Hobo Finance

Flat-rate loan and EIR

Enter the flat rate from a car or personal loan advert to see the effective rate you pay.

The yearly rate in the advertisement. It is charged on the full amount for the whole loan.

Processing fee deducted from the loan or paid at the start.

Year by year

Hover or tap a bar to see that year.

Show the figures for every year

How this is worked out

  • Compare loans by EIR. Never by the flat rate. Lenders in Singapore must show the EIR next to the advertised rate.
  • What a flat rate does. It charges interest on the full amount borrowed for every year of the loan, even though you owe less after each repayment.
  • The interest. Amount × rate × years. It is added to the loan and divided into equal monthly repayments.
  • Why the true cost is higher. You pay interest on money you have already returned. The true cost is close to double the advertised figure.
  • What EIR means. The yearly rate, compounded monthly and counting upfront fees, at which your repayments match the money you received.