# Car loans in Singapore: MAS limits, flat rate vs effective rate, and how to choose a tenure > The MAS limits on how much you can borrow for a car and for how long, how a flat-rate instalment is worked out, and why the effective interest rate (EIR) is roughly double the flat rate. - Tool: [Car Loan Calculator](https://toolsg.com/en/car-loan-calculator) - Language: en (available: en, zh) - Last verified against official sources: 2026-10-27 - Source site: ToolSG — a planning guide, not official or financial advice. Cite the agencies listed under Sources. ## Key figures at a glance | Fact | Value | Source | | --- | --- | --- | | Maximum loan, OMV up to $20,000 | 70% of the purchase price — So the minimum down payment is 30%. | [MAS](https://www.mas.gov.sg/regulation/explainers/motor-vehicle-loans) | | Maximum loan, OMV above $20,000 | 60% of the purchase price — So the minimum down payment is 40%. | [MAS](https://www.mas.gov.sg/regulation/explainers/motor-vehicle-loans) | | OMV threshold for the loan limit | $20,000 | | | Maximum loan tenure | 7 years — Dealer in-house financing is outside the MAS rules. | [MAS](https://www.mas.gov.sg/regulation/explainers/motor-vehicle-loans) | ## Taking a car loan: step by step Do these before you sign a loan or sales agreement. 1. **Get the price and OMV** (Before visiting lenders) — The dealer’s price list shows the price including COE and the OMV. 2. **Apply the MAS limit** (Before choosing a down payment) — Loan is capped at 70% or 60% of the price depending on OMV; the rest is your down payment. 3. **Compare lenders by EIR** (When you have quotes) — Flat rates look low. Convert each quote to an effective rate to compare. Tools: [Personal Loan Calculator (Flat Rate to EIR)](https://toolsg.com/en/personal-loan-calculator) 4. **Pick a tenure** (Before signing) — A shorter tenure raises the instalment but cuts total interest. 7 years is the maximum. 5. **Check the total monthly cost** (Before signing) — Add road tax, fuel, parking and insurance to the instalment. Tools: [Car Affordability Calculator](https://toolsg.com/en/car-affordability-calculator) ## How much you can borrow MAS limits what a bank or finance company can lend for a car (agreements dated on or after 27 May 2016). The purchase price includes taxes and the COE. | Car's OMV | Maximum loan | Minimum down payment | | --- | --- | --- | | Up to $20,000 | 70% of the purchase price | 30% | | Above $20,000 | 60% of the purchase price | 40% | The maximum tenure is **7 years**. These are ceilings: the amount a lender approves also depends on your credit and total debt servicing. Dealer in-house financing is outside MAS rules. ## How the instalment is calculated Car loans are quoted at a **flat rate**: interest is charged on the original loan for every year. **Instalment = (loan + loan × flat rate × years) ÷ months** | Case | Instalment | Total interest | EIR | | --- | --- | --- | --- | | $150,000 car, OMV $25,000: $90,000 loan, 2.78% flat, 7 years | $1,279.93 | $17,514.12 | 5.19% | | $80,000 car, OMV $18,000: $56,000 loan, 2.5% flat, 5 years | $1,050.00 | $7,000.00 | 4.73% | ## Flat rate vs effective rate You repay principal every month, but interest is still charged on the original loan. The **effective interest rate (EIR)** is the reducing-balance rate that matches your instalments to the loan; it is typically close to double the flat rate. Compare lenders by EIR, not by flat rate. ## Choosing a tenure For a $90,000 loan at 2.78% flat: | Tenure | Monthly | Total interest | | --- | --- | --- | | 3 years | $2,708.50 | $7,506.00 | | 5 years | $1,708.50 | $12,510.00 | | 7 years | $1,279.93 | $17,514.12 | A shorter loan costs far less in interest but needs a higher monthly cash flow. > **Tip:** The instalment is only part of owning a car. Use the car affordability calculator to add running costs. ## Common mistakes - **Comparing flat rates with effective rates.** A flat rate understates the cost of borrowing. - **Using the wrong loan limit.** Check which side of $20,000 the OMV falls on. - **Assuming a tenure above 7 years.** It is not available from banks and finance companies. - **Forgetting fees.** Processing and early-repayment fees are not in the calculator. ## Related tools - [Car affordability calculator](https://toolsg.com/en/car-affordability-calculator) — loan plus running costs and depreciation. - [Personal loan calculator](https://toolsg.com/en/personal-loan-calculator) — flat rate to EIR with fees. - [COE total cost calculator](https://toolsg.com/en/coe-total-cost-calculator) — the upfront price of a car. - [PARF and COE rebate calculator](https://toolsg.com/en/parf-coe-rebate-calculator) — the value back at deregistration. ## Frequently asked questions **How much car loan can I get in Singapore?** 70% of the purchase price if the car’s OMV is $20,000 or less, and 60% if it is above, for up to 7 years. These MAS limits apply to banks and finance companies. **What is the minimum down payment for a car?** 30% of the price for cars with OMV up to $20,000, and 40% for cars above that. **How is a car loan instalment calculated?** Car loans use a flat rate: interest = loan × rate × years. Add that to the loan and divide by the number of months. **What is the effective interest rate (EIR) of a car loan?** The reducing-balance rate that equates your instalments to the loan. It is typically close to double the flat rate, for example about 5.19% for 2.78% flat over 7 years. **What is the maximum car loan tenure?** 7 years for loans from banks and finance companies under MAS rules. **Is a shorter or longer car loan better?** A shorter loan has a higher instalment but much less total interest. A longer loan eases the monthly burden but costs more overall. **Do dealer loans follow the same limits?** No. MAS limits apply to banks and finance companies. Dealer in-house financing is not regulated by MAS. **Is this an official calculation?** No. It is an estimate using published rules and your inputs. Check your lender’s offer. ## Sources - [MAS — Motor vehicle loans](https://www.mas.gov.sg/regulation/explainers/motor-vehicle-loans)