Loan Calculator Singapore: Flat Rate, EIR and Monthly Instalment
S$300, usually deducted from the cash you receive.
Advertised rate vs real cost
Monthly instalment
S$920.83
- Flat rate (quoted)
- 3.50% p.a.
- EIR, including fee
- 7.28% p.a.
- EIR, before fee
- 6.60% p.a.
- EIR vs flat rate
- 2.08x
- Total repaid
- S$33,150
- Loan amountS$30,000
- Processing feeDeducted upfront−S$300
- Cash in your accountS$29,700
- 36 monthly instalments of S$920.83S$33,150
- Interest3.50% flat × S$30,000 × 3 yearsS$3,150
Why the EIR is higher
Flat interest is S$1,050 every year, worked out on the full S$30,000. But what you actually owe falls with every instalment:
- Year 1S$29,700
- Year 2S$20,509
- Year 3S$10,626
Amount owed at the start of each year, on a reducing-balance basis at the EIR.
Banks in Singapore advertise personal loans at a flat rate but must also show the EIR. Compare loans on EIR: it counts fees and the fact that you repay principal every month while interest stays charged on the original amount.
How this works
Singapore personal loans are usually advertised at a flat rate. Interest = loan amount × flat rate × years, charged on the full amount for the whole tenure. The monthly instalment is (loan amount + interest) ÷ number of months. A S$30,000 loan at 3.5% flat over 3 years costs S$3,150 in interest and S$920.83 a month.
The effective interest rate (EIR) is the true yearly cost. Because every instalment repays part of the principal, you owe less and less, yet interest is still charged on the original sum. The calculator finds the monthly rate at which the instalments exactly repay the cash you actually received (the loan minus any processing fee deducted upfront) and multiplies it by 12, which is how banks quote EIR. On UOB's published EIR table this method matches to within 0.06 percentage points.
That is why the EIR is roughly 1.8 to 2 times the flat rate: on average you only hold about half the money over the loan's life. A rough rule of thumb (it runs slightly high) is EIR ≈ flat rate × 2n ÷ (n + 1), where n is the number of monthly instalments, before fees. A processing fee pushes the EIR higher, and more so on short loans.
Under the Association of Banks in Singapore's Code of Advertising Practice, a bank that advertises a loan interest rate must also state the EIR when the two differ. Compare offers on EIR, not on the flat rate.
FAQs
What is the EIR of a 3.5% flat rate personal loan?
A 3.5% flat rate over 3 years works out to an EIR of about 6.60% a year with no fee, and about 7.28% with a 1% processing fee deducted upfront. Over 1 year the same flat rate is about 6.40% EIR before fees.
How much is the monthly instalment on a S$30,000 loan?
At 3.5% flat over 3 years, a S$30,000 personal loan costs S$920.83 a month for 36 months: S$3,150 of interest plus the S$30,000 principal, spread evenly.
Why is EIR almost double the flat rate?
Because flat interest is charged on the full loan for the whole tenure, even though you repay part of it every month. On average you only owe about half the original amount, so the real cost of each dollar you still owe is close to twice the flat rate: 3.5% flat over 3 years is about 6.6% EIR.
Does a processing fee change the EIR?
Yes. A fee deducted from the loan means you receive less cash but repay the same instalments. On a 3-year loan at 3.5% flat, a 1% fee raises the EIR from about 6.60% to about 7.28%.