KFS Auto Loan

Auto Loan – Variable Interest Rate

Auto Loan is intended to fulfil your dream of owning a vehicle. This product follows an installment payment structure.

KFS provides you with indicative IMPORTANT information about the commercial terms applicable to Al Khaliji France S.A Auto Loans including interest, fees and charges of this product.

We kindly request you to carefully read and understand the document, if you are considering applying for a Home Loan from Al Khaliji S.A France.

By signing this KFS document, you consent that you have read and understood the Auto Loan features and benefits.

For more detailed information, please refer to the facility offer letter or visit AKF website at www.alkhaliji.ae to view all applicable fees and interest charges and the General Terms and Conditions.

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Key Product Details

Loan Type

Auto Loan

Criteria

UAE Nationals

Aged between 21 and 65 years (at the loan maturity)
Confirmed Employee.
Self Employed professionals – Min length of service: 2 years
Businessmen – Min length of service: 3 years
Total monthly income / salary starting from AED 25,000/-

Expatriates

Aged between 21 and 60 years (at the loan maturity)
Confirmed Employee
Self Employed professionals – Min length of service: 2 years
Businessmen – Min length of service: 3 years
Total monthly income / salary starting from AED 25,000/-

Loan Currency

AED

Loan Amount

Min AED 50,000/- and Max AED 300,000/- up to 80% of the vehicle cost including accessories

Down Payment

Minimum 20% of the total vehicle cost

Loan Period

Min 12 months (1 year) and Max 60 months (5 years)

Debt Burden Ratio

Not to exceed 50%

Annualized Interest Rate (AIR)

Annualized Interest rate is calculated based on individual profile such as monthly salary, employer, loan amount, existing debt and other credit parameters.
AIR is subject to be revision from time to time.

Interest rate is variable linked to Emirates Interbank Offered Rate (EIBOR) (i.e. EIBOR + fixed margin).
Interest is calculated daily and charged monthly using the following formula:
Outstanding Principal Balance x Interest rate x (1/360) for one day (as we follow 30/360 Basis)
Variable interest rate is linked to EIBOR (The Emirates Interbank Offered Rate) i.e. EIBOR + Fixed Margin.

Variable rate linked to 1-month, 3-month or 6-month will be reviewed monthly, quarterly or half-yearly as per the option selected by you. Minimum Auto Loan rate called “Floor rate” shall be applicable.

This rate will be applicable only in the case when variable rate based on EIBOR falls below the floor rate.

Equated monthly installment (EMI)

EMI is calculated by adding the principal loan amount and total interest and dividing this total by the loan period in months. This is done using reducing balance method which means that as your loan balance reduces, with every Equated Monthly Installment (EMI) payment, the interest portion of your EMI will reduce.
The Equated monthly installment (EMI) will change depending on the actual EIBOR rate on the review date.

ILLUSTRATION**:

a. Vehicle Cost	AED 100,000/-
Down Payment	AED 20,000/-
Loan Amount	AED 80,000/-
b. Interest Rate	5.50%*
c. Tenure	60 months
d. Interest Amount	AED 12,008.73
e. Total Repayment Amount (a)+(d)	AED 92,008.73
EMI	AED 1,533/-

Interest rate calculation:

Total repayment amount = Principal + Interest

Interest amount = Principal × Interest Rate × Tenure

*If the 6-month EIBOR is 1.50% on the review date, then the revised interest rate will be 5.50% (1.50% + 4% Fixed Margin) subject to a minimum loan rate of 4.5%. Floor rate will be applicable only when 6-Month EIBOR rate falls below 0.50%.

**This calculation is tentative and may vary depending on the loan terms and the Bank’s policies.

APR (Annual Percentage Rate)

APR is the annual percentage rate which is inclusive of the annual interest rate (based on the reducing balance basis), in addition to the processing fees and insurance premium (if applicable) based on maximum tenure permissible for the product.
Example: As per Illustration reducing interest rate to be assumed at 5.50% p.a. + 0.53% amortized processing fees (1%+VAT over average life tenure of 4 years) = 6.03%

Processing Fees

1.00% of the loan amount in addition to a 5% VAT on the applicable fee (Minimum AED 525/- and maximum AED 2,625/-).
This fee is applicable for processing your loan request. This is one time fee and is charged upfront.

