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. In UAE, EMIs are commonly used for personal loans, car loans, and home loans.

2. How EMI is Calculated

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 accounts for both principal repayment and interest payment components that change over the loan term.

3. Loan Parameters in UAE

Details: In Dubai/UAE, personal loans typically have terms from 6 months to 5 years (60 months), with interest rates varying between 5% to 20% depending on the bank and borrower's profile.

4. Using the Calculator

Tips: Enter principal amount in AED, annual interest rate in percentage, and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the maximum personal loan amount in UAE?
A: Typically up to 20 times your monthly salary, with a maximum of AED 2 million in most UAE banks.

Q2: Are there any hidden charges in UAE personal loans?
A: Some banks charge processing fees (1-2% of loan amount), early settlement fees, or insurance charges. Always read the terms carefully.

Q3: How does salary transfer affect loan terms?
A: In UAE, transferring your salary to the lending bank often qualifies you for lower interest rates and better terms.

Q4: Can expats get personal loans in UAE?
A: Yes, most banks offer personal loans to expats with valid residency visas and minimum salary requirements (usually AED 5,000-8,000 per month).

Q5: What happens if I miss an EMI payment?
A: Late payments incur penalties (typically 1% per month) and may affect your credit score with the Al Etihad Credit Bureau.