Car Loan Checklist for the First-Time Buyer

July 17, 2018 Guest Author

Been dreaming of owning your first car?

Stop dreaming and start driving. Turn your car dreams into reality by taking steps to study and review the options available to finance your first vehicle and to finally be a responsible car owner.

Reality Check

Imagining yourself cruising down highways but not having a car of your own can really dampen your mood. You may want to take a road trip with friends. Or perhaps you’d like to go to fun places with your family. Wherever you’re headed, the inconvenience of not having a car is raining on your parade.

Cheer up. There is a quick and easy way to improve your mood. Today, you can get faster, easier and more convenient ways to get a personal loan for a car purchase.

Read on below to find out the basic considerations you need to know about before taking an auto loan. I also recommend that you learn the common terminology, which can help you feel confident when securing financing.

1. Review your finances

You have to know how much you have before you can go about planning to own a car. Being in touch with reality is a crucial step to make your dreams come true. This is to give you a concrete idea of where you are financially. This way you can take action and work towards a sound budget that won’t stress your wallet.

When you know where you stand, then you have a clearer picture on where to go and how to get there.

Below are the usual requirements to get a car loan in the UAE, though similar rules apply in the USA or any location around the world:

You need to be at least 21 years of age
You must have a minimum monthly income of AED 5,000.
If you have your own business, you must not exceed the age of 65 to qualify for a loan.
You must also have at least AED 250,000 as monthly average turnover.

To make the process easier, you can check your eligibility for a car loan by taking a quick online assessment. This online financial health calculator gives you the ease and convenience of checking whether you are ready to be a vehicle owner or not.

2. Shop around

If you have been determined to be eligible for a car loan, you can now go to the exciting part – choosing your car.

Ask yourself if you need a brand new car or you can already satisfy your car cravings with a pre-owned one. The UAE is rife with options as cars are relatively cheaper and fuel prices are more affordable.

List down all the things that you need from a car. On another column, jot down all the nice-things-to-have. This will give you a fair idea on what features you absolutely need in a vehicle and which ones you want but can live without.

It will be your guide on searching for the car that suits you best. You can go online or you can personally check out car showrooms to have a better look and feel as well as get answers from a sales officer regarding your possible car ownership.

3. Know your terms

Shopping around for car options will also give you an idea on how much you are willing to spend.

With the amount involved regarding the car of your choice, you can now check which loan terms you can best work with.

You can either choose a short-term loan where you initially have to shell out more but have the peace of mind of being freed from your debt obligations faster. Or you can also opt for a long-term loan that affords you lower monthly installments for your car. This will also allow you to manage your money and allot your extra cash for other investments or store it in a high-yield savings account.

You can also choose from different payment terms that most suit your financial capacity. There are banks that give you as much as 80 percent of the car value and for as long as 60 months to pay.

4. Choose a bank that makes life simpler

When applying for a car loan, you must go with the one that you can most trust your hard-earned money with.

Choose the one with the most competitive rates, round-the-clock convenience and the simplest terms. There’s even a bank that can assist you with insurance finance.

Banks that make it easier for you to qualify for financing can be a good choice if you need a car now. They typically don’t charge extra fees for early settlement of loans, and large banks may respond to your queries on the same day. You would feel more at peace when you transact with a bank that is fast, friendly and is all about making your life easier and simpler.

5. Read the fine print

No matter how excited you are to get approved for a car loan, do not forget to read the fine print.

Go through the documents line by line so you do not miss out on important information such as loan amounts, payment terms, interest rates and other such crucial details. If you do not understand the terms, feel free to ask your car loan officer.

Reading and understanding the fine print will protect you from missing any vital information and make your car-owning experience a breeze.

Drive Your Dream Car Now

Selecting a car and a loan that goes with it can be a meticulous task. But it’s one that you need to do. Part of the responsibility that comes with owning your own car is securing a loan and making payments on time.

It is a relief that there are reputable banks that offer fast and convenient car loan services and uncomplicated packages. With their quick and simple offers, your dream of driving the car of your choice can easily become a reality.