How to Calculate Car Loan in Singapore: A Step-by-Step Guide
Car loans in Singapore are quoted at a flat rate. This shows the monthly instalment and the real effective rate.
Interest rates, instalments and returns compound over years, so a small difference in rate or tenure turns into thousands of dollars. Working the numbers out yourself makes it easier to compare bank offers, avoid expensive debt and plan savings goals.
What you need
- Loan amount (S$)
- Flat interest rate (% a year)
- Tenure (years, max 7)
Step by step
- Enter the loan amount (S$).
- Enter the flat interest rate (% a year).
- Enter the tenure (years, max 7).
- The results update as you type, or press Calculate.
- Read the monthly instalment first, then the supporting figures below it.
The formula
Total interest = loan × flat rate × years; instalment = (loan + interest) ÷ months.
Worked example
For example, with these inputs:
- Loan amount (S$): 70,000
- Flat interest rate (% a year): 2.78
- Tenure (years, max 7): 7
the calculator returns:
- Monthly instalment: S$995.50
- Total interest: S$13,622.00
- Effective interest rate (EIR): 5.19%
A second example
Now change the inputs to:
- Loan amount (S$): 87,500
- Flat interest rate (% a year): 2.78
- Tenure (years, max 7): 7
the calculator returns:
- Monthly instalment: S$1,244.37
- Total interest: S$17,027.50
- Effective interest rate (EIR): 5.19%
Practical tips
- Compare loans by effective interest rate, not flat rate; the EIR is roughly double the flat rate.
- Use realistic return assumptions; long-term projections at high rates can be very misleading.
- Check for early repayment penalties and processing fees before taking any loan.
- Even small monthly contributions grow meaningfully over 20 years because of compounding.
Background
Interest in Singapore is quoted in several ways. Mortgages and savings accounts use effective annual rates, while car loans and many personal loans are advertised at flat rates that look much lower than their true cost. Banks must disclose the effective interest rate, and comparing on that basis gives a fair picture.
Cars in Singapore carry costs found almost nowhere else, including the Certificate of Entitlement and the Additional Registration Fee. Loans are capped at 60% or 70% of the price depending on the car's Open Market Value, and the maximum tenure is seven years.
Compounding is the reason long-term saving works: returns earn further returns, so the growth curve steepens over time. The same maths works against you with debt, which is why credit card balances at around 27% a year grow quickly if only minimum payments are made.
Related calculations
- Personal Loan Calculator (Flat Rate): Singapore banks advertise personal loans at flat rates.
- Flat Rate to EIR Converter: Converts an advertised flat interest rate into the equivalent effective interest rate.
- Compound Interest Calculator: Shows how money grows with compound interest.
- Simple Interest Calculator: Calculates simple (non-compounding) interest.
Want to skip the arithmetic? The free Car Loan Calculator does all of this instantly and updates as you type.
Run your own numbers: Car Loan Calculator