How Car Loans Work in Singapore
Car loans in Singapore are strictly regulated by MAS. Unlike home loans, car loans are entirely cash-based — CPF funds cannot be used for vehicle purchases. The maximum loan depends on the car's Open Market Value (OMV), not the purchase price or COE.
Understanding OMV (Open Market Value)
OMV is the price assessed by Singapore Customs for an imported vehicle, excluding COE, ARF, registration fees and GST. Every car has an official OMV, which you can check on the LTA website or OneMotoring portal.
The reason OMV matters: MAS uses OMV to cap car loan quantum:
- OMV ≤ S$20,000: Maximum loan = 70% of OMV - OMV > S$20,000: Maximum loan = 60% of OMV - Maximum tenure: 7 years
Car Loan Rate Comparison 2026
Current flat rates from major Singapore banks for new cars:
- DBS: 2.78% p.a. flat (EIR ~5.2%) - OCBC: 2.68% p.a. flat (EIR ~5.0%) - UOB: 2.88% p.a. flat (EIR ~5.4%) - Maybank: 2.78% p.a. flat (EIR ~5.2%)
Always compare using EIR (Effective Interest Rate), not flat rate. A flat rate of 2.78% translates to roughly 5.2% EIR since interest is calculated on the original loan amount throughout the tenure.
How to Apply for a Car Loan in Singapore
1. Get loan pre-approval from your chosen bank before visiting a dealership 2. Confirm the car's OMV on the LTA website to know your maximum loan 3. Factor in TDSR — total debt repayments must not exceed 55% of gross income 4. Provide: NRIC, payslips (3 months), CPF statement, bank statements 5. Sign the Hire Purchase Agreement once approved
Should You Maximise Your Car Loan?
Taking the maximum loan frees up cash but costs more in interest. With a S$100,000 car loan at 2.78% flat over 7 years, you pay approximately S$19,460 in total interest. Paying 30–40% upfront instead can save thousands.
Calculate Your Car Loan
Use our car loan calculator Singapore to estimate your exact monthly repayment and total interest cost.