Car loan calculator
Enter the car price, your down payment, the rate and the period to see your monthly instalment and total interest.
How the instalment is calculated
Amount financed = price − down payment
Flat: monthly = financed × (1 + rate × years) ÷ months
Car loans in the Gulf are usually quoted at a flat rate. Interest is charged on the amount financed for the whole term, so a flat rate costs nearly twice the same number on a reducing basis. The calculator shows the equivalent reducing rate when you pick flat.
Worked examples
| Car | Down payment | Rate and term | Monthly |
|---|---|---|---|
| 120,000 | 20,000 | 3% flat, 4 years | 2,333.33 |
| 120,000 | 40,000 | 3% flat, 4 years | 1,866.67 |
| 120,000 | 20,000 | 3% flat, 5 years | 1,916.67 |
Example 1: a standard offer
Ahmed buys a QAR 120,000 car with 20,000 down, financing 100,000 at 3% flat for 4 years. Interest is 100,000 × 3% × 4 = 12,000, so he repays 112,000 over 48 months: QAR 2,333.33 a month.
Example 2: a bigger down payment
If he pays 40,000 down instead, he finances 80,000. Interest falls to 9,600 and the instalment to 1,866.67.
Example 3: a longer term
Back to 20,000 down but over 5 years: interest rises to 15,000, and the instalment drops to 1,916.67. Lower monthly, higher total.
Example 4: a flat offer against a reducing offer
You need to finance 80,000 over 5 years. Dealer A offers 3% flat: 1,533.33 a month and 12,000 interest. Bank B offers 5.5% on a reducing balance: 1,528.09 a month and about 11,686 interest. The bigger-looking number is actually slightly cheaper, because 3% flat over 5 years is about 5.64% reducing.
How the down payment changes the cost
A 100,000 car at 3% flat over 5 years:
| Down payment | Financed | Monthly | Total interest |
|---|---|---|---|
| 10,000 (10%) | 90,000 | 1,725.00 | 13,500 |
| 20,000 (20%) | 80,000 | 1,533.33 | 12,000 |
| 30,000 (30%) | 70,000 | 1,341.67 | 10,500 |
Every 10,000 paid up front saves 1,500 in interest here, and lowers the instalment by about 192 a month.
Flat car loan rates and their true cost
| Flat rate | 4 years | 5 years |
|---|---|---|
| 2.5% | 4.75% | 4.73% |
| 3% | 5.67% | 5.64% |
| 3.5% | 6.58% | 6.54% |
These are the equivalent reducing-balance rates, before fees.
The full monthly cost of a car
The instalment is only part of what a car costs. Add comprehensive insurance (usually required on a financed car), yearly registration renewal, fuel, tolls and parking, and servicing. Until the loan is paid off, the bank's name normally stays on the car's registration, so you need a clearance from the bank before you can sell or transfer it.
Before you sign
- New or used: banks often offer shorter terms or higher rates for used cars, depending on the car's age.
- Final or "balloon" payment: some offers keep the instalment low by leaving a large sum to pay at the end. Ask if there is one.
- Fees: ask for the processing fee and the APR, not only the flat rate.
- Insurance: compare the bank's insurance offer with one you arrange yourself, if the bank allows it.
- Early settlement: ask how the settlement amount is worked out and what fee applies.
How much can you borrow?
Banks cap the share of your salary that can go to repayments: 50% of gross salary in the UAE, and 33.33% for salary-deduction finance in Saudi Arabia, with credit card limits counted too. Use the DBR and maximum loan calculator to see how much room you have and the largest loan that fits.
Common mistakes
- Forgetting insurance and registration. They add to the real monthly cost of the car.
- Comparing flat and reducing rates directly. Use the equivalent rate the calculator shows.
- Choosing the longest term by default. It lowers the instalment but raises total interest.
- Skipping the down payment to keep cash. You pay interest on that amount for the whole term.
- Missing a final balloon payment. A low instalment can hide a large sum due at the end.
Frequently asked questions
How is a car loan instalment calculated in the Gulf?
Most banks use a flat rate: interest = amount financed × rate × years. Add it to the amount financed and divide by the number of months.
How much down payment do I need?
Banks and regulators in each country set minimum down payments, often around 20% for new cars. Check the current rule with your bank.
Does a bigger down payment save money?
Yes. Interest is charged on the amount financed, so every riyal or dirham you pay up front saves interest on it for the whole term.
Is insurance included?
No. Comprehensive insurance is usually required for a financed car and is paid separately or added to the loan. Ask your bank.
Does this work for Islamic car finance?
Yes for the instalment. Islamic car finance (usually murabaha or ijara) quotes a flat profit rate, and the instalment is calculated the same way.
Can I sell a car that is still financed?
Yes, but the loan must usually be settled first, or the buyer and bank must agree to take it over. The bank then issues a clearance so the registration can be transferred.
Can I get a loan for a used car?
Many banks finance used cars, often with a shorter maximum term or a higher rate depending on the car's age. The instalment is calculated the same way.
Results are estimates and exclude fees and insurance. Your bank's offer can differ. This is not financial advice.
Method: flat-rate method used by many Gulf banks, and the standard amortisation formula for reducing-balance loans.