POSB Car Loan in Singapore

    Owning a car, be it a minivan or a sports car can either be a result of pure necessity, or as a result of fulfilling a long term goal. Regardless of what your reason for purchasing a car may be, it is a serious financial commitment and requires a large sum of cash to purchase. Not everyone is lucky enough to have enough savings lying around to go buy a car, and even if they did, dipping entirely into your savings for the entire cost of the car is not a wise financial move. Here’s where car loans can come to the rescue and with POSB car loans, you’re one step closer to owning your vehicle.

    POSB is one of the oldest banks in Singapore to still be in operation. It was established as the Post Office Savings Bank and is operating as a subsidiary of DBS after DBS acquired it in 1998. The main goal of the bank is to provide low cost yet effective banking solutions. The bank still provides banking products to children, full-time students under 21 years and full-time National servicemen free of cost. Under its consumer banking vertical, POSB offers credit cards, investment options, savings options and loans among others.

    If you are looking for a car loan, POSB with its affordable interest rates and flexible tenures can be your ideal option to finance the purchase of your new car. POSB even offers loans for purchasing used cars.

    Let us go ahead and look at what you can expect from POSB as far as applying for your car loan and the interest rates on your loan are concerned.

    POSB Car Loan Promotion 2017

    • Apply for the POSB Car Loan online at the POSB website and get an interest free period of up to 6 months on your car loan.
    • Interest paid after the period of 6 months is only 2.18% p.a. with an EIR of 4.11% p.a. making it amongst the most affordable car loans available.
    • The 6 months interest will be credited to the borrower’s POSB or DBS loan servicing account 1 month after the loan has been disbursed

    Terms and Conditions: The promotional offer is only valid for car loans with tenures of over two years.

    Types of POSB Car Loans

    There are basically two types of Car Loans that POSB offers:

    • New Car Loan
    • Used Car Loan

    POSB New Car Loan:

    Here are some things you should know about POSB New Car Loan:

    • The POSB New Car Loan as the name suggests is intended only for the purchase of a new car.
    • The maximum loan amount you can get is dependent on the price of the car. POSB will finance a maximum 70% of the entire cost of the vehicle based on the vehicle’s OMV. The loan amount that one can avail is pegged to the Open Market Value of the vehicle.
    • Cars with an OMV less than S$20,000 can get a maximum loan amount of up to 70% of the purchase price of the car.
    • Cars with an OMV greater than S$20,000 can get a maximum loan amount of up to 60% of the purchase price of the car.
    • Tenures for the new car loan can go up to 7 years.
    • The loan offers competitive interest rates which keep your monthly instalments low and affordable throughout your loan tenure.

    POSB Used Car Loan

    Here is what you need to know if you’re applying for a used car loan from POSB:

    • The price of the vehicle and the loan amount is dependent on the vehicle’s Open Market Value.
    • The loan available is dependent on the tenure as well as the age of the car.
    • The loan is only available for used cars less than 10 years old.
    • The loan tenure available is up to 7 years.

    POSB Car Loan Features and Benefits

    Choosing POSB to finance the purchase of your vehicle comes with a host of features and benefits which are as follows:

    • Regardless of whether you’re purchasing a new or used car, POSB offers loans for both types of cars.
    • The tenures for both, new and used car loans is a maximum of 7 years.
    • The interest rates are attractive and are flat rate giving you fixed monthly instalment to pay in ease.
    • The loan offers up to 70% finance of the purchase price of the car.

    POSB Car Loan Interest Rates:

    The car loan interest rates start at an applicable interest rate (AIR) of 2.78% p.a. Borrowers can contact the bank to learn more about the interest rates. Borrowers can also use the car loan calculator available on the POSB website to estimate their monthly instalment amount.

    POSB Car Loan Eligibility Parameters

    In order to apply for a car loan from POSB, the following eligibility parameters need to be met:

    • The car loan applicant has to be over the age of 21 years.
    • The applicant must meet the minimum income criteria set by the bank in order to qualify for both, used and new car loans.
    • The applicant has to be a Singaporean citizen or a Permanent Resident.

    How to apply for the POSB Car Loan?

    You can apply for the POSB car loan by visiting the POSB website and downloading and filling out the online application form. Once you fill out the online application form, you will also have the provision of uploading your supporting documents. Upon successful submission, the bank will begin processing the application, and if all eligibility criteria and credit norms set by the bank are met, the application will be approved.

    Documents to be submitted for POSB Car Loan

    The following are the documents that applicants need to submit in order to initiate their car loan application.

    • Your application form fully completed.
    • Proof of identity – front and back copy of your NRIC.
    • Income documents such as latest payslips, IRA8 form, Income Tax (Notice of Assessment).

    POSB Car Loan Frequently Asked Questions

    1. How much can one borrow in a POSB Car loan?

      A. The loan amount depends on the OMV or open market value of the car. If the OMV is less than or equal to S$20,000, then the maximum loan amount is up to 705 of the purchase price of the car. If the OMV of the car is greater than S$20,000, the maximum loan amount available is 60% of the purchase price of the car.

    2. How is the OMV for a used car calculated?

      A. The open market value (OMV) of a used motor vehicle is adjusted according to the age of the car. This is don’t to determine the corresponding loan-to-value (LTV) ratio permissible. A method of straight-line depreciation is adopted to derive an OMV which in turn is used to determine the LTV ratio.

    3. How does the six month interest free period work?

      A. The interest for the six months is credited to the borrower’s loan servicing account. The amount will be credited within one month from date of loan disbursement.

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