Personal loan buy-out: is moving your loan worth it? (UAE)
Updated
Can I consolidate credit card debt into one loan?
Yes, a bank may lend you money to pay off your cards and other loans, but the new loan has to fit the same limits: 20 times salary, 48 months and all instalments within 50% of your income. Before you sign, the bank must give you in writing a comparison of the total interest over the term of your old debts and the new loan, and it may not stretch the term just to squeeze you under the limit. Example: AED 40,000 of card debt moved into a 36-month loan at an example 7% is AED 1,235.08 a month and AED 4,463 of interest in total — check that against what the cards would cost.
Official rule: When a bank offers a loan to consolidate or refinance your existing loans, it must first give you in writing a comparison of the total interest (or profit) over the term of the old loans and the new one. (source, checked 2026-10-19)
Example: AED 120,000 left at 7.5% over 30 months is AED 4,399.16 a month. Moved at 5.49% over the same 30 months it is AED 4,289.91; after the capped settlement fee, liability letter and a 1% processing fee you save about AED 695. Put in your own offer.
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.
What a buy-out costs
- Your bank: at most 1% of what you owe or AED 10,000, whichever is less, plus VAT. You may move your loan to any bank or finance company in the UAE.
- A liability letter for the new bank: at most AED 60 plus VAT.
- The new bank: a processing fee and sometimes insurance. The new loan must meet the same limits: 20 times your salary, 48 months, and all instalments together at most 50% of your salary.
The trap: a lower monthly payment over more months
Stretching what is left over a longer term lowers the monthly payment but can raise the total. The calculator shows both. If the offer is quoted as a flat rate, its real rate is much higher: see flat vs reducing rate.
Questions people ask
How much does my bank charge if I move my loan?
In the UAE, at most 1% of what you owe or AED 10,000, whichever is less, plus VAT, and at most AED 60 plus VAT for a liability letter.
Can I get extra cash when I move?
In the UAE, a top-up is only allowed once the loan has been repaid without default for at least a year, and the new loan must stay within 20 times your salary and 48 months.
What is loan buyout?
In the UAE, another bank pays off your current loan and gives you a new one, usually at a lower rate or with extra cash. Your old bank may charge at most 1% of what you owe or AED 10,000 plus VAT to settle, and at most AED 60 plus VAT for the liability letter.
What are the requirements for a buyout loan in the UAE?
The Central Bank of the UAE sets no special conditions beyond those for any personal loan: the new loan must stay within 20 times your salary, 48 months and the 50% limit, and extra cash (a top-up) is only allowed after a year of repayment without default. Minimum salary, employer lists and salary transfer are each bank's own policy.