There are three types of charges you will have to deal with in your journey to getting a car loan:
1- Interest Rates: There are two types of interest rates
Fixed interest rate is what does not change throughout the period in which you pay back your loan amount. This interest rate varies for each bank, and selecting the best interest rate for yourself is the most beneficial thing you can do to yourself.
Variable Interest Rate does not remain constant and can go up or down throughout the time you are paying back your loan amount. Make sure that you thoroughly ready the terms and conditions of your contract with bank to know exactly you might be paying the bank.
2- Adjustable Interest Rates: These rates are those in which the bank asks you to pay a lower interest rate in the beginning and after that, the rate increases a bit higher (which is agreed upon in loan agreement). If you are looking to get a car loan in Dubai, ensure that you visit different banks and see what all of them are able to offer you, this way you will end up having a much better deal for your car loan.
3- Service Charges: While taking a car loan, you will end up paying for many service charges, these service charges include but not limited to; processing fees, stamp duties, late payment fees, check bouncing fees, fees for account statements and credit reports, etc. There can be more charges, depending on which bank you are dealing with.
Tips and Tricks
When You Should Or Shouldn’t Get A Car Loan?
Getting a car loan should be your last option. Do not get a car loan just because you want to ride a new model car in order to show off.
Also getting a car loan when you do not have a regular and stable income to pay back the loan, is a bad idea and should be avoided.
How Can You Get The Best Deal?
Make sure to research well enough. This research will allow you to compare interest rates of all the banks and will allow you to pick the best option possible. Also having the best deal depends upon your credit history as well, so keep your credit history in a nice form to ensure that you get lowest interest rate possible.
People with bad credit history can use some “Guarantor” to convince bank to lend a car loan, but if you have good credit history with any bank, you won’t have any problem in getting the best deal in car loans possible.
Non Payment Issues
If you do not pay back your installments for your car loan, you have a strong chance of spoiling your credit history, which will create problems for you in future. Normally banks wait for 2-3 months before taking any kind of legal action, after that they take away your car and mark you as a defaulter and share your information with other banks.
