Car Loans in Singapore: LTV, Flat Rates and Real Repayments
Understand the borrowing ceiling, compare effective interest rates and check the full repayment cost without treating housing TDSR as a car-loan budget.
A loan approval tells you what a lender will provide. It does not establish what your household can comfortably spend on a car. Check the deposit, total repayments and running costs separately.
Borrowing limits
The regulated motor-finance LTV ceiling depends on the applicable OMV basis: 70% at $20,000 or below and 60% above it, with a maximum seven-year tenure. Used-vehicle valuation and remaining entitlement require additional checks. A lender can offer less or a shorter term after assessing the application.
The property-loan TDSR framework is not a general rule that makes 55% of income available for a car loan. Existing car debt can matter when a housing loan is assessed, but a household still needs a separate cash budget for living costs and reserves.
Flat-rate arithmetic
For a hypothetical $100,000 loan at 2.78% annual flat interest, interest is calculated on the original principal for the agreed term. It is not recalculated each month on the reduced principal.
| Term | Interest | Monthly repayment |
|---|---|---|
| 5 years | $13,900 | $1,898.33 |
| 6 years | $16,680 | $1,620.56 |
| 7 years | $19,460 | $1,422.14 |
Moving from five to seven years reduces the monthly amount by about $476.19 but adds $5,560 interest. These are calculated examples, not lender offers.
Compare the effective rate and total payable
The effective rate accounts for the timing of repayments. Ask each lender for it, together with fees and the complete schedule. A 2.78% flat rate cannot be compared directly with a reducing-balance rate bearing the same number.
Also check whether a car discount depends on using a particular loan or insurance policy. Compare the combined purchase and financing cost, including any required minimum tenure or clawback.
Early settlement and refinancing
Get a dated settlement quotation before assuming you can repay the outstanding principal alone. Interest rebates, settlement fees and notice requirements depend on the agreement. A lower advertised replacement rate can still cost more after closing the old loan and paying new fees.
Build a budget that survives a change
After the deposit, preserve funds for living expenses and unexpected repairs. Check the monthly position under a temporary loss of income. Include insurance, road tax, parking, energy and servicing; principal repayments and depreciation should not both be added to the same economic-cost total.
Use the loan calculator to compare stated inputs and the lender’s documents for the actual obligation. No credit record, citizenship or vehicle label guarantees approval or a particular rate.
Sources and review date
Reviewed on 13 September 2026. Historical results retain their exercise dates; worked budgets are assumptions, not quotations.