Flat rate or reducing rate?
A "4% flat" loan is not a 4% loan. Enter a loan and see both kinds of rate side by side: the monthly payment, the total interest and the true rate.
Why the flat rate looks cheaper
With a flat rate, every month you pay interest on the whole original loan. Halfway through, you owe half, but the interest stays the same.
Over a few years, the true (reducing) rate of a flat loan is close to double the flat number. Always compare loans on the reducing rate.
UAE Central Bank rules say a bank that advertises a flat rate must show the equivalent reducing (effective) rate next to it. If you only see a flat rate, ask for it.
Under UAE Central Bank rules, all your monthly loan and card repayments together must not exceed 50% of your gross salary and regular income. Personal loans have a maximum term of 48 months.
This calculator leaves out fees, insurance and early settlement charges, which add to the real cost. It is not financial advice.
Sources: Central Bank of the UAE, Regulations Regarding Bank Loans and Other Services Offered to Individual Customers (2011), Article 6 (interest on a reducing balance; any bank advertising a "flat" rate must state the equivalent effective rate side by side), Article 7 (repayments not above 50% of gross salary and other regular income; personal loans up to 48 months), as published in the CBUAE Rulebook (rulebook.centralbank.ae); CBUAE Consumer Protection Standards on disclosing how payments are split under the reducing balance method. Formulas: flat interest = amount × rate × years; reducing payment = standard amortisation formula with monthly rate = yearly rate ÷ 12; the equivalent reducing rate is found numerically. Not financial advice.