Flat rate vs reducing rate
UAE banks often advertise car loans with a flat rate. A flat rate charges interest on the full loan for the whole term, even as you pay it down. A reducing rate charges interest only on what you still owe.
That means a 3% flat rate costs roughly the same as a 5.5% to 6% reducing rate. Switch between the two above to compare a quote on equal terms.
UAE car loan rules
- Banks can finance up to 80% of the car's value, so plan for at least 20% down.
- The longest term is 60 months (5 years).
- All your loan payments together can't be more than 50% of your salary.
Common questions
What is a flat rate on a car loan?
Interest charged on the original loan amount for the whole term. It looks lower than a reducing rate but costs almost twice as much in interest for the same number.
How much down payment do I need for a car in the UAE?
Usually at least 20%, because banks can finance up to 80% of the car's value.
What is the longest car loan term in the UAE?
60 months, or 5 years.
Sources
Related calculators
This calculator gives an estimate for guidance only. It is not legal or financial advice. Check important figures with the relevant authority or a qualified adviser.