How to check a loan offer in the UAE: the real rate
Updated
How do I check my loan offer?
Take three numbers from the offer — the amount, the months and the monthly instalment — and work out the yearly rate they really mean, then add the fees: AED 100,000 at 3.99% flat over 48 months is AED 2,415.83 a month, which is 7.46% a year on the reducing balance, and 8.00% once an AED 1,050 fee is counted. Before you sign, the lender must give you a Key Facts Statement and the APR, and the written offer must show the total you will repay; after signing you still have 5 business days to change your mind.
| Check | What it shows | When |
|---|---|---|
| Key Facts Statement | First document you get; you sign that you received it | before signing |
| APR | Expected yearly rate with interest and all fees | before signing |
| Total to repay | All instalments to the end, and the total interest separately | in the written offer |
| How interest is worked out | With an example, on the reducing balance | before signing |
| Every fee | Amount, how it is calculated, one-time or recurring | when you sign |
| Repayment schedule | Complete, with the rate and whether it is fixed | when you sign |
| Cooling-off | 5 complete business days | after signing |
Official rule: Before you sign, the lender must give you a Key Facts Statement as the first document, and you sign to confirm you received it. (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.
How to check a loan offer in five steps
- Find the instalment. It is the number you will really pay. If the offer shows only a rate, ask whether it is flat or reducing.
- Work out the real rate. Amount, months and instalment fix the rate on the reducing balance. A flat rate is roughly half of it — 3.99% flat over 48 months is 7.46% reducing.
- Add the fees. Every fee you pay to get the loan makes the yearly rate higher, because you receive less than the amount you repay interest on.
- Compare with the APR on the Key Facts Statement. The Central Bank says the APR includes interest and all fees compounded over a year, but publishes no formula — so a lender's APR can differ slightly from ours. A difference of more than a few tenths of a point (this site's own threshold: 0.25) is worth a question.
- Check the total to repay. The written offer must state the total of all instalments and the total interest. Multiply the instalment by the months: the two must agree.
When the instalment fits neither rate
If the instalment is higher than the quoted rate gives on either basis, something else is in it — insurance, a fee spread over the months, or a different rate. Example: AED 200,000 over 48 months quoted at 4.25% with an instalment of AED 5,100 is 10.29% a year on the reducing balance, 10.82% with an AED 2,000 fee. Ask the lender to explain the difference in writing.
Fees: what is capped and what is not
The Central Bank caps early settlement of a personal loan at 1% of the balance, at most AED 10,000, and a few other fees. Its current fee table sets no maximum processing fee for personal or car loans, so compare that fee between offers. More in early settlement fees.
Questions people ask
How can I check my loan eligibility in the UAE?
The Central Bank of the UAE caps a personal loan at 20 times your monthly salary and 48 months, and all your instalments together at 50% of your gross salary and regular income. Before lending, the bank must check your creditworthiness with the credit bureau. Minimum salary and age limits are each bank's own policy, not Central Bank rules. The how-much-can-I-borrow calculator works out your maximum.
How much loan can I get on 5000 AED salary?
In the UAE, at most AED 100,000 as a personal loan: 20 times your monthly salary. Your instalments for all loans and cards together may not exceed 50% of AED 5,000, AED 2,500 a month — AED 100,000 at 6% over 48 months is AED 2,348.50, so it fits only if you have no other loan or card. Many banks also set a minimum salary of their own.
Is there a cap on loan processing fees in the UAE?
No — in the UAE, the Central Bank's current fee table (2019) sets no maximum processing fee for personal or car loans; the 1% / AED 2,500 cap many sites still quote belonged to the 2011 table it replaced. Every fee must be disclosed with its amount and how it is calculated.
Can I cancel a loan after signing in the UAE?
Yes — in the UAE, within the cooling-off period of 5 complete business days after signing. If you do not go ahead, the lender refunds the related fees minus reasonable direct costs it disclosed to you in writing in advance. You can waive the cooling-off period in writing.
Why is my APR different from the calculator's?
The Central Bank of the UAE says the APR includes the interest and all fees compounded over a year on the reducing balance, but it publishes no formula. Lenders can count fees or days differently, so a small difference is normal; a large one is worth asking about.