Car Loans in Singapore 2026 — What You Need to Know
Buying a car in Singapore is expensive — a basic Toyota Corolla can cost S$120,000 due to the COE system. Understanding how car loans work, what MAS allows you to borrow, and which bank gives the best rate can save you thousands.
Calculate your exact monthly car loan payment with our free car loan calculator Singapore.
MAS OMV-Based LTV Rules for Singapore Car Loans
The Monetary Authority of Singapore (MAS) regulates car loan limits based on the vehicle's Open Market Value (OMV) — not the selling price. OMV is the base price of the car assessed by Singapore Customs, excluding COE, ARF, registration fees and GST.
LTV Limits Based on OMV
| Vehicle OMV | Maximum Loan (LTV) | Maximum Tenure |
|---|---|---|
| OMV ≤ S$20,000 | 70% of purchase price | 7 years |
| OMV > S$20,000 | 60% of purchase price | 7 years |
Real-World Examples
| Car | OMV | Selling Price | Max LTV | Max Loan | Minimum Cash |
|---|---|---|---|---|---|
| Honda Jazz | S$15,000 | S$95,000 | 70% | S$66,500 | S$28,500 |
| Toyota Corolla | S$22,000 | S$125,000 | 60% | S$75,000 | S$50,000 |
| BMW 3 Series | S$45,000 | S$245,000 | 60% | S$147,000 | S$98,000 |
| Mercedes C-Class | S$60,000 | S$290,000 | 60% | S$174,000 | S$116,000 |
*OMV and selling prices are approximate for illustration. Check OneMotoring or dealer for exact figures.*
You cannot use CPF to pay for a car in Singapore. All downpayments and monthly repayments must come from cash.
Flat Rate vs EIR — The Most Important Distinction
Singapore car loans advertise a flat rate — but what you actually pay is reflected by the Effective Interest Rate (EIR), which is significantly higher.
Why EIR Is Nearly Double the Flat Rate
The flat rate is calculated on the original loan amount throughout the tenure, even as you repay principal. This front-loads your interest cost compared to a reducing-balance loan.
| Flat Rate | Effective Interest Rate (EIR) |
|---|---|
| 2.28% p.a. | ~4.3% p.a. |
| 2.50% p.a. | ~4.7% p.a. |
| 2.78% p.a. | ~5.2% p.a. |
| 3.00% p.a. | ~5.6% p.a. |
| 3.50% p.a. | ~6.5% p.a. |
Always compare car loans using EIR, not flat rate.
Monthly Payment Comparison — S$60,000 Loan, 7 Years
| Flat Rate | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 2.28% | S$1,024 | S$9,600 | S$69,600 |
| 2.50% | S$1,036 | S$10,500 | S$70,500 |
| 2.78% | S$1,051 | S$11,700 | S$71,700 |
| 3.00% | S$1,063 | S$12,600 | S$72,600 |
Best Car Loan Rates Singapore 2026
| Bank | Flat Rate | EIR (7yr) | Max Loan | Notes |
|---|---|---|---|---|
| DBS | 2.28% p.a. | ~4.3% | 70%/60% OMV | Lowest current rate |
| OCBC | 2.50% p.a. | ~4.7% | 70%/60% OMV | Competitive, good for used cars |
| UOB | 2.68% p.a. | ~5.0% | 70%/60% OMV | Bundle discount with UOB card |
| Maybank | 2.78% p.a. | ~5.2% | 70%/60% OMV | Good for parallel import cars |
| CIMB | 2.88% p.a. | ~5.4% | 70%/60% OMV | More flexible approval |
| Hong Leong Finance | 2.68% p.a. | ~5.0% | 70%/60% OMV | Strong in used car segment |
*Rates as of May 2026. Subject to change — confirm directly with lenders.*
New Car vs Used Car Loan — Key Differences
| New Car Loan | Used Car Loan | |
|---|---|---|
| LTV | Based on purchase price | Based on lower of purchase price or bank valuation |
| Interest rate | Generally lower | Slightly higher |
| Maximum tenure | 7 years | 7 years (restricted if COE < 7 years remaining) |
| Documentation | Dealer invoice | May require independent valuation |
Important: Used Car COE Consideration
For used cars, the loan tenure cannot exceed the remaining COE period. If a car has 5 years of COE left, your maximum loan tenure is 5 years — and banks may not approve full LTV for short-COE vehicles.
