RealLoanRate

Country: Bahrain · Change country

Loan calculator Bahrain › Loan limits in Bahrain: CBB's 50% rule

Estimate only — not financial advice. Only your lender's offer is binding.

Loan limits in Bahrain: CBB's 50% rule

Updated

The Central Bank of Bahrain (CBB) caps how much of your income all your consumer loans may take, and for how long they may run. The rule is in chapter CM-5 of its Rulebook and is the same for conventional and Islamic banks.

All your monthly repayments on consumer finance — personal loans, car loans, credit cards, overdrafts — may take at most 50% of your monthly gross income. Each credit card counts at 5% of its limit. A consumer loan runs at most 7 years. Above BHD 3,000 a month the bank may relax the 50% after its own review. A home loan secured on the home you live in is outside the 50%.

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.

The rule, point by point

  • 50% of gross income: All monthly repayments on consumer finance together at most 50% of monthly gross income (CBB CM-5.4.1, conventional and Islamic banks alike). Gross means before deductions.
  • Regular income only: Only regular income counts; a spouse's income counts only when the facility is in joint names.
  • Credit cards: Credit cards count in the 50% check at 5% of their credit limits. The share counts whether you use the card or not — a card limit you never touch still takes room.
  • Above BHD 3,000 a month: For people earning more than BHD 3,000 a month the 50% limit may be relaxed after the bank's review — a higher figure is not a right.
  • The same for everyone: CBB's rule makes no difference between Bahrainis and expatriates, or between salaried and retired borrowers.
  • A limit, not a target: The bank must still review your finances in detail and may keep repayments well below 50%; housing costs get particular attention, and what is left must support you and your dependants.
  • 7 years: Instalment consumer finance (personal and car loans) runs at most 7 years, restructuring included; the term may be extended at most twice.
  • If your income falls: if your gross income falls through no fault of your own (redundancy, disability), the bank must record the loan as no longer meeting the limit — it is not your fault — and may extend the term if you ask.

Your home loan is outside the 50%

A loan secured by a first charge on the home you live in (or will live in) is not "consumer finance": its instalment is outside the 50% consumer-finance limit. CBB sets no separate percentage for home loans, but the bank's own review still looks at your housing costs. What CBB does and does not set for home loans: Bahrain home finance rules.

Worked example: gross income BHD 1,500

A gross monthly income of BHD 1,500, a car loan of BHD 150 a month, one credit card with a BHD 2,000 limit, and a new personal loan over the longest term, 7 years, at 6% (6% is an example rate — CBB sets no maximum rate; all figures are our assumptions):

  • 50% of BHD 1,500 = BHD 750.000 a month for all consumer repayments.
  • The car loan takes BHD 150.000; the card counts at 5% of BHD 2,000 = BHD 100.000.
  • Room left for the new loan: BHD 500.000 a month, which carries a loan of about BHD 34,227.
  • Without the card, the room would be BHD 600.000 and the loan about BHD 41,072 — the unused card limit costs BHD 6,845 of borrowing.

Your own numbers: how much can I borrow? · personal loan calculator · car loan calculator · credit card: the minimum payment trap. What a bank may charge on top of the interest: loan fees CBB allows.

CBB's limits come from its Rulebook (Volume 1 for conventional banks, Volume 2 for Islamic banks, chapter CM-5 Consumer Finance, June 2022, and the fee caps in Appendix BC-7 / BC-8). Your bank's offer and its own credit review are what count.

Financing companies

Besides banks, CBB licenses financing companies. CBB-licensed financing companies follow Volume 5 of the Rulebook. Their fee table (Appendix BC-2, from 1 May 2018) caps early or part settlement like the banks' — the lower of 1% or BHD 100 on a consumer loan, of 0.75% or BHD 200 on a home loan — and an instalment postponement you ask for at BHD 10, but it sets no cap on processing fees: ask the company for its fees in writing. On Sharia-compliant financing they follow the same rule as Islamic banks: on early repayment the profit is limited to one month's profit. A loan from a financing company still counts in a bank's 50% check.

Questions people ask

How much of my salary can go to loan repayments in Bahrain?

In Bahrain, all monthly repayments on consumer finance — personal loans, car loans, credit cards and overdrafts — may take at most 50% of your monthly gross income, before deductions. Only regular income counts.

How do credit cards count in the 50% limit?

Each card counts at 5% of its credit limit, whether you use it or not, in Bahrain. A BHD 2,000 limit takes BHD 100 a month of your room.

Does my home loan count in the 50%?

No — in Bahrain, a loan secured by a first charge on the home you live in, or will live in, is not consumer finance, so its instalment is outside the 50% limit. The bank still looks at housing costs in its own review.

Are the limits different for expatriates or retirees?

CBB's rule makes no difference between Bahrainis and expatriates, or between salaried and retired borrowers.

Can a bank lend more than 50% of income?

In Bahrain, for people earning more than BHD 3,000 a month the bank may relax the 50% after its own review; a higher figure is not a right.

How long can a personal or car loan run in Bahrain?

In Bahrain, at most 7 years, restructuring included; the term may be extended at most twice.