Early settlement calculator (Oman)

CBO's rules on paying off early

• The charge: at most 1% of the amount prepaid — on a part-payment, of the part you pay.
• Pensioners: no early-settlement charge with a net monthly pension up to OMR 1,000 — also when another bank takes the loan over.
• Top-up, consolidation, restructuring: no early-settlement charge for anyone.
• Top-up: A personal-loan top-up only after 24 months of good payment, once 50% is repaid, or when the full eligibility was not used when the loan was first given.
• Another bank: may take over a personal loan; the loan keeps its category (housing stays housing).
• Reducing balance: interest is charged on the reducing balance, so settling early means paying the outstanding balance plus the charge — future interest is never charged.

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 debt-burden limit). The calculator shows both. CBO's circular sets no rule on how part-payments are made, so check with your bank. Islamic finance follows the same circular; the charge works the same way.

Your monthly cost of a new loan: personal loan calculator. A loan from a finance and leasing company follows other CBO rules — see below.

Finance and leasing companies

Finance and leasing companies are licensed by CBO but are not banks: CBO's Master Circular on Personal Loans/Finance for banks (BM 1213) does not apply to them. Their own CBO circulars — FM 41 (2023) on what they may do and FM 31 (2013) on charges — say:

• Personal loans: without collateral and for a non-business purpose only. All debt payments at most 50% of net monthly salary under OMR 1,000 a month, and at most 60% from OMR 1,000, or when you also repay a housing loan. Net salary is what reaches your bank account each month.
• Term: at most 7 years (banks: 10), plus up to 2 monthly deferments a year at your request; the company must consider your age so that the loan ends reasonably ahead of retirement.
• Top-up: Finance and leasing companies: a personal-loan top-up only after 12 months of satisfactory payment, after 50% of the loan is repaid, or when the first loan did not use the customer's full eligibility.
• Interest rate: CBO does not cap the interest rates of finance and leasing companies, unlike banks; in 2013 it found rates as high as 24% a year and told the companies to review them and be moderate. Compare offers on the real yearly rate.
• Charges: paying off early at most 1% of the amount prepaid; rescheduling at most OMR 10 for an individual; duplicates at most OMR 5; basic certificates (no-due, release letter, balance confirmation) only a nominal amount; late (penal) interest at most 2% over the loan or lease rate (CBO's wording: "shall not exceed 2 % of the same").
• Up front: all terms and charges, including the effective rate, must be disclosed in full before you sign, and changes notified well ahead.

A loan from a finance and leasing company still counts in a bank's debt-burden check. The older master circular for these companies (FM 19, 2006) is not on CBO's website, so a rule in it that FM 41 did not change could still apply — ask the company to show its terms in writing.