Car Loan

To apply for a car loan in Singapore, you must approach banks or financial institutions offering auto financing.

As a car dealership, we help buyers apply for car loans. They will require documentation such as proof of income, identification documents, and details about the vehicle you wish to purchase.

Various elements can impact your qualification for a car loan, such as your credit score, income stability, employment background, debt-to-income ratio, and the value of the vehicle you intend to purchase. Each lender may have its own set of approval requirements.

While having bad credit may make it more challenging to secure a car loan, some lenders offer options specifically designed for individuals with less-than-perfect credit scores.

The approval process can vary depending on the lender, but it usually takes 1-3 business days.

In Singapore, under section 4(1)(a) of the Hire-Purchase (Motor Vehicles) Regulations 2013, if the car’s Open Market Value (OMV) is less than or equal to $20,000, the car buyer must provide a deposit that is at least 30% of the purchase price. If the car’s Open Market Value (OMV) exceeds $20,000, the buyer must deposit at least 40% of the purchase price.

The repayment period ranges from 1 to 7 years. The primary distinction lies in the interest rates offered.

Apart from interest rates, you may need to consider processing fees, late payment penalties, early repayment fees, and other charges that could apply depending on the lender.

Neglecting to meet the obligations of your car loan can result in the lender seizing your vehicle and negatively affecting your credit rating. Therefore, it is essential to communicate effectively with your lender to identify potential remedies if you encounter difficulties making payments.

The penalty for early payment of auto loans in Singapore is an often overlooked aspect of car financing that deserves more attention. While penalising borrowers who want to pay off their loans ahead of schedule may seem counterintuitive, most lenders impose such penalties to protect their expected interest earnings. The penalty fees vary between lenders but typically range from one to three per cent of the outstanding loan amount.

Prospective car buyers in Singapore should carefully consider how long they plan to keep the car before deciding whether to take out an auto loan with early repayment penalties.

It’s when the car buyers want to borrow for the entire car value as part of the loan.

By opting for a zero-down loan, you expose yourself to elevated interest rates due to being perceived as a high-risk borrower by the lender.

Additionally, you finance more significantly, which increases interest payments over the long term and translates into a higher monthly mortgage payment.