Are you planning to buy a car? Having a car is convenient when you cannot rely on public transport. It also gives you an option to carpool to work. Compare the interest rates offered by different banks on car loans, on BankBazaar. Check for promotional interest rates and other benefits offered by lenders.
The below table highlights car loan interest rates comparison offered by the various banks in Singapore.
|Car Loan Bank||Interest Rate||Tenure||Finance Margin||Know more|
|2.28% (EIR 4.29%)*||1 to 7 years||Up to 70%||Check More|
2.78% (EIR 5.32%) for new car
2.98% (EIR 5.68%) for used car (10 years old less)
3.25% (EIR 6.17%) for used car (10-11 years old)
|1 to 7 years||Up to 70%||Check More|
2.78% (EIR 5.09%) for new car
2.98% (EIR 5.46%) for old car
2.08% (EIR 4.03%) for refinancing
|1 to 7 years||
Up to 70%
Up to 100% (refinancing loan)
|3.25% p.a.||1 to 7 years||Up to 70%||Check More|
|3.5% p.a.||1 to 7 years||Up to 70%||Check More|
Hong Leong Finance
2.48% (EIR 4.77%) for a new car
2.78% (EIR 5.32%) for an old car
|1 to 7 years||Up to 70%||Check More|
SIF (Sing Investments & Finance Ltd)
|As per the bank’s discretion||1 to 7 years||Up to 70%||Check More|
|Singapura Finance||As per the bank’s discretion||1 to 5 years||Up to 60%||Check More|
*Finance margin is based on purchase or valuation price (whichever is lower).
New car: Suppose you want to buy a car that costs S$67,999. You deposit a downpayment of S$20,400 and take a loan for the remaining S$47,599 (P). At an interest rate of 2.78% p.a. (i) and tenure of 7 years (t), you will have to pay monthly instalments of S$676.93 for 84 months.
Interest amount = P x (i) x t = S$47,599 x (2.78/100) x 7 = S$9,262.77
Repayment amount = P + Interest Amount = S$56,861.77
The monthly payment must be the repayment amount divided by 84 months (7 years) = S$676.93
Used car: Suppose you want to buy a car that costs S$50,000. You deposit a downpayment of S$15,000 and take a loan for the remaining S$35,000. At an interest rate of 2.98% p.a. and tenure of 7 years, you will have to pay monthly instalments of S$503.58 for 84 months.
Interest amount = P x (i) x t = S$35,000 x (2.98/100) x 7 = S$7,301
Repayment amount = P + Interest Amount = S$42,301
The monthly payment must be the repayment amount divided by 84 months (7 years) = S$503.58
Car loans are provided by banks as well as finance companies. Finance companies work not only with banks, but also with insurance companies and car dealers to provide borrowers with affordable rates. In Singapore, you typically see the following types of car loans:
DBS/POSB: DBS and POSB banks provide car loans at 2.28% p.a. for a tenure of 1 to 7 years. For loan amounts less than or equal to S$20,000, you can borrow 70% of the valuation or purchase price, the lower value of the two. For a loan amount more than S$20,000, you can borrow 60% of the valuation or purchase price, the lower amount among the two. You can take this loan for new cars and old cars that are less than 10 years old from their original registration date.
UOB: UOB provides 3 car loans, all of whose tenures range from 1 to 7 years. Under the basic car loan, the interest rate for a new car starts at 2.78% p.a. and the rate for used cars that are 10 years old or less starts at 2.98% p.a. You can borrow up to 70% of the valuation or purchase price, the lower of the two. Under the UOB HP50 Car Loan, for 59 months, you will get up to 50% discount on your monthly instalments, after which you pay the remaining amount in the next month. UOB COE Car Loan allows you to buy a COE car that’s more than 10 years but less than 11 years old at an interest rate of 3.25% p.a.
OCBC: OCBC offers car loans for new cars, old cars, and refinancing your existing car loan at interest rates of 2.78% p.a., 2.98% p.a., and 2.08% p.a., respectively. The loan tenure can vary from 1 to 7 years and you can borrow up to 70% of the purchase or valuation price, the lower value among the two.
Maybank: Maybank provides car loans for new cars, old cars that are less than 10 years old, and old COE cars less than 20 years old at an interest rate starting at 3.25% p.a. The loan can be repaid in 7 years. You can get up to 70% of the purchase price or valuation, the lower of the two.
Standard Chartered: You can borrow from Standard Chartered to buy a car at interest rates starting at 3.5% p.a. You can borrow up to 70% of the valuation value or purchase price, the lower of the two. The loan can be repaid in up to 7 years.
Hong Leong Finance: HLF is a finance company that provides loans for new and old cars. You will be able to get up to 70% financing for the vehicle you want to buy. You can repay the loan in 7 years. The loan is also available for commercial vehicles. The interest rate offered on new cars starts at 2.48% p.a. (EIR 4.77% p.a.) and the rate for old cars starts at 2.78% p.a. (EIR 5.32% p.a.). HLF also provides fixed rates that protects you from rate fluctuations and offers a quick approval process.
SIF (Sing Investments & Finance Ltd.): SIF offers up to 70% financing for the purchase of a car. The loan amount can be repaid in 7 years by the means of monthly instalments.
Singapura Finance: This finance company provides you with loans for new and old cars. You can borrow up to 60% of the purchase price or the valuation price, the lower value of the two. The repayment period can go from 1 to 5 years. You can also get interest rebates in the case of early settlements. The loan approval process will not take long.
Hong Leong Bank: HLB offers a Hire Purchase Loan which lets you borrow up to 70% of the valuation price or purchase price, the lower of the two. The loan can be repaid in 7 years. You can make the monthly payments via GIRO as well.
The following criteria must be met to be able to secure a car loan:
Here are the documents that you must produce while applying for a car loan:
You can apply for a car loan in the following ways:
Before a borrower applies for a car loan, it is necessary that they factor in what their monthly installment will amount to. This is important as they can figure out how much they can afford to borrow. There’s no point going in for a loan with which they’ll struggle to keep up with repayments. Car loan EMI calculators are available online for this very purpose and one can even find it on BankBazaar. Car loan EMI calculators can offer the following benefits:
Let us take a look at some of the features and benefits of car loans in Singapore:
Some factors on the basis of which you must choose a car loan are listed below:
Q. Will my Hire Purchase application come under the Hire Purchase Act?
A. If the purchase price of the car after subtracting COE is not more than S$55,000, then it will come under the Hire Purchase Act. Otherwise, it will fall under the Common Law.
Q. How can I calculate the monthly instalments with the flat interest rate?
A. The principal amount must be multiplied by the tenure and the interest rate. This gives the payable interest. Add this to the principal and divide the final amount by the tenure (in months) to get the instalment amount.
Q. How do I terminate GIRO for my car loan?
A. You must write to the bank at least 5 business days before the next instalment date regarding the termination of GIRO. You must also fill a termination form, if applicable. It is recommended to enquire with the bank in advance.
Q. Do I need to inform the bank if I change my motor insurance company?
A. Yes, you must inform your bank if you change your motor insurance company. You may also have to send them a copy of the insurance policy.
Q. What are the differences between buying a used car and a new car?
A. The payable initial deposit may be higher for a used car. A COE will already be available, but you must make note of its expiry date and its worth. The used car will already have a registration number. You will also have to check the expiry date of the road tax and renew it before its expiry.
Q. What are the important things to look for in a sales agreement?
Make sure the sales agreement indicates the prices and the accessories you agreed upon. Check the processing fee and the status of the deposit you paid in case you are not able to secure a loan for the purchase of the car. However, it is better to read the entire agreement thoroughly.