1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (AED)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Loan term in months
• \( PMT \) — Monthly EMI payment (AED)

Explanation: The formula calculates the fixed monthly payment that would completely pay off the loan over its term, including both principal and interest.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their repayment obligations, compare loan offers from different UAE banks, and plan their finances accordingly.

4. Using the Calculator

Tips: Enter the principal amount in AED, annual interest rate (as offered by UAE banks), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is typical interest rate for personal loans in UAE?
A: Rates vary by bank and customer profile, typically ranging from 5% to 20% annually for UAE residents.

Q2: How does loan term affect EMI?
A: Longer terms reduce EMI but increase total interest paid. Shorter terms increase EMI but reduce total interest.

Q3: Are there other charges besides interest?
A: UAE banks may charge processing fees, early settlement fees, or insurance premiums - these aren't included in EMI calculation.

Q4: Can I prepay my loan in UAE?
A: Most UAE banks allow prepayment but may charge 1-3% of outstanding amount as early settlement fee.

Q5: How accurate is this calculator?
A: It provides standard EMI calculation. For exact figures, consult your bank as they may use slightly different rounding methods.