What it means
When a new bank pays off your existing loan so you can move to a better rate or combine debts.
Loans
Loan Buyout
When a new bank pays off your existing loan so you can move to a better rate or combine debts.
CategoryLoans
Pro tip inside1 quick win
What “Loan Buyout” really means
The meaning, how it works in the UAE, and why it matters to your money.
How it works in the UAE
In a buyout, a new bank pays off your existing loan or card balances and gives you one new loan, ideally at a lower rate. You'll need a liability letter from your current bank.
Why it matters
It can lower your EMI, combine debts and save interest — but only if the new rate is clearly lower after fees.
PRO TIPInclude the early settlement fee (capped at 1%, up to AED 10,000) in your sums.
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Read more about Loan Buyout
Guides that use this term — and a tool to put it into practice.
