By MoneyBees
Work out a car loan's monthly instalment, total interest and the EIR behind a flat rate, and check the MAS limit of 70% or 60% of the price by OMV, for up to 7 years.
Up to 70% of the purchase price if the car's OMV is S$20,000 or less, and up to 60% if the OMV is higher. The purchase price includes the COE and taxes. These MAS limits apply to cars bought under agreements from 27 May 2016.
7 years, for new and used cars. MAS sets the same cap whatever the OMV.
Car loans are usually quoted at a flat rate. Interest is the loan times the flat rate times the years. Add it to the loan and divide by the number of months. S$90,000 at 2.5% flat for 7 years is S$15,750 interest and S$1,258.93 a month.
A flat rate charges interest on the full loan for the whole tenure, even after you have paid most of it back. The EIR measures interest on what you still owe, so it comes out close to double the flat rate. 2.5% flat over 7 years is about 4.79% EIR.
It reduces the OMV by the car's age: OMV minus (age in months divided by 120) times OMV, with the age rounded down to full months. A S$25,000 OMV car that is 37 months old counts as S$17,292, so the 70% limit applies.
No. Motorcycles and commercial vehicles are exempt, and so are cars for persons with disabilities or their caregivers.
Yes, up to the full amount you still owe, if the lender approves you. The new tenure can be at most 7 years minus the years since your first loan was paid out.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).