Asan Tata— November 1, 2026Reports in late October 2026 suggested that moving a loan from one UAE bank to another could become harder from January 2027. The story spread quickly, because many residents compare loan offers every year. It is important to separate what has been reported from what the Central Bank of the UAE has actually confirmed. At the time of writing, the reported 2027 limits are still unconfirmed. The current transfer rule still applies, and no borrower needs to rush a decision based on a rumour alone.
Quick Answer
Today, you can transfer a personal loan from one UAE bank to another. Under the Central Bank of the UAE rules for individual customers, the early settlement fee is capped at 1% of the outstanding amount, or AED 10,000, whichever is less. The bank that takes over the loan must follow the Central Bank rules in full, including the rules on the loan amount, the repayment period, and the monthly instalment.
The reported change is different. Banks are reportedly preparing for new limits from 1 January 2027: a set stay with the original bank, plus a minimum number of instalments, before moving. The waiting period, instalment count, exemptions, and exact start date are unconfirmed. Until the Central Bank publishes formal instructions, the current rule applies.
What Is a Loan Transfer?
A loan transfer, often called a buyout, is a simple idea. A new bank pays off your current loan. You then repay the new bank under a new agreement. People usually consider this for a lower interest rate, a lower monthly payment, or a different repayment period.
A transfer is not a guarantee. A bank can decline it or offer different terms from an advertisement. Only a written offer, based on your own file, shows what you will pay. Do not stop paying your current loan while a transfer is in progress.
What Is Confirmed Today?
The confirmed position comes from the Central Bank of the UAE Regulations Regarding Bank Loans and Other Services Offered to Individual Customers. The rule on personal loan transfers has been in place for years, with an amendment on this point in 2018. It gives borrowers a clear right to move, subject to a capped fee.
For a personal loan, the early settlement fee cannot exceed 1% of the remaining amount, or AED 10,000, whichever is less. This is the maximum. Your bank may charge less, and your contract and settlement letter will show the exact figure. Value Added Tax may apply on top of bank fees, so ask for the total figure in writing.
The bank that accepts the transfer must also follow the Central Bank rules in full. The new loan amount, repayment period, and monthly instalment must all fit the normal personal loan limits. A transfer does not remove these limits.
Banks also ask for a liability letter from your current bank. It states the exact amount needed to close the loan, including any fee, and how long that figure stays valid.
The Fee Cap in Plain Numbers
The cap is easy to test with simple examples. These are illustrations only, not quotes for your loan.
| Outstanding personal loan balance | 1% of the balance | Maximum early settlement fee |
|---|---|---|
| AED 60,000 | AED 600 | AED 600 |
| AED 150,000 | AED 1,500 | AED 1,500 |
| AED 400,000 | AED 4,000 | AED 4,000 |
| AED 1,200,000 | AED 12,000 | AED 10,000 (the cap applies) |
The cap only limits the early settlement fee. It does not cover every cost of a transfer. The new bank may charge its own processing fee. There may also be insurance or other charges linked to the new loan. Always compare the full cost, not just the settlement fee.
What Has Been Reported About 2027?
On 26 October 2026, Gulf News and Emirates 24|7 reported that the UAE banking sector was preparing for new controls on loan transfers. The reports quoted a banking source who asked not to be named. The source said the measures could take effect from 1 January 2027. The same story was picked up again in a weekly roundup on 1 November 2026.
According to the reports, borrowers would have to remain with the bank that gave them the finance for a set period. They would also have to pay a set number of instalments before they could transfer the outstanding debt to another bank. The aim, according to the source, is to regulate customer transfers and to reduce frequent switching between banks to chase competing offers. The source also linked the plan to a wish to cut short-cycle loan closures and repeated refinancing over short periods.
That is the full extent of the reported detail. No waiting period has been published. No minimum number of instalments has been published. No list of exemptions has been published. It is also not confirmed whether the limits would apply only to personal loans, or to other banking liabilities as well. The reports themselves stress that the final details remain subject to official confirmation.
Nothing in the current rule has changed at the time of writing. No Central Bank circular, notice, or statement about a minimum stay before a loan transfer had been found on the Central Bank website or in its rulebook when the reports were checked on 26 October 2026. A rule that affects many borrowers would normally appear in a formal instruction, not only in an unnamed-source report.
