Scrap Car With Loan in UAE: What You Need to Know Before You Start

Introduction

Many UAE car owners find themselves in a tricky situation: the car is old, damaged, or no longer worth repairing — but it still has an outstanding bank loan. The big question becomes: Can you scrap your car while the loan is still active?

The short answer: You can’t scrap a financed car until the loan is cleared or officially handled.But there are practical solutions that make the process easier, especially when working with trusted services like Scrap My Car UAE.

1. Why You Can’t Scrap a Car With Active Finance

In the UAE, any vehicle with an outstanding loan is officially under the bank’s ownership until the loan is cleared. The bank places something called a mortgage block on the car, which prevents any major action such as:

• Scrapping the car

• Selling the car

• Transferring ownership

This block must be removed before the vehicle is accepted by any scrapyard or buyer.

2. How to Clear a Loan Before Scrapping Your Car

To proceed with scrapping, the loan must be closed with the bank. This usually involves:

• Paying off the remaining loan amount

• Requesting a loan clearance letter

• Waiting for the mortgage to be removed from the RTA system

Once cleared, you’ll be free to scrap the car legally.

3. Solutions for Handling a Scrap Car With Loan UAE Situation

If you’re stuck because the car is no longer worth repairing or selling, here are possible solutions:

✔ Option 1: Settle the Loan and Then Scrap

If the remaining loan amount is low, this is the fastest and simplest option.

✔ Option 2: Ask the Bank for Settlement Assistance

Some banks offer:

• Early settlement discounts

• Extensions

• Special consideration in cases of total loss damage

✔ Option 3: Use the Car’s Scrap Value to Reduce the Loan Amount

With Scrap My Car UAE, you can get a valuation first.If the car is still movable or has valuable parts, you may be able to use the scrap amount to help with the final settlement.

✔ Option 4: Insurance Total Loss (If Applicable)

If your car is damaged from an accident, the insurance company may declare it a total loss, helping cover remaining loan amounts.

4. What Documents You Need After Loan Clearance

Once the loan is closed, you’ll need:

• Emirates ID

• Car registration card (Mulkiya)

• Bank’s loan clearance letter

• RTA mortgage release confirmation

After that, the scrapping process is fast, especially with professional assistance.

5. How Scrap My Car UAE Helps in This Situation

At Scrap My Car UAE, we work with customers every day who face loan-related challenges. Here’s how we help:

• Provide a quick scrap evaluation before you settle

• Guide you on loan clearance steps

• Assist with RTA procedures

• Offer instant pickup once the mortgage is removed

• Ensure legal and hassle-free scrapping

You get transparency, support, and fair scrap value — even if your car is old, damaged, or non-running.

Final Thoughts

You can scrap your car in the UAE, even with outstanding finance — but only after the loan is cleared. Understanding your options makes the process easier, especially when your car is no longer worth repairing.

If your car still has a loan and you’re unsure what to do next, Scrap My Car UAE can guide you through the entire process, from evaluation to paperwork to final scrapping.

Call or WhatsApp 055 745 83 22, visit scrapmycarUAE.com, or check out their Facebook page scrapmycarUAE for hassle-free service.