How to use the loan calculator
- Choose how the rate is quoted: Flat rate or Reducing balance (APR). Personal and car finance offers in Saudi Arabia often quote a flat profit rate.
- Enter the loan amount, the annual rate and the term in years or months.
- The monthly installment, the total profit and the total you repay appear straight away.
For flat-rate loans, the calculator also shows the equivalent APR, the figure to use when you compare offers from different banks.
Flat rate and reducing balance
Flat rate:
- Profit = loan amount × rate × years
- Monthly installment = (loan amount + profit) ÷ number of months
Reducing balance (APR):
- Monthly installment = P × r ÷ (1 − (1 + r)^−n)
- P is the loan amount, r is the annual rate ÷ 12, and n is the number of months
Examples
| Loan | Rate | Term | Monthly installment | Total profit | APR |
|---|---|---|---|---|---|
| 100,000 | 4% flat | 5 years | 2,000.00 | 20,000.00 | 7.42% |
| 100,000 | 4% reducing | 5 years | 1,841.65 | 10,499.13 | 4% |
| 50,000 | 3.5% flat | 3 years | 1,534.72 | 5,250.00 | 6.6% |
| 500,000 | 5.5% reducing | 25 years | 3,070.44 | 421,131.24 | 5.5% |
The first two rows show why the rate type matters: the same “4%” loan costs almost twice as much in profit when the rate is flat.
Before you sign
This calculator gives an estimate. Your bank’s offer may include fees, insurance and other conditions. Always ask for the APR and the total amount payable, and compare offers on the same basis.