Ultimate Guide for you to Apply for a Car Loan
Car Loans | Loansby Priyadarshini 21 September 2020
Everyone wants to buy a car to call their own. Despite Singapore being an expensive city and the skyrocketing prices of cars, Singaporeans still would like to indulge. While most of us do not have thousand grand laying around, the next best option is to go for a car loan. Taking up a car loan in Singapore is common and if you too want to buy a car then, read below to understand all that it entails.
Well, the first thing is that there are many financing sources, banks, car dealers, etc. Car dealers are waiting to hypnotize you with their sweet talk, but beware of the trap and look for safer options to borrow funds. You need to weigh in all your option before you jump the gun!
What makes Cars Expensive?
Well, beginning with GST (Goods and Services Tax), Excise duty, and multiple other components shoot up car prices. These are factors that you cannot evade, even if you dislike. COE (Certificate of Entitlement), Open Market Value, PARF (Preferential Additional Registration Fee), and Additional Registration Fee (ARF) are some of the mandatory costs you have to bear. Also, it is important to figure out the exact breakdown of costs so that when you apply for a car loan you have a correct estimate.
How much Loan will I get?
The amount of loan you can borrow will depend on the car’s Open Market Value, as well as your monthly income, credit score, and financial commitments. If you have a home loan, big credit card bills, and other monthly installments running then you may not be able to get the maximum loan quantum. So, before you apply for a car loan, consult with experts, and work around some massive calculations.
How long will my Loan Tenure be?
So, your loan tenure basically means the longer the tenure the more interest you will have to pay. Usually, a car loan tenure is for 7 years, but everything will depend on the blueprint you have for loan repayment. You need to make sure you have enough funds to pay your monthly installments and have a separate back-up for unprecedented situations.
There are many car financing options in Singapore to choose from. You can apply for a car loan directly with banks, or bank loans through a car dealer, or choose to go with a car dealer’s in-house financing option. It might get tough for you to resist the lucrative deals your car dealer will offer you, however, we recommend you not to get carried away and make a wrong financial decision. Your car dealer can also offer you a fuss-free process of applying for bank loans through them. You can take this option as you’ll be free of all the documentation and receive some freebies as well. Well, everything is not for free though because by doing this your car dealer will receive a commission from the bank for signing you up.
Lastly, the option to directly approach banks for a car loan is always open and you will get a fairer scope to select the interest rates and receive a loan upon your merit. Apart from the loan amount, research and find out if any hidden costs may apply. These could be some kind of processing fee, fees for unpaid interest, and early settlement fees, etc.
All set to apply for a Car Loan?
If you decide to go through your car dealer then, most of the documentation will be taken care of and your dealer will guide you through the entire process. If you are applying for a car loan directly with a bank of your choice then, first you need to submit an online application. Alternatively, you can also choose to book an appointment with a bank executive in person. A few common documents you will require are proof of income, your employment details, and proof of existing financial commitments. That’s all & you are ready to Jet Set Go!
Need more information & guidance? Get in touch with us & our experts will help you.