What it means
A fee for paying off a loan before the end of its tenure. In the UAE it is generally capped at 1% of the outstanding balance, up to AED 10,000.
Loans
Early Settlement Fee
A fee for paying off a loan before the end of its tenure. In the UAE it is generally capped at 1% of the outstanding balance, up to AED 10,000.
CategoryLoans
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What “Early Settlement Fee” really means
The meaning, how it works in the UAE, and why it matters to your money.
How it works in the UAE
If you repay a loan before the end of its tenure, the bank can charge a fee. In the UAE this is generally capped at 1% of the outstanding balance, up to AED 10,000.
Why it matters
It matters when you plan a loan buyout or want to clear debt early with a bonus.
PRO TIPAsk for a settlement letter showing the exact amount before you pay.
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Read more about Early Settlement Fee
Guides that use this term — and a tool to put it into practice.
Loans
TRY THE TOOLPersonal loans in the UAE: what to compare before you sign
A low monthly instalment does not automatically mean a cheaper personal loan. Compare the total cost, tenure, fees and repayment terms before signing.
Loan buyout estimator
Run your own numbers and see how Early Settlement Fee affects you.