Rule of 78 Car Loan Settlement Calculator (Singapore)
Most car loans in Singapore use the Rule of 78 to calculate early settlement, which means the interest you've "saved" by paying early isn't a straight-line refund — it's weighted so you pay more interest in the early years of the loan. This calculator works out your exact settlement figure based on your original loan amount, interest rate, tenure, and the number of instalments you've already paid, so you know precisely what to expect before calling your bank or trading in your car.
| Total interest over full tenure (flat) | — |
| Outstanding instalments remaining | — |
| Unearned interest (Rule of 78) | — |
| Interest rebate to you (80% of unearned) | — |
| Bank's settlement charge (20% of unearned) | — |
Settlement = remaining instalments − unearned interest + 20% charge. Your bank's final quote may differ slightly due to payment dates and admin fees — always request an official redemption statement before committing.
I can run the full numbers with you — settlement, trade-in, and your next car — in one chat.
Common questions
Why is my settlement higher than I expected?
The Rule of 78 front-loads interest: in a 84-month loan, month 1 carries 84 "parts" of interest and the last month carries just 1. Settle at the halfway mark and you've already paid well over half the total interest — so the rebate is smaller than intuition suggests, before the 20% charge is even applied.
What exactly is the 20% settlement charge?
Under standard Singapore hire-purchase terms, the interest rebate on early settlement is reduced by 20% — the bank retains one-fifth of the unearned interest. This calculator bakes that into the final figure.
Why is the EIR so much higher than my flat rate?
A flat rate charges interest on your full original loan every month, even in the final month when your true outstanding balance is small. The EIR corrects for this by computing the internal rate of return on your actual cash flows — which is why a 2.78% flat rate works out to roughly 5%+ effective.