Car-financing rules (SAMA): tenor, salary cap and early settlement
Car loans in Saudi Arabia are governed by Saudi Central Bank (SAMA) rules: the maximum tenor is 60 months, and your total monthly credit obligations may not exceed 33.33% of your salary (25% of a pension for retirees). Every offer must disclose the APR, which includes fees — compare offers by APR, not the quoted "flat rate": a 2.5% flat rate is roughly a 4.7% APR on a five-year loan. Effective 2026 APRs run roughly 3.45% to 9.44% depending on bank and offer.
You also have important rights: early settlement is available at any time with a fee capped at 3 months' profit on the declining balance, and partial early payments (one full installment or more) must be accepted. Expect the bank to require comprehensive insurance for the loan term.
Steps
- Check affordability first: your existing plus new monthly installments must not exceed 33.33% of your gross salary (25% of a pension for retirees).
- Keep the term within the legal cap: 60 months maximum.
- Get offers from several lenders and compare them by APR only (effective 2026 range roughly 3.45%-9.44%).
- Review the contract before signing: installment amount, total financing cost, any deferred balloon payment, and the comprehensive-insurance requirement for the term.
- Know your early-settlement right: the fee is capped at 3 months' profit on the declining balance, and partial payments (one full installment or more) must be accepted.
- When selling or transferring a financed car: request the settlement letter and confirm the three-month cap was applied.
Fees & costs
| Item | Amount | Notes |
|---|---|---|
| Maximum tenor | 60 months | SAMA rule |
| Monthly-obligations cap | 33.33% of salary | 25% of pension for retirees |
| Early-settlement fee | Max 3 months' profit | On the declining balance |
| Effective 2026 APRs | Roughly 3.45%-9.44% | By bank and offer — APR disclosure is mandatory |
Common questions
What is the maximum car-loan term in Saudi Arabia?
60 months (5 years) under SAMA rules — no bank or finance company may exceed it — with monthly obligations capped at 33.33% of salary.
How much can early settlement of a car loan cost?
At most 3 months' profit calculated on the declining balance — the lender cannot charge the remaining years' profit. The earlier you settle, the more you save.
Why compare offers by APR instead of the flat rate?
Because the APR includes fees and reflects the true cost, and disclosing it is mandatory in every offer: a 2.5% flat rate is roughly a 4.7% APR over five years, and effective 2026 APRs run about 3.45%-9.44%.
Guidance only — the official authority is the final reference.