1. What is the Personal Loan Calculator?

The Personal Loan Calculator helps you estimate your monthly payments for loans in UAE. It calculates the fixed monthly payment (PMT) required to repay a loan (PV) over a specified term at a given interest rate.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( PMT \) — Monthly payment (AED)
• \( PV \) — Loan amount (AED)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Loan term in months

Explanation: The formula accounts for the time value of money, calculating the fixed payment needed to fully amortize the loan over its term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing loan offers. It shows the true cost of borrowing by including both principal and interest.

4. Using the Calculator

Tips: Enter loan amount in AED, annual interest rate (without % sign), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate in UAE?
A: Personal loan rates in UAE typically range from 3% to 20% APR depending on your bank, salary, and credit history.

Q2: Are there other fees besides interest?
A: Some banks charge processing fees (1-2% of loan amount), early settlement fees, or insurance costs not included in this calculation.

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

Q4: Can I calculate for different payment frequencies?
A: This calculator assumes monthly payments. For weekly or quarterly payments, the formula would need adjustment.

Q5: Is this calculation accurate for all UAE banks?
A: Most UAE banks use this standard formula, but always confirm with your specific bank as some may use slightly different methods.