Owning your first car can be a life-changing event that you will always remember. There are no words to describe the feeling you get when you first get in and drive off!
It should come as no surprise that a large number of Singaporeans aspire to possess their ideal vehicle since it will undoubtedly change their way of life. With a car loan from a leading bank, you can have the car that you want. You can buy a new car or a used one with a car loan Singapore banks offer at an affordable repayment schedule.
The available car loan options will have an effect on the car you choose to purchase. When buying a new car, you do not have many financing options and approved dealers in Singapore generally help you get only bank loans.
In Singapore, the OMV of an automobile determines the maximum loan amount that may be obtained for its purchase. You can have a maximum finance of 70% of the purchase price of cars with an OMV of up to SGD20,000.
Meanwhile, the maximum amount is restricted to 60% of the purchase price for cars with an OMV over SGD20,000. This implies that if you want to purchase a new car, you will need to make a down payment of SGD25,000 or more.
Some Benefits of Getting a Car Loan from a Bank
Bank loans for cars are available at affordable rates. For ICE automobiles, bank loans typically begin at 2.78% per year or less. There are also used car loans available, and depending on the bank and any ongoing promotions, the interest rate may be lower or higher than for new cars.
1. Tenure and Interest Rate
The loan tenure and interest rate are the most important aspects to consider when choosing a loan. Currently, bank loans with terms ranging from one to seven years and an interest rate as low as 2.70% or 2.78% are better options. Nevertheless, car loans in Singapore come with a flat interest rate and not a rest rate.
Unlike in-house solutions, which offer you a variety of schemes to pick from along with complex terms and conditions and charges, bank loans for cars are typically relatively simple.
2. Convenience and Affordability
You can choose to get a car loan from your bank or any other bank by applying through the bank’s website or visiting the bank’s branch in person.
It will help you choose from a range of loan options and lenders, which will enable you to evaluate your options and determine which bank offers the best terms and prices. You can also have your car dealer help you apply for a bank loan by managing the paperwork. This may limit your options to a few banks with whom the dealer has a business relationship.
When it comes to getting financing for buying a used car, you have to consider the following points:
- Only cars that are no older than ten years from the date of registration are eligible for loans.
- It is advisable to wait until approval of the loan and then transfer the vehicle to your name.
- When assessing the appropriate loan-to-value (LTV) ratio permitted by the financing regulations, the used motor vehicle’s open market value based on its age is considered. A depreciation on the original OMV’s value is calculated over a period of ten years using a straight-line method to determine the proper LTV ratio and applicable OMV.
Bank loans, if qualified, would seem to be the best choice in Singapore because they ultimately result in spending the lowest amount.