Car Loan Singapore
Are you planning to buy a car soon? Whether it is a brand new car or a second-hand car, it is definitely a good investment! Having a car will bring you lots of convenience and save you a lot of time. However, getting a car in Singapore is definitely not a cheap affair. The most famous COE burns a hole in your wallet and there are other taxes and maintenance fees as well.
Costs To Consider When Getting A Car In Singapore:
- Cost of the Car
- Certificate of Entitlement (COE)
- Goods and Services Tax (GST)
- Registration fees
- Road tax
- Carbon Emissions-Based Vehicle Scheme (CEVS)
- Additional Registration Fee (ARF)
- Special Tax
- Servicing and Maintenance Costs
You also have to add the cost of insurance as well as maintenance for the first few months to the total cost of purchasing the car to ensure that you’re ready to take it to the road once you have it. All these easily adds up to more than $120,000 which most Singaporeans and foreigners might not have enough to make a full payment.
With this huge price tag, are there ways to finance the cost of a car in Singapore?
4 Types Of Car Loans In Singapore
With the high costs of cars in Singapore, it’s not surprising that more people are opting for financing from different loan providers. Lenders in Singapore include banks, financial institutions and licensed private moneylenders.
There are different types of loans available in Singapore. The following are some of the most popular options.
1. Bank Loans
Most banks in Singapore offer financial help for car purchases. OCBC, DBS, UOB, Standard Chartered, Citibank and Bank of China offer their own financial products. Banks usually operate with traditional practices. This means that the requirements for qualifying for a bank loan are very stringent. You would have to present the bank with evidence of a stable income and excellent credit to get your loan application approved by the bank. The processing time may take up to weeks.
Banks often provide very good interest rates or promotions for car loans and this is because these loans are secured. The car you’re purchasing is often used as collateral for the loan and can be taken and sold by the bank to recover the loan if in the worst case scenario, you default on your payments.
2. Licensed Moneylenders
Other than banks, licensed moneylenders are also approved by the Ministry of Law to loan funds to others. These are definitely not loan sharks. This is also a popular source of financing when purchasing cars. There are many licensed moneylenders that can provide you with a loan to finance the purchase of your car. They are often not as strict as banks when it comes to the requirements for loan applicants. It is therefore possible to get a loan even with bad credit.
The terms of their loans are also often quite flexible. To remain competitive, moneylenders try to make their loans as attractive as possible. They may offer reduced interest rates or throw in some great deals.
The biggest question that comes to mind is how do you tell if the lender is licensed or not. You definitely do not want to end up at the mercy of loan sharks. Here are a few ways you can tell.
- Licensed moneylenders in Singapore are not allowed to sent SMSes or mobile advertisements.
- They also must have a landline (phone numbers starting with 6).
- They are not allowed to charge more than 4% interest per month.
- They must always sign a proper contract with you and are not allowed to transfer you the money immediately or without your full consent. Transferring you the money immediately could mean that they are forcing you to take up a loan amount that it too high for you.
You can read more about licensed moneylenders in Singapore here.
3. The Car Dealership
It’s also possible to obtain financing from the car dealership itself. These dealers work with banks to provide car buyers with financing for cars purchased from them. Many of these dealerships will provide you with financing at the same interest rate you would get if you took the loan from the bank. There are however, some dealerships that will charge extra fees or higher interest rates in order to generate more revenue.
4. Family or Friends
If you have a friend or family member that is wealthy and generous enough to lend you money to buy your car, consider yourself very lucky. This is the cheapest way to finance your purchase. You can negotiate for a low interest rate and pay off your debt in installments that are manageable. For some, their friends might not even charge them interest at all.
It’s important however, to keep up with your payments. Failing to repay a loan you took from someone in your social circle is the easiest way to break a relationship. If you value your relationship and appreciate their generosity, be sure to stay true to your commitment to repay their loan.
4 Tips You Should Know When Taking Car Loans
1. Pay as much as you can in monthly installments
Many lenders use low monthly payment options as a sales pitch. This is often an incentive for many consumers to take their loans. However, the downside is that you will take longer to repay your loan. You will end up paying more in overall interest as a result.
Opt to pay the highest amount you are comfortable with for monthly installments. This will ensure that you can pay off the loan faster and therefore spend less in total.
2. Check for early repayment options and fees
Lenders often charge consumers for paying their loans too early. Check the terms and conditions of the loan. If there is even a slight possibility that you may need to repay your loan early, ensure that you will not be charged extra for it. If there are extra charges for early repayment, then it will not be worth it to clear your loan earlier than the agreed deadline.
3. Compare rates and terms
Be sure to compare different loan packages before you sign up to any of them. This will ensure that you know all the options that are available to you. Ensure that you consider other charges and fees in your comparison. These fees and charges add up to the total cost of the loan.
4. Make a downpayment
This will mean digging into your savings to pay for the car. This however, will also mean not having to take a large loan to finance the purchase of your car. You will therefore have less to repay.
Whether you choose to finance your car through a bank loan, moneylender or with assistance from a friend or family member, it’s important to take the time to understand the terms of the loan. Take your time to ensure that you’re getting the best deal before signing anything.
Why BST Credit
If you need cash to tide you over an emergency, don’t panic. You don’t have to go through the tedious process of applying for a loan from a bank either. BST Credit provides an easy way to access funds fast.
We’re a legal and licensed money lender that places our customers first. Our car loan Singapore packages are designed to cater for the purchase of a car that brings convenience and saves you time. We provide you with the funds needed to drive your new car home.
We’ve helped many people to ease their financial burdens. Our flexible loan facilities make it possible to anyone to access funds at any time. You only need to fill in and submit the online application to get the approval process started.
We pride ourselves in having satisfied customers. Our experience over the years has helped us establish a strong reputation within the industry. Many of our customers are happy to recommend us to their relatives and friends for credit services.
If you need a car loan or any other loans, there’s no better lender to go to than BST Credit.
Do You Qualify For The Loan?
There are only three requirements to qualify for the loan:
- You must hold citizenship or permanent residence status for Singapore at the time of applying
- You should be not less than 21 years of age
- You should be fully employed.
The document requirements for the application are minimal. You should provide the following documents for the approval process.
- Proof of your income
This can be in the form of payslips, bank statements, income tax returns and other legal documents.
- NRIC copy
- Proof of your residential address
This may include utility bills in your name, phone bills or your rental agreement.
Apply Now To Get Your Automobile Loan
We know that those who apply for this loan need the money urgently. That’s why we’ve made the application process easy. It only takes a few minutes to complete the online application. All you need to do after that is wait to be contacted by one of our loan officers.
We’ve worked hard to reduce the time required for approval of loans. If you want to truly experience fast approval, ensure that you visit our offices with all the required documents when contacted by our officers. Our staff will work to ensure that your application is processed as quickly as possible.
There are no hidden charges to worry about. What you see is what you get. You can be sure that you can rely on us to provide you with a great deal when it comes to payday loans.