UAE · Planning tools

Flat vs Reducing Loan Rate Calculator

Compare loan offers that quote interest in different ways. Enter the payment and fee details to see monthly instalments, total finance cost and an effective-rate illustration.

Your details

Your scenario

Equal-month illustration or actual/365 dated payments. Flat interest is charged on financed principal; reducing payment amortises the balance including the declared final balloon. Fees are separated as financed, deducted, separately paid or recurring. Bisection solves effective annual cash-flow cost; this is not a regulated APR. Compare equal net cash received; differing net proceeds are flagged.

Loan quotes (same requested principal and term)
Optional actual instalment dates (dated mode only, one per month)

Entries stay in this browser. Examples use illustrative confirmations; replace them with your own checked details.

How to use this tool

  1. Choose the quote type and enter principal and term.
  2. Add fees and any final payment.
  3. Compare equal cash received and repayment periods.

How the result is calculated

Flat interest is calculated on the original principal for the whole stated period. Reducing-balance interest follows the outstanding balance. A cash-flow calculation makes the difference visible.

Worked example

AED12,000 at 5% flat interest for one year creates AED600 interest. With twelve equal payments and no other fees, that is AED1,050 per month.

What this result does not cover

The effective-cost illustration is not automatically the lender's regulated APR. Dates, day-count conventions, insurance and fees can change the result.

Questions people ask

Can I double a flat rate to get the reducing rate?

That shortcut is not exact; calculate from the payment cash flows.

Why do deducted fees matter?

You receive less cash while still making the repayments.

Does a lower instalment mean a cheaper loan?

No. A longer term or balloon can increase total cost.

Supported scope and official sources

Equal-month illustration or actual/365 dated payments. Flat interest is charged on financed principal; reducing payment amortises the balance including the declared final balloon. Fees are separated as financed, deducted, separately paid or recurring. Bisection solves effective annual cash-flow cost; this is not a regulated APR. Compare equal net cash received; differing net proceeds are flagged.

Calculation version: ae-2026-10-22. Source retrieval: 22 October 2026. Independent reviewer: not yet assigned. Independent specialist review is pending. Calculations do not confirm eligibility or replace official decisions.

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