How is the interest on my DBS/POSB Personal Loan repaid across the monthly instalments?

Hello all, I would be glad to know how the interest on my DBS/POSB Personal Loan is repaid across the monthly instalments as this will help me better understand the strategy to take in loan repayment.

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    Assuming that you are taking up a loan at $5,000 at 3.88% p.a. for 2 years (EIR 8.20% p.a. inclusive of 1% processing fee), your monthly instalment will come up to be about $224.50 and there will be no change to it throughout the tenure of the loan. Monthly interest and principal are apportioned differently; in the earlier instalments, a larger portion of your monthly instalment goes towards paying off the interest on the loan. The interest portion will be reduced gradually with each instalment.

    2019.08.01 6:46

    Please leave your knowledge and opinion!

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