Owning a car today is a necessity. Everyone has a dream car that they want to drive around the city. But buying a car in today’s time can be a hassle. Islamic vehicle finance allows us to get a car with the least possible turmoil with paperwork and payments. If you fulfill the requirements and are a UAE resident then you are eligible for Emirates Islamic Auto Finance.
To promote the dream car purchase, vehicle finance comes up with a simple and hassle-free strategy. Primarily, they adopted the finance scheme known as Intaleq which is shari’a-compliant, which is concentrating on the best finance solutions to meet the purchase within budget and offering personalized service.
Benefits of Intaleq
Adaptable payment policies, competitive rates, and a host of other benefits will make us ready to own our dream car today. Down below are some of the features you can take advantage from:
- With the lowest salary prerequisite of AED 3,000 and no salary transfer being vital,
- Adjustable and lengthened repayment time of up to 5 years.
- Offer 60 days grace period to start the first installment.
- Murabaha structure matching with Shari’a principles
- The short and simple approval process.
- Minimal documentation with quick and easy approval within 4 hours.
- Income Transfer is not expected.
- Emirates Islamic finance is available for a variety of brands, be it new or pre-owned vehicle.
- Auto finance provides a fully Shari’a-compliant Murabaha Structure.
- It is a Regular Murabaha product with a subvention variant. Insurance, Accessories, and VAT can be insured.
Document Required:
- Salary certificate or a document providing income proof.
- A 3-month bank statement of your salary transfer but it is not required if you are transferring your salary to the bank.
- A copy of your important documents such as passport and Visa for expatriates is required.
- Applicable post-dated cheque.
- A security Cheque is required.
- Islamic vehicle insurance is comprehensive.
- A quotation or Pro-forma invoice from the dealer for new vehicles.
Requirements for Used Cars:
- A valuation certificate by your dealer must be approved by Emirates Islamic.
- Ownership titles if any.
- A citation or offer to sell to the bank from the possessor of the current vehicle.
Points to Keep in Mind
Here are some pointers you should keep in mind before applying for car finance.
- Components like credit history, documentation, and the ability to repay the finance amount can contribute to vehicle finance approval.
- If the auto finance is in your name, you need to be attending at the time of collecting the vehicle.
- The utmost auto finance payment accessible is 1.5 M.
- The profit rate ranges from 1.80% to 2.95% for salaried customers.
- You cannot reschedule auto finance.
- You cannot buy out your vehicle finance.
Benefits Of Car Finance in UAE:
For new residents, settling in the UAE can encounter several costs. 60 to 70 percent of car buyers in the Emirates opt for car finance. However, when buying a car, local auto loan interest rates are relatively low at 2 to 4% versus more than 5% in other markets.
Besides, UAE has minimal eligibility criteria for finance. Here are some factors that consumers need to examine when registering for car finance and evaluating how much they can borrow.
- No more than 60 months
Loans for the financing of new or used cars retain a cycle of up to a maximum of 60 months for both individual and none individual customers. However, the maximum tenure of a loan can be shorter for older used cars.
- 20 percent down payment
Consumers can only take 80% of the new or used car’s value, which includes a 20% down payment. The down payment is generally paid directly to the bank, which then in turn settles the full value of the used car with its owner.
- At least AED 25,000
Many banks will have a minimum loan value they are willing to finance, which is generally around AED 20,000. Since banks finance 80% of the car’s value, this means a minimum car value of AED 25,000 is required for the car to qualify for financing. That means, 80% of AED 25,000 amounts to an AED 20,000 loan.
- Monthly payments must be less than half your salary
This means that the resulting Equal Monthly Installments (EMI) of your used car loan cannot be greater than half your salary minus existing accountability, which includes credit cards debts. So, if you make AED 12,000 a month, your resulting car loan monthly installments cannot be greater than Dh6,000 a month.
If you already have any other loan and you are paying off, let’s say, AED 1,000 a month, then your new loan monthly installment cannot be more than AED 4,000, and so on. If you have credit cards, then generally 5% of your credit card limit counts towards your existing liabilities.
Steps for Calculating the Affordability
Down below is how you can calculate the approximate amount of loan that you are eligible for.
- Monthly income divided by two
- Then subtract with monthly installments if any
- Subtract 5% of credit card limits
- Result: maximum monthly car loan eligible you are eligible for.
- Then multiply by 60 months.
- Subtract 2-3% for miscellaneous charges.
- The resulting figures are approximate car values you are eligible for.
Considering the economic effectiveness, 70% of the earning people in the UAE are immigrants. To make ease of buying and utilizing the resources in car finance, UAE finances are involved in formulating strategies that have mutual responsibilities in risk factors between customers and companies. This reduces the procedure and lowers the interest rates.
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