Early settlement fees in the UAE
Updated
Is early settlement capped in the UAE?
Personal and home loans: at most 1% of the outstanding balance or AED 10,000, whichever is less, plus 5% VAT — so never more than 1.05% or AED 10,500. Car loans: 1% of the balance plus VAT with no AED ceiling, so settling AED 60,000 early costs AED 630. During a mortgage's fixed-rate period the bank may charge its actual cost of breaking the fixed rate instead, and Islamic finance must give a rebate that keeps you within the same caps.
| Outstanding balance | Personal or home loan | Car loan |
|---|---|---|
| AED 50,000 | AED 525 | AED 525 |
| AED 100,000 | AED 1,050 | AED 1,050 |
| AED 200,000 | AED 2,100 | AED 2,100 |
| AED 1,000,000 | AED 10,500 | — |
| AED 2,000,000 | AED 10,500 | — |
Official rule: Early or partial settlement of a personal or home loan costs at most 1% of the outstanding balance or AED 10,000, whichever is less, plus VAT. (source, checked 2026-10-19)
Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.
Work out your own fee and saving: early settlement calculator (car, personal and home loans).
Paying off a loan early in the UAE is cheaper than many people think: the Central Bank caps the fee.
The caps
- Home and personal loans: at most 1% of the outstanding balance or AED 10,000, whichever is less — for full or partial settlement.
- Car loans: at most 1% of the outstanding balance.
- Fees are quoted before 5% VAT.
The fixed-rate exception
During a fixed-rate period of a mortgage, the regulations allow the bank to charge its actual cost of breaking the fixed rate instead. Always ask for a written settlement figure before you pay.
Moving to another bank
The same caps apply when another bank buys out your loan. See the personal loan buy-out and remortgage calculators.
Partial payments
After a partial payment you can usually keep the instalment and finish earlier, or keep the end date and pay less each month. The early settlement calculator shows both.
Skipping an instalment is the opposite
Banks may allow up to two deferred instalments a year. Interest keeps running, so the loan costs more — see the exact schedule on the personal loan calculator.
Questions people ask
How much does it cost to pay off a loan early in the UAE?
In the UAE, home and personal loans: at most 1% of the outstanding balance or AED 10,000, whichever is less, for full or partial settlement. Car loans: at most 1% of the outstanding balance. Fees are quoted before 5% VAT.
Can the bank charge more during a fixed-rate period?
In the UAE, during a fixed-rate period of a mortgage the regulations allow the bank to charge its actual cost of breaking the fixed rate instead of the capped fee. Ask for a written settlement figure before you pay.
Does the cap apply if another bank buys out my loan?
Yes — in the UAE, the same caps apply when another bank takes over your loan. The personal loan buy-out and remortgage calculators include the fee.
What happens after a partial payment?
In the UAE, you can usually keep the instalment and finish earlier, or keep the end date and pay less each month. The early settlement calculator shows both.
Is there a fee for paying off a personal loan early?
Yes — in the UAE, but it is capped: at most 1% of the outstanding balance or AED 10,000, whichever is less, plus 5% VAT. The same cap applies to a partial payment and when another bank buys the loan out.
Can I do early settlement for a personal loan?
Yes — you can settle a UAE personal loan in full or in part at any time; the bank may charge at most 1% of the outstanding balance or AED 10,000, whichever is less, plus VAT, and must give you a settlement figure. After a partial payment you can usually choose a lower instalment or a shorter term.