By MoneyBees
A balloon scheme car loan worked out: the lower monthly instalment, the lump sum due at the end, and the total interest and EIR against a normal car loan within MAS limits.
A car loan where part of the amount borrowed is deferred to a lump sum paid with the last instalment. The monthly instalments are lower, but you owe a large sum at the end.
Take the loan, subtract the deferred amount, add the total interest and divide by the number of months. On S$100,000 at 2.5% flat over 5 years with S$30,000 deferred, that is S$1,375 a month.
Usually. With flat interest on the full loan you pay interest on the deferred part for the whole tenure, and DBS notes balloon schemes come with higher interest rates. Compare the total interest of both loans.
The same MAS limits apply: 70% of the price if the OMV is S$20,000 or less, 60% if more, over at most 7 years. The price includes taxes and the COE.
Lenders set it. Some base it on the car's PARF rebate. Ask your lender for the exact amount before you sign.
You pay the lump sum, or sell or trade in the car and use the proceeds. Check your agreement for conditions and penalties if you change cars early.
Yes. Setting aside the deferred amount divided by the months each month means the lump sum is ready. That brings your total monthly outlay close to a normal loan's.
MoneyBees found balloon schemes on finance companies' own pages, such as Tokyo Century Leasing, but not on the main banks' car loan pages read on 3 Oct 2026.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).