Personal Loan Interest Rates in UAE

Which Bank Offers the Lowest Interest Rate on a Personal Loan in the UAE?

Compare the personal loan interest rate from the top banks in the UAE - 

Top Banks	Interest Rate/Profit Rate for UAE Nationals (p.a.)*	Interest Rate/Profit Rate for Expats (p.a.)*	Maximum Loan Amount
First Abu Dhabi Bank (FAB)	4.70% (fixed rate)	5.44% (fixed rate)	Nationals - AED 5 million Expats - AED 2 million
Emirates NBD	Fixed interest rate - Ranging from 4.99% to 19.99% (on the reducing balance) per annum Variable interest rate - From 5.24% to 19.99%	Fixed interest rate - Ranging from 4.99% to 19.99% (on the reducing balance) per annum Variable interest rate - From 5.24% to 19.99%	Nationals - AED 4 million Expats - AED 3 million
Abu Dhabi Commercial Bank (ADCB)	5.24%	6.49%	Nationals - AED 4 million Expats - AED 1.5 million
RAKBANK	4.39% reducing rate	5.49% reducing rate	N/A
Commercial Bank of Dubai (CBD)	From 5.50% to 18% (reducing rate)	From 5.50% to 18% (reducing rate)	Nationals - AED 2.5 million Expats - AED 750,000
Emirates Islamic Bank	2.49% flat (valid till 31st January 2026)	2.99% flat (valid till 31st January 2026)	Nationals - AED 4 million Expats - AED 3 million
Abu Dhabi Islamic Bank (ADIB)	4.59% (reducing profit rate)	4.59% (reducing profit rate)	Nationals - AED 3 million Expats - AED 2 million
Dubai Islamic Bank (DIB)	From 5.99% to 21.99% (reducing profit rate)	From 5.99% to 21.99% (reducing profit rate)	Nationals - AED 5 million Expats - AED 3 million

*The interest rates are for reference only and may change over time based on the bank’s policy, your profile, and other factors. Always verify the latest rates before applying.

What is the Personal Loan Interest Rate in UAE?

The personal loan interest rate is the rate at which the bank charges you for borrowing money. It’s expressed as a percentage of the loan amount. For Islamic financing, it’s usually charged as ‘profit’.

When repaying the loan, you pay this cost along with the principal amount over the tenure.

Factors Affecting the Personal Loan Interest Rate in UAE

Getting the lowest interest rate personal loan is not just about choosing the top lender in the UAE. It depends upon your financial profile, as banks look at various factors while setting a personal loan interest rate for you -

Credit Score

A good credit Score means easier approvals and lower rates. This is because borrowers with higher credit scores are considered lower risk, as they are less likely to default on repayments. For the best rates and swift approvals, it’s good to have a score of 700 or more. On the whole, you generally need a score of 650 or more to apply.

Monthly Income

If you’ve a high salary, it shows lenders and banks that you are capable of repaying the borrowed amount. This, in turn, can bring you a low-cost personal loan in the UAE.

Earlier, banks asked for a monthly salary of AED 5,000 or more for personal finance. However, this has changed in the latest update, which you can read below.

🔔 UAE Scraps Minimum Salary Requirement for Personal Loans

Debt-to-Income Ratio

The debt-to-income (DTI) ratio or debt-burden ratio (DBR) indicates how much of your income you’re using to repay existing debts. If you already have high liabilities (loans or credit cards), lenders may charge a higher interest rate or even limit loan approval. 

In the UAE, your DBR should not be more than 50%. For pensioners, the maximum limit is set at 30%. 

Employment History

A stable employment history improves your chances of personal loan approval in the UAE. It also helps you secure lower interest rates, especially if your employer is approved by the bank.

Nationality and Residency

Personal loan interest rates in UAE may vary slightly between UAE nationals and expatriates. Usually, the rates are lower for nationals. However, expats can still find loans at competitive rates.

Types of Personal Loan Interest Rates in UAE

While applying for a personal loan in UAE, it’s crucial to look at the type of interest rate as it also determines your monthly repayment. In the UAE, personal loan interest rates are categorised into two types: fixed and reducing rates. Here is a quick overview of both options:

Flat Interest Rate

A flat interest rate is calculated on the entire loan amount for the full tenure, regardless of how much principal you have already repaid.

Pros of Flat Rates	Cons of Flat Rates
Rates are generally low Easy to understand and calculate Monthly instalments remain predictable	Often appears lower but results in a higher overall repayment Expensive option for long term

Let’s understand how your instalment will look on the basis of a fixed interest rate personal loan in UAE.

For example, you get a loan of AED 100,000 with a fixed interest rate of 5% per annum for 4 years. Here’s how the instalment will be calculated -

Total Interest Charged
100,000 × 5% × 4 = AED 20,000

Total Repayment Amount
100,000 + 20,000 = AED 120,000

Monthly EMI
120,000 ÷ 48 (4 years) = AED 2,500

Reducing Interest Rate

With a reducing balance interest rate, the bank charges interest on the outstanding loan balance. As the outstanding amount reduces after every EMI payment, so does the interest.

Pros of Reducing Rates	Cons of Reducing Rates
More cost-efficient over the long run Ideal if you wish to settle the loan before completion Total interest paid is lower compared to flat rates (at the same rate)	Complex calculation Initially higher EMIs Usually higher rates than flat rates

Let’s understand how your repayments will look if you choose a reducing-rate personal loan. Assume you borrow an amount of AED 100,000 with a reducing interest rate of 9% per annum for 4 years.

In this case, the instalment will be around AED 2488. It’s lower than a flat rate loan of similar repayment tenure.

