Best Guide to 0% Interest Car Loans in UAE
A zero-interest car loan (also called 0% financing) lets you buy a car and repay only the original price of the vehicle, without any extra interest.
For example, if the car costs AED 120,000, you simply pay back AED 120,000 through fixed monthly installments, with no additional charges added on top.
In the UAE, these offers are usually limited-time promotions run by banks and dealerships. They are available only on specific new car models and sometimes on certified pre-owned vehicles. The promotion period can last a few months to a full year, so timing matters.
Many packages also come with free extras such as first-year insurance, registration, or service packages, making the deal even sweeter.
How Does a Zero-Interest Car Loan Work?
- You choose an eligible car model that is part of the 0% campaign.
- The bank or dealership finances the full amount (or the remaining amount after your down payment).
- You repay only the actual car price in equal monthly installments, usually over 12-60 months.
- Because there is no interest, your total repayment equals the car’s original price.
Who Can Apply? Eligibility Requirements
Every bank follows UAE Central Bank rules, but the basic criteria for 0% car loans are:
Requirement |
Details |
|
Age |
Minimum 21 years (max 65–70 at the end of the loan term) |
|
Residency |
Valid UAE residence visa + Emirates ID |
|
Minimum Salary |
Usually AED 5,000–AED 10,000 (varies by bank and car value) |
|
Down Payment |
Minimum 20% required by law (some promotions allow 0–10% on new cars) |
|
Credit History |
Good credit score preferred; harder to get approved with no credit history |
|
Employment |
Salaried or self-employed with proven income |
Documents You Need
- Valid Emirates ID and passport copy
- Salary certificate or salary transfer letter
- Last 3-6 months bank statements
- Valid UAE driving licence
- Car quotation from the dealership
- For used cars: valuation certificate, mulkiya, and existing insurance
Where to Find 0% Car Finance Offers in the UAE Right Now
Top sources:
- Major banks: Emirates NBD, ADCB, FAB, Dubai Islamic Bank, RAKBANK
- Dealerships: Al Tayer, Al Nabooda, Galadari (for brands like Toyota, Lexus, Porsche, Ford)
- Chinese EV brands: BYD, MG, and Geely often run long-term 0% campaigns
- Online platforms: dubizzle Autos, shows live 0% offers, and has its own finance partners for new & used cars
Key Advantages of Choosing a 0% Car Loan
- Pay exactly the car’s price, no hidden interest costs
- Much lower monthly payments than regular loans (2.5-4.99% interest)
- Often bundled with free insurance, registration, and service packages
- Ability to buy a better or higher-spec model within the same budget
- Helps budget-conscious buyers, especially young professionals and expats
0% Car Loan vs Regular Car Loan
Feature |
0% Interest Loan |
Regular Car Loan |
|
Interest Rate |
0% |
1.99% - 4.99% (reducing rate) |
|
Loan Tenure |
Usually 1–5 years |
Up to 7 years |
|
Down Payment |
20% minimum (some promos lower) |
20% minimum |
|
Monthly Payment |
Lower (no interest) |
Higher because of interest |
|
Processing Fees |
Sometimes slightly higher |
Usually lower |
|
Credit Score Required |
Stricter (good history preferred) |
More flexible |
|
Availability |
Limited models & time periods |
Available on almost any car |
Important Things to Remember
- The car price might be slightly higher than the cash price (dealers sometimes inflate it to cover their costs). Always compare cash vs finance price.
- Promotions can end suddenly, but apply while the offer is active.
- Early settlement may still attract a small fee (1-2% of the remaining amount).
- Missing even one payment can cancel the 0% benefit in some contracts.
FAQs
What does a 0% car loan really mean in the UAE?
It means you repay only the original price of the car with no interest added. Total cost = car price only.
Is a down payment mandatory for 0% car loans?
Yes, UAE law requires at least a 20% down payment for most vehicles. Some new-car promotions reduce it to 0-15%, but 20% is the standard minimum.
Can expats get a zero-interest car loan?
Absolutely yes! As long as you have a valid residence visa, an Emirates ID, and meet the salary requirement.
Are used cars eligible for 0% financing?
Rarely. 99% of 0% offers are for brand-new vehicles. A few certified pre-owned programs may include low or 0% rates, but not a true zero.
Which banks have the best 0% car loan offers?
Currently, Emirates NBD, ADCB, FAB, and RAKBANK lead, plus direct dealership finance from BYD, MG, Toyota, and Lexus.
How long do these 0% promotions last?
Most run for 3-12 months. Some EV brands extend them for 2-3 years as part of their launch strategy.
