1. What is Personal Loan EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower makes to a lender at a specified date each calendar month. In the UAE, personal loans typically have fixed interest rates and repayment periods ranging from 1 to 5 years.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( PMT \) — Monthly payment (EMI)
• \( P \) — Principal loan amount
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Number of monthly installments (loan term in years × 12)

Explanation: The formula calculates the fixed monthly payment that will completely pay off the loan (principal + interest) over the loan term.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their repayment obligations, plan their finances, and compare different loan offers in the UAE market.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

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

Q2: Are there any other charges besides interest?
A: UAE banks may charge processing fees (1-2% of loan amount), insurance, and late payment fees.

Q3: Can I prepay my personal loan in UAE?
A: Most banks allow prepayment but may charge 1-3% of the outstanding amount as early settlement fee.

Q4: How does reducing loan term affect EMI?
A: Shorter term increases EMI but reduces total interest paid. Longer term decreases EMI but increases total interest.

Q5: What is the maximum personal loan amount in UAE?
A: For expats, typically 15-20 times monthly salary; for UAE nationals, up to 25 times monthly salary.