Reported Versus Confirmed: At a Glance
| Point | Status |
|---|---|
| Personal loan early settlement fee cap: 1% or AED 10,000, whichever is less | Confirmed under current Central Bank rules |
| Right to transfer a personal loan to another UAE bank | Confirmed under current Central Bank rules |
| New bank must follow Central Bank rules on amount, period, and instalment | Confirmed under current Central Bank rules |
| Minimum stay with the original bank before a transfer | Reported only; length not published |
| Minimum number of instalments before a transfer | Reported only; number not published |
| Start date of 1 January 2027 | Reported only; not officially confirmed |
| Exemptions and scope across loan types | Not published |
How a Loan Transfer Works Today
The steps below describe the normal process for a personal loan transfer. Banks may vary the order or the documents, so treat this as a guide, not a promise.
Step 1: Get a Written Offer From the New Bank
Ask the new bank for a written offer showing the rate, monthly instalment, repayment period, processing fee, insurance cost, and total repayment over the full term. A lower monthly payment alone does not prove a cheaper loan, because a longer term can raise the total cost.
Step 2: Ask Your Current Bank for a Settlement Figure
Ask your current bank for a liability letter and settlement quotation. Check the balance, the fee, and the expiry date. If it expires before settlement, ask for a fresh one.
Step 3: Compare the Full Cost, Not Just the Rate
Compare both loans over the same remaining period. Add the settlement fee, new processing fee, and other charges, then compare total repayment. If the saving is small, the effort and delay risk may not be worth it.
Step 4: Complete the New Bank Checks and Settlement
The new bank will check your salary, your employment, your credit record, and your other debts. It will confirm that the new loan fits the Central Bank limits. Once approved, the new bank settles the old loan. Ask for written confirmation that it is closed, and check your next statement and first new instalment.
Should You Move Now or Wait?
There is no single answer, because it depends on your rate, your remaining term, and your costs. The reports do not justify panic. They also do not justify ignoring the story completely. The sensible approach is to gather facts before you act.
If your rate is high and a written offer shows a clear saving after all fees, a transfer today may make sense. If the saving is small, or the offer depends on a long grace period hiding a higher later cost, waiting may be wiser. Get the offer in writing, not just verbally.
Do not rush to beat 1 January 2027 on an unconfirmed date. If formal rules arrive, they may include exemptions, or apply only to new loans or certain loan types. Those details will only be clear when the regulator publishes them.
Also consider your wider finances. Extra cash on top of the old balance raises your total debt, so think about the total debt, not only the monthly payment.
Questions to Ask Both Banks
Use this checklist before you sign anything. Ask for every answer in writing.
- What is the exact early settlement fee, including VAT, and until when is it valid?
- What is the new interest rate, and is it fixed or variable? If it is fixed, for how long?
- What is the new monthly instalment, the repayment period, and the total amount repayable?
- What processing fee, insurance cost, or other charge applies at the new bank?
- What documents are needed, and how long will approval and settlement take?
- What happens if the transfer is delayed past the settlement figure expiry date?
- Will the new loan require a salary transfer, and what happens if you change jobs?
- Is there a grace period, and what does the instalment become when it ends?
If a bank cannot answer a question in writing, treat that as a warning sign. A clear offer should survive a written check.
What to Watch For Next
Watch for a formal Central Bank announcement. That is the only source that can confirm a new minimum stay, a minimum number of instalments, or a start date. A bank notice alone is not the same as a regulator rule, although banks will follow formal instructions once they are issued.
Watch also for scope and exemptions. A personal loan rule may not apply in the same way to mortgages or car loans.
Frequently Asked Questions
Can I transfer my personal loan to another UAE bank today?
Yes, under the current Central Bank rules, subject to the fee cap of 1% or AED 10,000, whichever is less. The new bank must still approve the loan and follow the Central Bank rules.
Will I have to wait before transferring my loan from January 2027?
That has been reported, but it is not confirmed. Reports say borrowers may have to stay with the original bank for a set period and pay a minimum number of instalments first. The length of the wait, the number of instalments, and the start date have not been officially published.
How much is the early settlement fee on a personal loan?
At most, 1% of the outstanding balance, or AED 10,000, whichever is less. Your exact fee depends on your balance and your contract. Ask your bank for a written settlement figure, including any VAT, before you decide.
Does the reported change affect mortgages and car loans?
That is not clear yet. The reports do not confirm the scope. They say the planned rules are expected to clarify whether the limits apply only to personal loans or to other banking liabilities as well. Check your own product terms and wait for formal guidance.
Should I transfer my loan now to avoid the reported 2027 limits?
Do not decide on the report alone. Compare a written offer with your current loan, including all fees and total repayment. If the saving is clear, a transfer may make sense. If it is small or unclear, waiting may be safer.
Disclaimer: This article is general information only. It is not financial advice, and it is not an offer of credit. Loan terms vary by bank, product, and personal circumstances. Always confirm fees, rates, and conditions in writing with your bank, and check the Central Bank of the UAE for the latest formal rules before you act.
Last Updated: 1 November 2026
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