Impact on EMI if EIBOR Changes

If 1-Month EIBOR is	EMI
1.75%	AED 1,543 /-
2.00%	AED 1,552/-

Scenario 1: 1 Month EIBOR increases to 1.75 % p.a.
If 1 month EIBOR increases to 1.75 % on review date then revised interest rate will be 5.75% ( 1.75 % + 4% fixed margin)
Interest amount: Principal X Interest X Tenure = 12,554.58
Total repayment = Principal + Interest = AED 92,554.58
EMI = Total Repayment / Tenure =92,554.58/60 = AED 1,543

Scenario 2: 1 Month EIBOR increases to 2.00% p.a.
If 1-month EIBOR increases to 2.00 % on review date then revised interest rate will be 6.00% (2.00 % + 4 % fixed margin)
Interest amount: Principal X Interest X Tenure = AED 13,100.43
Total repayment = Principal + Interest = AED 93,100.436
EMI = Total Repayment / Tenure =93,100.43 /60 = AED 1,552

Note: Conversion factor applied ( 1.832) to convert variable rate to flat rate

Installment Deferment

This fee is charged for any request to postpone / defer a loan payment.
AED 100/- is applicable for installment deferral request in addition to a 5% VAT on the applicable fee.

Early Settlement

1.00% of the Settled loan amount: max AED 10,000/- in addition to a 5% VAT on the applicable fee
This fee is applicable on all early settlement requests.
Example: Outstanding principal amount AED 25,000/- then early settlement fee @1.05% - AED 262.50/-
Please refer the Offer Letter for further details on Early Settlement

Loan Re-scheduling Fee

Any loan rescheduling request is subject to a fee of Any loan rescheduling request is subject to a fee of AED 250/- in addition to a 5% VAT on the applicable fee
This fee is charged for any request to reschedule the loan tenure.
Loan re-scheduling requests are subject to the bank’ sole discretion.

Late payment of installment

Any late payment will be charged when we do not receive monthly repayment from you, in full, on its due date
Late payment of installments will incur a fee of AED 200 /- in addition to a 5% VAT on the applicable fee

Loan Top-Up Fee

1.05% of Top Up amount -Min AED 525/- and Max AED 2,625/- inclusive of VAT

Important Links

For detailed and latest fees and charges and other product please visit our website www.alkhaliji.ae

Additional Information

The Loan amount consumers are eligible for and interest rate offered may differ from the illustrative example shown above. This depends on the consumers credit profile and affordability assessment of the bank
Bank reserves the right to decline any customer application at its sole discretion
The bank reserves full-unrestricted rights to modify its Terms and conditions offered and revise the rates applied on Fees and Interest Charges at any time by giving a written notice to the customers registered contact details with 60 days prior notice of effecting such charges wherever applicable
All interest charges applicable are calculated from the date of loan disbursal
In case you fail to fulfil your obligations as per the Terms and Conditions, before and during your relationship with us, there will be consequences including but not limited to penalties
Bank may debit the Customer’s account with any charges, expenses or commission payable against the banking services rendered in accordance with the approved and announced banking charges and commission as notified to the customer from time to time
The Bank will hold security over the vehicle until the loan is repaid in full
The Bank will not charge interest on the accrued interest
The cooling-off period allows you to cancel the product within five (5) business days of signing the application or offer letter and the Bank will not be able to proceed until this period expires, unless you have waived this right. To cancel the application or offer during the cooling period you must provide notice to the bank.
The data privacy prescribes rules and regulations regarding the collection, handling, disclosures and use of personal data in the bank. Kindly visit www.alkhaliji.ae for the details on Privacy Policy of the Bank.

Important Notes

If you fail to meet the monthly EMI/repayments on your loan, your account will go into arrears and incur late payment fees.
AKF will report any default or payment delays to Al Etihad Credit Bureau (AECB), which may impact the credit history and credit score of the Customer.
Missing repayments may affect your credit rating and limit your ability to borrow/obtain financing in future.
You have the right to a Cooling-off Period of 5 complete business days at time of signing the contract for the purchase of a Financial Product or Service or any other product regulated by the Central Bank.
Refinancing your loans may take longer to pay off then your previous loan and will result in paying more in interest includes Top-up, Restructuring or Rescheduling.
Breach by the Customer of the AKF Terms and Conditions, applicable to the Customer, available on the AKF website www.alkhaliji.ae or on the Customer’s Application Form, at any point during the Customer relationship with AKF, before or afterwards, as applicable, may lead to wide range of consequences, including but not limited to cancellation of the Customer’s Loan (in such case, all amounts due under a Loan shall become immediately due and payable), suspension of offers and benefits and/or cancellation of the Customer’s relationship with AKF.

Apart from that, AKF may exercise any of its rights stated in the AKF Terms and Conditions, including but not limited to enforcing any applicable Security provided by the Customer or available under the Applicable Laws (If you do not keep up your payments, you may lose your asset).