Is Your Car Loan Still Active? Here’s How You Can Still Sell It

11 minutes ago
5 min read

Selling a car is usually a straightforward process — you find a buyer, negotiate the price, and complete the paperwork. But what if you haven’t paid off your car loan yet? Can you still sell your vehicle in Dubai if the loan is active? The short answer is yes, you can — but there are some important steps and legalities to consider.

At Car Buyers Dubai, we’ve helped hundreds of customers sell their financed cars quickly and legally. This blog will walk you through how to sell your car even if the loan is still active and how we make the process easy for you.

Understanding a Car Loan and Ownership in Dubai

When you finance a car in the UAE, the bank technically owns the vehicle until the loan is fully paid off. You’re considered the registered user, but not the legal owner. This means the car will have a mortgage tag (commonly referred to as a bank loan status) on it in the RTA (Roads and Transport Authority) system. You cannot transfer ownership to a new buyer until this mortgage is cleared.

But that doesn't mean you're stuck — it simply means there's a process to follow.

Can You Sell a Car With an Active Loan?

Yes, but the loan must be settled before ownership can change hands. This can be done in a few ways:

You pay off the remaining loan amount yourself.
The buyer pays the remaining loan directly to the bank.
A professional car buying service like Car Buyers Dubai handles the settlement on your behalf.

Let’s break down each option.

Option 1: Settle the Loan Yourself

If you have the funds, the simplest way to sell your car is to repay the loan in full before listing the vehicle for sale. Here's how:

Contact your bank to find out the outstanding loan balance (this is called a loan clearance letter or liability letter).
Repay the loan at the bank branch or via online banking.
The bank will then remove the mortgage from the RTA system within a few business days.
Once cleared, you can proceed to sell or transfer the car as normal.

Pros: Full control over the process, simpler transaction later.Cons: Requires upfront funds, and some people don’t have that liquidity.

Option 2: The Buyer Pays Off the Loan

If you’ve already found a buyer, they may agree to pay the remaining loan balance directly to the bank. This is often done in private car sales. The process looks like this:

You both go to the bank to request the liability letter.
The buyer pays the loan balance directly to the bank.
The bank issues a clearance certificate.
Ownership is transferred at the RTA.

Risks: This method requires a high level of trust between the buyer and seller. If not done carefully, it could lead to misunderstandings or financial risk.

Option 3: Use Car Buyers Dubai for a Fast and Secure Process

At Car Buyers Dubai, we offer a fast, secure and legal way to sell your car with an active loan — without the stress of handling the bank or buyer yourself.

Here’s how it works:

Get a Free EvaluationContact us via www.carbuyersdubai.com or WhatsApp us at +971 58 883 5488 to get an instant car valuation.
We Settle the LoanOnce you agree on the price, we contact your bank, request the liability letter, and settle the loan directly. You don’t have to visit the bank yourself.
We Pay You the Difference in CashIf the car is worth more than the loan balance, you receive the difference in cash on the spot — no waiting, no risk.
We Handle the PaperworkAfter the mortgage is cleared, we handle all the RTA paperwork to transfer ownership.

Why choose Car Buyers Dubai?

Instant valuation
Fast loan clearance
Immediate cash payment
Complete paperwork support

Real Example: Selling a Financed Car with Car Buyers Dubai

Let’s say you have a 2021 Toyota Corolla, and your outstanding loan is AED 25,000. We evaluate the car and offer you AED 40,000. Here’s what happens:

We pay AED 25,000 directly to the bank.
You receive AED 15,000 cash immediately.
We handle the mortgage clearance and RTA process.

It’s that simple.

What Documents Do You Need?

To sell a financed car in Dubai, you’ll need:

Emirates ID
Vehicle registration card (Mulkiya)
Loan clearance letter (if you're clearing the loan yourself)
No Objection Certificate (NOC) from the bank
Valid car insurance (until transfer is complete)

If you’re working with us, we’ll help you gather these documents and guide you through every step.

What About Early Settlement Fees?

Banks in the UAE may charge a small fee for early loan settlement — typically 1% of the remaining loan amount (or capped at AED 10,000). This fee should be factored into your decision to sell.

We’ll help you understand this cost upfront so there are no surprises.

Can You Sell to a Dealer?

Yes, some dealerships may buy your financed car and handle the loan settlement. However, dealers often offer lower prices than private buyers or direct car buying services.

At Car Buyers Dubai, our offers are competitive and often higher than dealership trade-in values. Plus, we offer the convenience of instant payment and loan settlement.

Tips to Maximize the Value of Your Financed Car

Here’s how to get the best deal for your car — even if you still owe money:

Keep It Clean and ServicedA well-maintained vehicle fetches a better price. Have it cleaned, and keep service records handy.
Know the Market ValueUse our online valuation tool to get an estimate before negotiating.
Be TransparentDisclose that the car has a loan — honesty builds trust and makes the process smoother.
Act QuicklyCars depreciate rapidly in Dubai. Don’t wait until the value drops below your loan balance.

What If You Owe More Than the Car’s Worth?

This is called negative equity — when your loan balance exceeds your car’s market value. For example:

Car value: AED 35,000
Loan: AED 45,000
Difference: AED -10,000

In this case, you’ll need to pay the difference to the bank or buyer.

At Car Buyers Dubai, we’ll help you understand your options. In some cases, we can offer custom solutions to help minimize your loss or structure a plan that works for both parties.

Frequently Asked Questions

Q: Can I sell my car if I’m behind on payments?

A: Technically yes, but the bank will need the full loan balance paid off before releasing the mortgage. If you're behind, talk to us — we may be able to help resolve the issue.

Q: How long does the process take?

A: If you're working with Car Buyers Dubai, we can settle loans and complete the sale within 24-48 hours in most cases.

Q: Can I trade in my financed car for another vehicle?

A: Yes, but the dealer will usually deduct the loan balance from the trade-in offer. You may not get the full market value. Selling to us might yield a better deal.

Why Choose Car Buyers Dubai?

We’ve earned a reputation as one of the most trusted car buying services in the UAE. Here’s what makes us stand out:

✅ Fast Loan Settlements✅ Immediate Cash Payment✅ 100% Transparent Process✅ No Hidden Charges✅ Free Car Valuation✅ We Come to You

Whether your car is fully paid or still under loan, we make selling easy. Visit us at www.carbuyersdubai.com or WhatsApp us directly at +971 58 883 5488 to get started.