Click here to calculate the instalment with this personal loan calculator in UAE!

How to Get the Lowest Interest Rate Personal Loan in the UAE?

Now that you know which factors affect your personal loan interest rate in UAE, let’s understand the most effective ways to improve the chances of your low-cost personal loan approval:

• By repaying your bills and existing instalments on time, you can maintain a good AECB score. This shows you as a reliable borrower, which improves your chance of getting the lowest interest rate personal loan. { Aim for a score of 750 or more}
• Maintain job stability and check whether your employer is listed with the bank. Working with an employer that’s on the bank’s list of recognised companies often makes you eligible for loans at lower rates.
• You can use tools and reliable sites to compare personal loan interest rates of several banks. Choose Paisabazaar.ae, a trusted platform that lets you compare different banks offering loans along with their key details. 
• Avoid applying for multiple loans in a short period. This can lead to multiple hard inquiries, which can immediately bring down your credit score. 
• If the lending bank offers a salary transfer facility, go for it. This can often get you the lowest interest rate personal loan.

How Does the Personal Loan Tenure Affect Interest Rate?

Personal loan repayment period impacts not only the rate but also the total interest. 
In the UAE, the personal loan repayment tenure cannot go beyond 48 months (4 years). However, for a lower total interest, it’s advisable to go for a shorter tenure — ideally around 1-2 years.

If you’re wondering how this works in real terms, let’s understand it with a simple example.

Assume you take a personal loan of AED 500,000 at an interest rate of 8% (reducing rate) per annum. Here is a comparison of how different tenures affect your instalment and the total interest payable.

Loan Tenure (in years)	Interest Rate (p.a.)	Monthly Repayment**	Total Interest**	Total Payable**
1 year	8%	AED 43,494	AED 21,930	AED 521,930
2 years	8%	AED 22, 613	AED 42,727	AED 542,727
3 years	8%	AED 15,668	AED 64,054	AED 564,054
4 years	8%	AED 12,206	AED 85,910	AED 585,910

Important

• A longer loan period increases the total interest and the overall amount payable, even though the monthly instalment is lower. 
• The 4-year loan’s total interest is more than 2x the interest of the 2-year option.
• For low-cost borrowing, choose a shorter tenure. It reduces interest outflow and helps you close the loan faster.

However, if you have a limited or fluctuating monthly income, a longer tenure can make EMIs more affordable and easier to manage. For individuals with a stable and sufficient income, a short-term loan is ideal to minimise interest costs.

Keep in mind that choosing a very short tenure without proper income stability may lead to high instalments. This can lead to missed payments, penalties, and credit score damage, which can affect future borrowing options.

How Does Paisabazaar.ae Help You in Your Financing Journey?

Paisabazaar.ae simplifies financing for you by putting clarity, choice, and trust first. We help you compare personal loans from leading UAE banks in one place. With us, you can make confident decisions without pressure.

• Associated with leading banks: You can find top banks and financial institutions under one roof. 
• Financial experts’ guidance: Get the answers to your real queries from our finance experts.  
• Transparent comparison: What you see is exactly what you get - no hidden surprises, just honest, reliable comparisons.
• Personalised finance options: Choose the personal finance options based on your profile - credit score, income, and loan requirements.

How to Improve Your Approval Chances for a Low-Interest Personal Loan in UAE?

Meeting eligibility criteria is the first step for getting a low-interest personal loan in UAE. However, banks also offer additional options that can improve approval chances and help you secure better interest rates. Here are some of the most effective ways -

Salary Transfer

Transferring your salary to the lender bank improves your eligibility for a personal loan with a low interest rate, as it assures stable income and repayment capacity. This option is ideal for salaried employees working with listed or approved companies seeking faster approval and lower rates.

Co-Applicant Program

Adding a co-applicant with a stable income strengthens your overall credit profile and lowers the bank’s lending risk. This helps you qualify for a personal loan at a lower interest rate. This option is ideal for applicants with limited income, existing liabilities, or a short credit history. Many UAE banks, including Emirates NBD and more, offer this facility to simplify the loan approval process and improve eligibility.

Why is it Important to Compare Personal Loan Interest Rates in UAE?

Comparing personal loan interest rates before applying is crucial. It helps you make an informed financial decision and find options that meet your specific requirements. Some of the key reasons to do so are as follows -

• Avoid Paying More Than Necessary: Without comparing multiple loan offers, you might end up selecting a loan with a higher interest rate. This can increase your total interest outgo over the tenure.
• Find the Best EMI Option: Different interest rates directly affect your monthly EMI. By comparing, you can choose a loan that fits your monthly budget comfortably.
• Understand the True Cost (APR): Comparing loans allows you to evaluate the Annual Percentage Rate (APR), which includes interest, fees, and other costs. This gives you a complete cost picture.
• Better Financial Planning: When you clearly understand interest rates, prepayment charges, and foreclosure terms, you can plan your instalments more effectively. This way, you can manage your monthly budget without any burden.
• Choose the Right Lender: Each bank has different terms and conditions. Comparing interest rates ensures you select a lender that matches your financial goals and repayment capacity.

How to Apply for a Low Interest Rate Personal Loan in UAE?

Applying for a personal loan with a low interest rate is easy. You can do this online through Paisabazaar UAE. Here’s how — 

• On Paisabazaar.ae, move to ‘personal loans’
• Fill out the lead form
• Enter your personal and contact details, monthly income, and other details
• Check the top loans from the leading banks
• Find the low-interest options and apply for one!

Paisabazaar.ae lets you compare the best personal loans from multiple UAE banks and apply for the one that best suits your financial needs.

Personal Loan Interest Rate: FAQs