Loan EMI Calculator — Flat vs Reducing
The number banks quote and the number you actually pay.
How it is calculated
A flat rate charges interest on the original amount for the whole term, even as you pay it down. A reducing rate charges interest only on what you still owe. A 4.5% flat loan over four years is roughly an 8.3% reducing-balance loan.
The Central Bank requires banks to disclose the reducing rate, but the flat figure is what the salesman says. This calculator shows both.
Early settlement in the UAE typically costs 1% of the outstanding balance (plus VAT) — and because flat-rate interest is front-loaded, settling early saves less than you expect.
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Open the app →Common questions
Why is my reducing rate almost double the flat rate?
Because flat interest keeps charging on money you have already repaid. Over a 4-year loan the average balance is only about half the original, so the effective rate is roughly 1.8× the flat figure.
What is the maximum personal loan in the UAE?
Central Bank rules cap personal loans at 20× monthly salary, with total instalments no more than 50% of income, over a maximum of 48 months.
Does this include insurance and fees?
No. Add processing fees (typically 1%, capped) and any life-insurance premium the bank attaches to get the true cost.