This UAE personal loan calculator turns an advertised rate into the number that actually matters — your monthly instalment — and shows the total interest you will pay. Crucially it lets you compare a bank’s headline flat rate against the true reducing-balance APR that the Central Bank of the UAE requires to be disclosed, because the two can differ by almost a factor of two.
How it works
On a reducing-balance loan, interest is charged only on the outstanding balance, and the monthly instalment uses the standard amortising formula:
M = P · r(1+r)ⁿ ⁄ ((1+r)ⁿ − 1)
where P is the principal, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the term in months. Each payment splits into interest on the current balance plus principal, and the balance falls to zero by the final month.
A flat rate instead charges interest on the original principal for the whole term:
total interest = P × flat rate × years, then M = (P + total interest) ⁄ n
A flat rate always costs more than the same number quoted as reducing-balance, which is why the comparison matters.
Example
Borrow AED 100,000 over 48 months. At a 6% reducing-balance APR the instalment is about AED 2,349/month and total interest near AED 12,762. The same 6% quoted as a flat rate charges 6% × 4 years = AED 24,000 of interest — almost double — for an instalment of about AED 2,583/month.
Notes
Real quotes add arrangement fees, insurance, and early-settlement charges, and Central Bank rules limit instalments to a share of your salary and cap salary-based terms at 48 months. Use this as a planning estimate, then confirm the binding figures on your loan agreement.