Early settlement calculator (Bahrain)
Updated
CBB caps the early-settlement fee at the lower of 1% of the outstanding amount or BHD 100 on a personal or car loan, and the lower of 0.75% or BHD 200 on a home loan — for full and part settlement, at conventional and Islamic banks alike, for existing loans as well as new ones. That is the most a bank may charge — your bank may charge less — and 10% VAT is added on the fee. Example: BHD 5,000 left on a personal loan over 36 months at 6% (an example rate — CBB sets no maximum rate, so use the one in your offer), an instalment of BHD 152.110. The fee is at most 1% (BHD 50.000 + BHD 5.000 VAT = BHD 55.000), so you settle with at most BHD 5,055.000 and no longer pay BHD 420.949 in interest. At an Islamic bank one month's profit (BHD 25.000) is added: at most BHD 5,080.000. A home loan of BHD 60,000 hits the BHD 200 cap (0.75% would be BHD 450.000): BHD 200.000 + BHD 20.000 VAT = BHD 220.000 at most.
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.
Instalments on this page follow the standard monthly formula on the reducing balance. Your bank counts interest or profit day by day between the actual payment dates and rounds each amount, so its own schedule can differ slightly. Only your signed offer is binding.
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.
CBB's rules on paying off early
- Personal and car loans: Paying off a consumer loan early, fully or partly: at most 1% of the outstanding amount or BHD 100, whichever is lower (plus 10% VAT on the fee). The cap is 1% of the outstanding amount up to an outstanding BHD 10,000; above that it is BHD 100 — on BHD 20,000 outstanding at most BHD 100.000 + BHD 10.000 VAT = BHD 110.000. Your bank may charge less.
- Home loans: Paying off a home loan (residential mortgage) early, fully or partly: at most 0.75% of the outstanding loan or BHD 200, whichever is lower (plus 10% VAT on the fee).
- VAT: Bank fees carry 10% VAT — arrangement and processing fees and other bank charges such as early-termination (early-settlement) and late-payment fees; the interest (or Islamic profit) itself is VAT-exempt.
- Old loans too: The early-settlement caps cover existing loans as well as new ones.
- Islamic banks (and financing companies on Sharia-compliant financing): Islamic banks, and CBB-licensed financing companies on Sharia-compliant financing: on early repayment the profit is limited to one month's profit — that of the month in which you repay (since 1 October 2011).
- Conventional banks: on a reducing-balance loan, settling on an instalment date means paying the outstanding balance plus the fee and its VAT (this calculator counts it that way); interest for the rest of the term falls away. The bank must tell you the payoff amount and how it is calculated.
- Postponing instead: Postponing an instalment: free when the bank offers it, at most BHD 10 when you ask.
Finish earlier or pay less?
After a part payment you can keep the instalment and finish earlier (more interest saved) or keep the end date with a lower instalment (more room each month under the 50% limit). The calculator shows both; ask your bank which it offers. CBB's cap for a part payment is the same as for full settlement — the lower of the percentage of the outstanding amount or the BHD cap — and the calculator takes it, with its 10% VAT, out of your part payment. Example: paying BHD 1,000 on the BHD 5,000 personal loan above, at most BHD 55.000 goes to the fee and VAT and BHD 945.000 off the balance. Your bank may charge less.
The monthly cost of a new loan: personal loan calculator.
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.
What carries VAT in Bahrain and what is exempt: VAT in Bahrain — with a calculator to add or remove 10% VAT.
Questions people ask
What does paying off a personal loan early cost in Bahrain?
In Bahrain, at most 1% of the outstanding amount or BHD 100, whichever is lower, plus 10% VAT on the fee — the same for car loans and for a part payment, at conventional and Islamic banks. Your bank may charge less.
And a home loan?
In Bahrain, at most 0.75% of the outstanding loan or BHD 200, whichever is lower, plus 10% VAT on the fee. Your bank may charge less.
Do the caps apply to a loan I took years ago?
Yes — CBB applied the early-settlement caps to existing loans as well as new ones.
What is different at an Islamic bank?
The same fee caps apply, and the profit is limited to one month's profit — that of the month in which you repay. CBB-licensed financing companies follow the same one-month rule on Sharia-compliant financing.
Can I postpone an instalment instead?
In Bahrain, postponing is free when the bank offers it, and costs at most BHD 10 when you ask for it.