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Personal Loan Calculator In UAE

Personal Loan Payment Formula:

\[ PMT = P \times \frac{r (1 + r)^n}{(1 + r)^n - 1} \]

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%
years

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1. What is the Personal Loan Payment Formula?

The Personal Loan Payment Formula calculates the fixed monthly payment required to repay a loan over a specified term, including interest. It's widely used by banks and financial institutions in the UAE to determine loan repayments.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

\[ PMT = P \times \frac{r (1 + r)^n}{(1 + r)^n - 1} \]

Where:

Explanation: The formula calculates the fixed payment needed to pay off the loan with interest over the specified term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing different loan offers in the UAE. It shows the true cost of borrowing.

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 interest rate for personal loans in UAE?
A: Rates vary but typically range from 5% to 20% depending on the bank, loan amount, and your credit profile.

Q2: Are there other fees besides interest?
A: Many UAE banks charge processing fees (1-3% of loan amount), early settlement fees, and sometimes insurance.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total cost.

Q4: Can I get a personal loan without salary transfer in UAE?
A: Some banks offer non-salary transfer loans but usually at higher interest rates and with stricter conditions.

Q5: What's the maximum loan amount I can get?
A: In UAE, typically up to 20 times your monthly salary, with some banks offering up to AED 2 million for qualified applicants.

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