How to Transfer Car Loan to Another Person in UAE
Buying and selling cars in the UAE is fairly common, but things can get tricky if the car you want to sell (or buy) still has an outstanding loan on it. Many people assume that a financed car cannot be sold until the loan is completely paid off—but in fact, it is possible to transfer a car loan to another person in the UAE, provided you follow the proper process.
This guide breaks down how it works, what documents you need, and the key points to keep in mind.
Can You Transfer a Car Loan in the UAE?
Yes, but only under certain conditions. Banks and finance companies in the UAE allow loan transfers, but they must first evaluate whether the new buyer is eligible to take on the loan. That means the buyer’s credit history, income, and financial stability will be carefully reviewed before approval.
Steps to Transfer a Car Loan in the UAE
1. Inform the Bank or Finance Company
If you plan to sell your car while it’s still financed, your first step is to contact your lender. They will explain whether your specific loan agreement allows transfers and what requirements must be met.
2. Find an Eligible Buyer
The buyer should be someone who is not only interested in the car but also able to qualify for the loan. This often involves submitting salary certificates, bank statements, and Emirates ID copies for bank assessment.
3. Bank Evaluation
The bank will conduct a credit check and financial assessment of the buyer. If the buyer passes, the bank will approve the loan transfer. If not, you may need to settle the loan before selling the car.
4. Clear Outstanding Dues
Any unpaid installments, fines, or pending charges on the car must be cleared before the transfer can proceed.
5. RTA Procedures
Once the bank approves the transfer, you’ll move to the RTA (Roads and Transport Authority) to officially transfer ownership of the car. The bank will release the car under the new buyer’s name, but it remains under finance until the loan is paid off.
6. Insurance Transfer
The new buyer will need to arrange car insurance in their name before the RTA transfer. Some insurers may allow partial transfer of the old policy, while others may require a new one.
Things to Keep in Mind
- Bank Approval is Mandatory: Even if you and the buyer agree, the bank has the final say.
- Processing Fees: Some banks may charge an administrative fee for loan transfer.
- Buyer’s Responsibility: Once the loan is transferred, the buyer is fully responsible for repayments.
- Alternative Option: If a buyer doesn’t qualify for a loan transfer, you may consider settling the loan yourself and then selling the car debt-free.
Final Thoughts
Transferring a car loan in the UAE is straightforward when you know the steps and work closely with your bank. It’s a great way to sell a financed car without having to pay off the entire loan upfront, provided the buyer is financially eligible.
If you’re planning to buy or sell used cars in Dubai, always make sure to check the car’s loan status and confirm the bank’s terms before making a deal.
For the best deals on used cars in Dubai, visit Auto Trader UAE. Whether you’re buying, selling, or just exploring, Auto Trader UAE helps you make informed decisions about your next car.
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