What is the EIR and why use it?

The effective interest rate (EIR) is the true annual cost of a loan including how the balance reduces over time, and Singapore lenders are required to disclose it. The advertised flat rate looks lower because it ignores the falling balance. Always model with the EIR for an accurate instalment.

How is the monthly instalment calculated?

The tool uses the standard amortising annuity formula. The monthly rate is the EIR divided by 12, and the instalment is the loan times that rate divided by one minus (1 plus the monthly rate) to the power of minus the number of months. Each payment is equal.

What rates do Singapore personal loans charge?

Bank personal loans typically carry an EIR of roughly 3.5% to 10% per year depending on your profile. Licensed moneylenders are legally capped at 4% interest per month. Always compare on EIR rather than headline flat rate.

Why does early interest look so high in the schedule?

Interest is charged on the outstanding balance, which is largest at the start. So early instalments are mostly interest and little principal. As the balance falls, more of each fixed payment goes to principal — that is how amortisation works.

Does this include processing fees or insurance?

No. It models pure principal and interest from the EIR you enter. Processing fees, late charges and optional insurance are excluded, so a real loan may cost a little more. Check the lender's full fact sheet before signing.

Singapore Personal Loan Calculator

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A Singapore personal loan calculator that shows your monthly instalment, total interest and a complete amortisation schedule using the effective interest rate (EIR) — the true cost of borrowing that Singapore lenders are required to disclose, not the misleadingly low flat advertised rate.

How it works

The calculator treats the loan as a fixed-instalment amortising loan. The monthly rate is the EIR divided by 12, and the equal monthly payment is:

M = P * r / (1 - (1 + r)^-n)

where P is the amount borrowed, r is the monthly rate and n is the number of months. Each month, interest is charged on the outstanding balance, and whatever is left of the instalment reduces the principal:

interest_m   = balance * r
principal_m  = M - interest_m
balance      = balance - principal_m

Because the balance is largest at the start, early payments are mostly interest and later payments are mostly principal — exactly what the schedule shows.

Example and notes

Borrow 20,000 SGD at a 7% EIR over 3 years (36 months). The instalment is about S$617.54 a month, total interest is roughly S$2,231, and you repay around S$22,231 in total.

Use the EIR, not the flat rate — a 4% flat rate is often close to a 7% EIR. Bank personal loans in Singapore typically run an EIR of 3.5-10%, and licensed moneylenders are capped at 4% interest per month. Fees and insurance are excluded. All figures are calculated locally in your browser.