A car loan is a term loan taken to buy a new or used motor vehicle, including under hire purchase. MAS sets maximum limits on both the loan amount and the loan tenure.
Key takeaways
- For a vehicle with an Open Market Value of SGD 20,000 or less, the maximum loan-to-value is 70%; above SGD 20,000 it is 60%.
- The maximum loan tenure is 7 years in both OMV bands.
- These limits apply where the agreement to purchase the vehicle is dated on or after 27 May 2016.
- LTV is measured against the purchase price, which includes the relevant taxes and the COE price — not against the OMV.
- Car loan interest is commonly quoted as a flat rate on the original amount, so the Effective Interest Rate is higher than the advertised rate.
The MAS financing limits
MAS caps motor vehicle financing by reference to the vehicle Open Market Value. Where the OMV is SGD 20,000 or less, the maximum LTV is 70% and the maximum tenure is 7 years. Where the OMV is more than SGD 20,000, the maximum LTV is 60% and the maximum tenure is again 7 years. The LTV is the loan expressed as a percentage of the purchase price of the vehicle, and that price includes the relevant taxes and the COE price. The limits apply to anyone financing a new or used motor vehicle where the purchase agreement is dated on or after 27 May 2016.
What falls outside the limits
- Motorcycles and commercial vehicles
- Motor vehicles for people who are physically disabled, and for their caregivers
Flat-rate interest and the EIR
MoneySense notes that a flat rate is commonly used for car loans: interest is calculated on the original loan amount and the monthly interest stays the same throughout, even as the outstanding balance falls. Because of that, the Effective Interest Rate on a car loan is higher than the advertised flat rate, and a longer tenure raises the total interest even though the monthly payment is smaller.
Refinancing and debt servicing
Where the agreement to purchase was dated on or after 26 February 2013, a motor vehicle loan can be refinanced up to the full outstanding amount, with a maximum tenure of 7 years minus the number of years since the loan was first disbursed, subject to the lender credit assessment. For agreements dated before 26 February 2013, the maximum tenure runs to the validity of the COE instead. Separately, MAS requires car loans to be counted in a borrower total monthly debt obligations when a Total Debt Servicing Ratio is computed for a property loan, against the 55% threshold.
Key car loan figures
| Item | Figure |
|---|---|
| Maximum LTV — OMV of SGD 20,000 or less | 70% |
| Maximum LTV — OMV above SGD 20,000 | 60% |
| Maximum loan tenure | 7 years |
| Limits apply to purchase agreements dated | on or after 27 May 2016 |
| Maximum tenure on refinancing (agreement from 26 Feb 2013) | 7 years minus years since first disbursement |
Figures as at 2026. Source: MAS.
Worked example
A car with an Open Market Value of SGD 25,000 falls in the band above SGD 20,000, so the maximum LTV is 60%. On a purchase price of SGD 160,000 including taxes and COE, the largest loan available is SGD 96,000, leaving SGD 64,000 payable upfront. The OMV and purchase price here are illustrative assumptions, not market figures. Separately, MoneySense illustrates that an SGD 90,000 loan at 2.5% p.a. flat costs SGD 11,250 in interest over 5 years and SGD 15,750 over 7 years.
Related terms
All Singapore glossary terms →Related calculator
Estimate the monthly instalment and total interest on a car loan within the MAS LTV and tenure limits.
This page is provided for educational and informational purposes only. It does not constitute financial advice. All figures and worked examples are estimates for illustrative purposes, are subject to change, and do not reflect any individual’s circumstances. Always refer to MAS and MoneySense and seek independent professional advice before making any financial decisions.