• Car Loan BYTES FROM OUR KITCHEN

    Car Loan in Singapore

    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.

    Car Loan Interest Rate 2019 in Singapore

    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
    dbs car loan

    DBS

    2.28% (EIR 4.29%)* 1 to 7 years Up to 70% Check More
    uob car loan

    UOB

    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
    ocbc car loan

    OCBC

    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)

    Check More
    maybank car loan

    Maybank

    3.25% p.a. 1 to 7 years Up to 70% Check More
    standard chartered car loan

    Standard Chartered

    3.5% p.a. 1 to 7 years Up to 70% Check More
    hlf car loan

    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 car loan

    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

    *Promotional rates.

    *Finance margin is based on purchase or valuation price (whichever is lower).

    Illustration:

    Types of Car Loans

    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:

    • New car loans: These loans are sought-after by borrowers looking to purchase a new car. Almost all banks in Singapore offer car loans that allow customers to purchase a new car from the showroom of a car manufacturer or an authorised dealer. Tenures of such car loans vary from one to seven years.
    • Used car loans: As the name suggests, this car loan is often opted by borrowers looking to purchase a used car. Used cars come with certain drawbacks and used car loans usually carry with it a unique set of eligibility criteria pertaining to the age of the car. Used cars are, however, much cheaper than new ones and hence is a popular choice among those looking to purchase a car at a lower cost.
    • Commercial car loans: These loans are given out to those borrowers looking to purchase a car for commercial purposes. Cars intended to be used as taxi or cabs, company cars, etc. can be purchased through this loan.
    • Car loan refinancing: Car loan refinancing is akin to a balance transfer of a car loan. In this category, borrowers with an existing car loan can switch from one bank to another for more affordable interest rates. Under this type of car loan, the new bank to which you transfer the loan will pay off up to 100% of the outstanding loan amount and will refinance the car on newly-agreed terms.

    Comparison of the Best Car Loans in Singapore

    car loan in Singapore

    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.

    Eligibility Criteria to Apply for a Car Loan

    The following criteria must be met to be able to secure a car loan:

    • Singapore citizens, Permanent Resident, and foreigners are eligible.
    • You must be at least 21 years old.
    • You must have an above average credit score.
    • While there is no specific income requirement set forth by banks, you must earn a high enough monthly income, such that your TDSR (total debt servicing ratio) does not fall below permissible levels.
    • For foreigners, expats, or non-residents: To apply for a car loan, you must have a local guarantor who is willing and capable of repaying the loan if there is a default.

    Documents Required

    Here are the documents that you must produce while applying for a car loan:

      • A copy of both sides of your NRIC or a copy of your valid passport.
      • In the case of a foreigner or a non-resident, a copy of your passport along with a copy of your employment pass is required that has a validity of at least 2 months at the time of submitting the application.
      • Non-resident borrowers are also required to produce utility bills to serve as proof of address.
      • A copy of your bank statements dating back at least 6 to 12 months.
      • A copy of your latest Income Tax notice of assessment. This notice should date back a minimum of 1 year for salaried borrowers and 2 years for borrowers who are self-employed.
      • Salaried borrowers are also required to provide their latest computerised payslips dating back at least 3 months.
      • A copy of your most recent CPF Contribution History Statement dating back 6 to 12 months.
      • A copy of the sale and purchase agreement of the car.
      • A copy of the vehicle registration or the vehicle log card in case of purchasing a used car.
      • The completed Hire Purchase application form.

    How to Apply for a Car Loan in Singapore

    You can apply for a car loan in the following ways:

    • Apply for the loan online on the lender’s official website and email them your documents.
    • Call the lender’s helpline to enquire and apply for a car loan.
    • Download the application form, fill it, and email it to the bank or financial institution along with the required documents.
    • Submit an enquiry form by entering your personal details. You will hear back from them in a few working days.
    • Visit the nearest branch of the lender along with the required documents and apply for the loan.

    Car Loan EMI Calculator

    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:

    • It helps you estimate your monthly installment within minutes.
    • The calculator will give a detailed break-up of the instalment, including the EMI amount and the amortization details.
    • The tool is free to use and does not require signing up for any service of a kind. It can be accessed either through a desktop or mobile.

    Features and Benefits of Car Loans

    Let us take a look at some of the features and benefits of car loans in Singapore:

    • Financing your car: Car loans give you the additional funds you need to purchase a car. You need to only provide a down payment of 30% to 40% of the car’s open market value (OMV) as the car loans finance up to 70% of the market price of the car.
    • Competitive interest rates: Car loans are affordable and offer lower interest rates than a typical personal loan. Most car loans offer interest rates in the range of 2.75% p.a. to 3.5% p.a. The lowered interest rates coupled with longer tenures make it easier to repay the loan.
    • Flexible tenures:?The average tenure offered for a car loan ranges from 1 year to 7 years with one year being the minimum tenure. Longer tenures can result in lower instalments but will result in you having to pay more interest overall.
    • Repayment options: You can pay the monthly instalments via GIRO, cheques, and auto-debit from a savings account.
    • Requires a collateral: A car loan is a secured loan. Unlike personal loans which require no collateral, car loans require collateral, which in this case, is the car itself which is pledged to the bank. As long as you make payments on time, you will not lose your car.
    • Quick processing: Most banks process your application and disburse the loan amount quickly, provided you have a good credit score and meet the eligibility criteria.

    Things to Remember Before Applying for a Car Loan

    Some factors on the basis of which you must choose a car loan are listed below:

    • Choosing the loan: Before applying for a car loan, you must take into consideration the affordability of the loan. These loans come with long tenures and can be a huge financial responsibility. You must ensure that the loan taken can be repaid with ease and if not, you should consider going in for a smaller loan amount.
    • Compare: One bank might offer lower interest rates, but it doesn’t mean it could be the most affordable one. Fees and charges and late payment penalties can drive up the cost of a loan. Compare thoroughly before taking up a car loan.
    • Car loans are secured loans: When a car loan is taken, the car is put up as collateral. If you do not repay on time, the bank may confiscate the car and put it up for auction to recover their money.
    • Factor in the credit score: You must have your credit score in good standing for the loan to be approved. A poor credit score indicates the lack of ability of the borrower to repay the loan. Seeking other forms of credit such as credit cards or personal loans around the time of applying for a car loan can affect your credit score and make it difficult for the loan to be approved.
    • Early Settlement: Early settlement comes with a penalty that is calculated using the Rule of 78, which is a method used to calculate the interest charged on a loan across the loan repayment period. The penalty charged is usually around 20% of the unpaid interest. It is charged so that banks can make up for administrative costs and commission costs incurred by them.

    FAQs

    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.

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