![]() Under reducing balance interest rate, the interest is charged on the reduced principal outstanding each month after you pay the monthly installment. I thought, when bankers themselves did not know what this was, I was not surprised about lay men! What is a Reducing Balance Interest Rate? Most of them did not know what Reducing Balance or a Flat rate of interest was. Well, my queries did not stop at that point! I asked them another question….”Is the interest rate quoted, Reducing Balance or Flat interest rate ?” I saw blank faces! 60% of them did not exactly know what the interest rate was!! I went on to ask a further question: “What is the interest rate / profit rate?” ![]() ![]() I also came to know a startling fact from these same friends!!Īround 95% of them had a bank loan tied to their cars!! Meaning, they did not actually own the car by paying cash upfront but had purchased a loan against the cars. Many of them prefer the tried and tested brands such as Toyota, Nissan, Honda and they are right! These are the companies that produce good quality vehicles. I asked few of them as to how much did it cost? And I found out that an average family saloon car in Dubai can cost anything between 30000 Dirhams to 120000 Dirhams! That’s a lot of money. Buying car is an exciting moment for the whole family. Literally everyone I know has a car in Dubai ! Many of them bought the cars for the sake of convenience. Hope this Car loan installment helps you in making better decisions.Ĭar Loan Installment Calculator – Excel (download). ![]() Precautions you must take before making a decision for a Car Loan.How to calculate your Car Loan installment?.Banks in UAE – How do they treat Interest Rate on Car Loans?.What is a Reducing Balance Interest Rate?.Car Loan Installment Calculator – Excel (download). ![]()
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