Your car loan
Note: Educational estimate for planning. Confirm final amounts on official channels.
What this calculator does
It converts between the two ways a car loan rate can be quoted, which is the single most useful thing a UAE car loan calculator can do.
Enter the advertised flat rate and it shows the instalment and the equivalent reducing-balance rate — the number you would need to compare that offer against a mortgage, a personal loan or a different bank quoting reducing. It also checks the three regulatory limits: the 80% financing cap, the 60-month maximum term, and the rule that repayments should not exceed half your salary.
Flat rate is the whole trick
A flat rate charges interest on the original loan amount for every month of the term. Borrow AED 96,000 at 2.99% flat over five years and you pay 2.99% of AED 96,000 every year for five years — AED 14,352 of interest — even though by the final year you owe almost nothing.
A reducing-balance rate charges interest only on what is still outstanding, which falls every month. For the same total interest, the reducing rate works out at roughly 1.8 times the flat rate. So 2.99% flat is in the region of 5.4% reducing, and that is the figure to put next to any other borrowing you are considering.
Nothing about this is hidden or improper — flat quoting is standard across the region. It is only misleading if you compare a flat rate against a reducing one without converting, which is exactly what the advertising invites.
The three rules a UAE car loan has to obey
80% of value. The UAE government’s own guidance and the Central Bank’s consumer lending regulation both state that a car loan is treated separately from a personal loan and must not exceed 80% of the financed vehicle’s value. That is where the 20% deposit comes from — it is a consequence of the cap, not a separate rule.
60 months. The maximum repayment period is 60 months. A longer term on a car is not a standard UAE car loan.
Half your salary. Repayments should not exceed half the borrower’s salary, and the broader Central Bank position caps total monthly debt at 50% of income. Both are checked here against your income and existing debts.
What "zero down payment" actually means
The 80% cap does not go away because a showroom advertises 0% down. The remaining 20% still has to be accounted for, and it is usually folded in somewhere else — an inflated list price, bundled insurance, a service package, or add-ons priced to cover it.
If an offer appears to beat the cap, the right question is not whether it is allowed but where the 20% went. Lenders may also apply stricter limits than the regulatory maximum, particularly for used cars, the self-employed, and applicants without salary transfer.
Worked examples
AED 96,000 financed. Interest AED 14,352 over the term, instalment about AED 1,839 a month, equivalent reducing rate roughly 5.5%.
Instalment about AED 1,724 and interest about AED 7,440 — roughly half. Same headline number, a very different loan.
The 50% ceiling leaves AED 3,500 for the car. A AED 1,839 instalment passes; a larger car would not.
How to use this calculator
- Enter the vehicle price and your down payment — at least 20%, because financing is capped at 80% of value.
- Enter the rate the bank quoted and say whether it is flat or reducing. If the advert does not say, assume flat and ask.
- Set the term, up to the 60-month maximum.
- Enter your monthly income and any existing debt repayments.
- Read the equivalent rate in the other convention — that is the figure to compare other offers against.
- Check the three compliance lines: 80% of value, 60 months, half your salary.
- Confirm the final instalment and any fees with the bank before signing.
Frequently asked questions
What is the difference between a flat rate and a reducing rate?
A flat rate charges interest on the original loan amount for the entire term. A reducing-balance rate charges interest only on what you still owe, which falls each month. For the same total interest, a reducing rate is roughly 1.8 times the flat rate, so 2.99% flat is in the region of 5.4% reducing.
How much can I finance on a car in the UAE?
Up to 80% of the vehicle’s value. The UAE government portal and the Central Bank’s consumer lending regulation both state that a car loan is treated separately from a personal loan and must not exceed 80% of the financed vehicle’s value, which makes 20% the effective minimum deposit.
What is the maximum car loan term in the UAE?
Sixty months. Both the UAE government portal and the Central Bank regulation give 60 months as the maximum repayment period for a car loan.
Can my car loan instalment exceed half my salary?
It should not. The UAE government portal describes car loan repayments as limited to no more than half the borrower’s salary, and the Central Bank caps total monthly debt repayments at 50% of income. Individual lenders may be stricter.
Are zero down payment car offers real?
The 80% financing cap still applies, so the 20% is being covered somewhere else — commonly through the list price, bundled insurance or a service package. Ask where it went rather than assuming the cap was waived.
Is a car loan or a personal loan cheaper for buying a car?
They are regulated differently and quoted differently, so convert both to reducing-balance rates before comparing. A car loan is secured on the vehicle and capped at 80% over 60 months; a personal loan is unsecured, usually carries a higher rate, and has different limits. Compare the total interest, not the headline rate.
Does this include registration, insurance and fees?
Insurance is shown as a separate annual running cost because it is not usually part of the loan. Registration, processing and early settlement fees vary by lender and emirate and are not modelled — ask for them in writing.
Do you store my numbers?
No. Calculations run in your browser and nothing is sent to a server. See our Privacy Policy for analytics and AdSense cookie details.
Where these figures come from
Three rules are applied here, and all three come from official sources. The 80% financing cap and the 60-month maximum term are stated both on the UAE government portal and in the Central Bank’s amendments to the Regulations Regarding Bank Loans and Other Services Offered to Individual Customers (No. 29/2011), which states that a car loan is treated as separate from a personal consumer loan and should not exceed 80% of the value of the financed vehicle, with a maximum repayment period of 60 months. The half-salary limit on repayments is described on the same government portal.
The flat-to-reducing conversion is not a published rate — it is solved numerically from your own figures, by finding the reducing-balance rate whose instalments match the flat-rate instalment. The familiar "about 1.8 times" is a consequence of that arithmetic at typical terms, not an assumption fed into it.
Last checked against the source: 30 October 2026. Individual lenders may apply stricter limits than the regulatory maximums. Not affiliated with the Central Bank of the UAE or any lender.
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Disclaimer
Disclaimer: Educational estimate. The 80% financing cap, 60-month term limit and half-salary repayment rule are taken from the UAE government portal and the Central Bank’s consumer lending regulation; individual lenders may be stricter. Rates, fees and early settlement charges vary — get them in writing. Not financial advice. Not affiliated with any lender.