How to Apply for a Car Loan in Singapore
Step 1: Know Your Budget
Use our car loan calculator to find the monthly payment you can comfortably afford. A good rule: car loan repayment should not exceed 15–20% of take-home pay.
Step 2: Check Your TDSR
All car loan repayments count toward your TDSR (55% cap on total debt). If you have or plan to have a home loan, ensure the car loan does not push you over the 55% limit.
Step 3: Find the Car and Get a Quotation
Get the official dealer quotation showing OMV, COE bid amount, ARF, and total purchase price.
Step 4: Compare Bank Rates
Do not just take the dealer-arranged financing. Apply directly to DBS, OCBC and UOB yourself — dealer finance often has higher rates because the dealer earns a referral commission.
Documents Required
- NRIC (front and back)
- Latest 3 months payslips or CPF contribution history
- Income Tax Notice of Assessment (latest)
- Car dealer quotation or hire purchase agreement
Step 5: Loan Approval and Disbursement
Bank approval typically takes 1–3 business days. The loan is disbursed directly to the car dealer, not to you. You collect the car after the loan is disbursed.
Special Car Loan Considerations in Singapore
Parallel Import Cars
Parallel import (PI) cars can also be financed. LTV rules are the same, but some banks are more cautious. Hong Leong Finance and Maybank are typically more accommodating for PI vehicles.
Electric Vehicles (EVs)
EV car loans follow the same MAS LTV rules. Singapore's EV rebate (currently up to S$45,000 for eligible models) reduces the purchase price — this effectively lowers the loan amount needed.
Total Cost of Car Ownership — Beyond the Loan
| Cost | Annual Estimate |
|---|---|
| Loan repayment | ~S$12,000–S$20,000 |
| Insurance | S$1,500–S$3,000 |
| Road tax | S$700–S$2,000 |
| Petrol | S$3,000–S$6,000 |
| Maintenance/servicing | S$1,000–S$2,000 |
| Parking | S$1,200–S$3,600 |
| Total annual | S$19,400–S$36,600 |
Frequently Asked Questions
What is OMV and where can I check it?
OMV (Open Market Value) is the price Singapore Customs assigns to a vehicle. You can check any car's OMV on the LTA OneMotoring website using the vehicle registration number or searching by make and model.
Can I get a car loan for a car with only 2–3 years of COE left?
Most banks will not finance cars with very short COE remaining. Some may offer loans up to the remaining COE period but at reduced LTV. Renewing COE and refinancing is sometimes an option.
Can I use CPF to pay for a car or car loan?
No. CPF funds cannot be used for vehicle purchases or car loan repayments under any circumstances. All car-related payments must come from cash.
Does having a car loan affect my home loan eligibility?
Yes significantly. Your car loan repayment counts toward your TDSR. A S$1,200/month car loan on a S$6,000 salary uses 20% TDSR, leaving only 35% for a home loan — limiting your borrowing capacity substantially.
What is the maximum car loan tenure in Singapore?
The maximum car loan (hire purchase) tenure is 7 years (84 months), as regulated by MAS. This applies to both new and used cars.
Use our car loan calculator to compute your exact repayment schedule, EIR and total cost for any car loan in Singapore.
About this guide
Published by LoanCalculatorSingapore.com on . Rates and regulatory limits quoted here reflect publicly available information at the time of writing and change frequently — confirm current figures with the lender or the relevant Singapore authority before you act on them.
Official references: MAS, HDB, CPF Board, IRAS.
We are not a licensed financial adviser. This guide is general information, not personalised financial advice. See our full disclaimer.