insurance: Comprehensive insurance typically mandatory for the loan period.
- Early Settlement Charges: Some lenders charge for paying off the loan early.
Tips to Get the Best Car Loan Deal in Dubai
- Maintain a strong credit history to negotiate lower rates.
- Provide larger down payment to reduce principal and interest burden.
- Opt for shorter loan tenures to reduce total interest paid.
- Compare across banks and finance companies — don’t settle on the first offer.
- Negotiate processing fees and look for zero-fee offers.
- Use platforms like Shozón to compare finance offers and trustworthy dealers.
FAQs
Can tourists get car loans in Dubai?
It is more challenging for tourists to obtain car loans unless they have residency status or a UAE-based guarantor. Many lenders prefer residents with stable income proof.
Is zero down payment car loan possible?
Some lenders offer 0% down payment promotions, but they often come with higher interest rates, stricter terms, or higher monthly installments.
Can I settle the car loan early?
Yes, most lenders allow early settlement. However, some may charge a small penalty. Always check your agreement terms.