1. What is Auto Loan Payment Calculation?

The auto loan payment calculation determines your fixed monthly payment amount based on the loan amount, interest rate, and loan term. This helps you budget for your car purchase in the UAE.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( PMT \) — Monthly payment
• \( P \) — Principal loan amount (AED)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula accounts for compound interest over the life of the loan to determine a fixed monthly payment amount.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps you determine affordability, compare loan offers, and plan your finances when purchasing a vehicle in the UAE.

4. Using the Calculator

Tips: Enter the loan amount in AED, annual interest rate (without % sign), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical auto loan interest rate in UAE?
A: Rates vary but typically range from 2.5% to 5% for new cars and 5% to 10% for used cars, depending on your credit profile.

Q2: What loan terms are available in UAE?
A: Most banks offer terms from 1 to 5 years, with some extending to 7 years for new cars.

Q3: Are there other costs besides the monthly payment?
A: Yes, consider insurance (typically 5% of car value), registration fees, and possible down payment requirements.

Q4: Can I get pre-approved for an auto loan in UAE?
A: Yes, most banks offer pre-approval which helps you know your budget before car shopping.

Q5: What's better - lower monthly payment or shorter term?
A: Shorter terms mean higher payments but less total interest paid. Choose based on your budget and financial goals.