1. What is the Loan Payment Formula?

The loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term, including interest. It's commonly used by Emirates NBD and other banks in the UAE for personal loans, auto loans, and mortgages.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula accounts for both principal repayment and interest charges over the loan term, calculating a fixed monthly payment that fully amortizes the loan.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also helps compare different loan offers from Emirates NBD and other UAE banks.

4. Using the Calculator

Tips: Enter the principal amount in AED, annual interest rate (without % sign), and loan term in years. For Emirates NBD personal loans, typical rates range from 5% to 20% depending on your profile.

5. Frequently Asked Questions (FAQ)

Q1: Does this include Emirates NBD processing fees?
A: No, this calculates only the principal and interest. Emirates NBD may charge additional fees (1-5% of loan amount) not included here.

Q2: What's the maximum loan amount from Emirates NBD?
A: For UAE residents, personal loans typically go up to 20x your monthly salary, with a maximum of AED 4 million.

Q3: Are there prepayment penalties?
A: Emirates NBD may charge 1% early settlement fee if you pay off the loan early, depending on the product.

Q4: How does salary transfer affect the rate?
A: Emirates NBD often offers lower rates (1-2% reduction) if you transfer your salary to them.

Q5: What's the typical loan term in UAE?
A: Personal loans usually have 1-4 year terms, while auto loans typically run 1-5 years, and mortgages up to 25 years.