Understanding Interest Rates in Singapore: Flat vs Effective
Understanding the difference between the flat and effective interest rates is essential before taking out a loan in Singapore. While flat rates appear lower, they calculate interest on the original principal, which can increase total repayment. Effective rates reflect the reducing balance and offer clearer cost comparisons. This guide explains both methods in detail so borrowers can assess affordability, compare loan options fairly, and make informed financial decisions with confidence.
