Are you planning to get a car on a loan? Don’t worry; we are here to help you with every step you need to know before taking a loan. Owning a car in Singapore is quite expensive. The price of a single is equal to one-third of the rate of a flat. Singapore is an expensive country, well developed with a high cost of living. Not everyone can afford to live in the region.
The natives of the place are quite well to do. Even a middle-class person can afford to buy a car. This is possible due to the liberal policies of the government on loan facilities. The policy of 2016 liberated the criteria of loan takers. A person above the age of 21 can opt to go for a loan. He has also to fulfill other standards of the financial institution from where he is acquiring the loan.
Interest On Car Loan
The interest rate for a new car and an old car differ from one another. Some people look forward to buying a new car, and the rest look forward to buying an old car. The decision is based on their financial status and also the capability to repay the loan back. As an individual, every person first checks his pocket, whether he is in the state to make the payment of such a considerable amount. Based on the capability of paying the loan and financial stability, a person decides whether he wants to go for a new car or an old car.
The ones who decide to go for a new car have to pay the interest rate between 1.99% to 2.78%. The interest rate depends on the loan you acquire from the financial institution and your credit scores. The car loan interest for an old car ranges between two points, 78 % to 2.98 %. The interest rate depends on the quality of the car you are opting for and the amount you are taking. As an individual, your first duty is to decide on the type of car you want to buy. Once you have chosen, you will get an idea about how much interest rate you will be paying on the installment amount. The financial institution will estimate the actual price, but this process will give you an idea of your extra expense on the car.
Restrictions ON CAR LOAN
No financial institution blindly give the loan to its client. The institutions have specific eligibility and criteria that have to be met by the loan seeker. As an individual, you need to possess the legal ID of your identity to fit into the eligibility box. The institution cannot grant you the loan if you do not own any verification IDs to prove yourself the citizen of any country. This is done by the institution to avoid giving loans to criminals and other fraudsters.
The financial institution can provide you loan up to 70% of the total value of the car you desire to purchase. The credit is granted on the open market value (OMV) of a vehicle. If the automobile is $20000 or below that, then the financial institution will give you a loan of up to 70% on the automobile’s open market value. If the automobile’s price is above $20000, then the institution will provide you with 60% of the loan on the OMV of the car. This is due to the restrictions imposed on the financial institution by the authority.
The financial institution is not in the position to grant you 100% of the loan on the total value of the car. This is mainly done to avoid malpractice. A lot of fraudsters acquired the loan and vanished from the planet. Due to this, the authorities have imposed strict restrictions on loan criteria. You are required to give as many legal documents, property papers, and income statements to the financial institution before acquiring any loan. As the final authority, they will first do a background check-up of your history before granting you a loan.
Interest Rates Of Banks In Singapore
There are a lot of financial institutions available in the market to provide you with your desired loan. But before going to any financial institution or planning to take up the loan, it is essential for you as an individual to do in-depth research on the interest rates offered by different banks. To get the best and the lowest interest rate, make sure you make a list of the banks’ standards and go with the best one. Capitall is considered as one of the best options available in the region. Below mentioned are few banks and the interest rate you can go through in order to do in-depth research before taking up a loan.
- DBS: This bank is considered as the top option by many loan seekers. Being the top in the region, the bank charges 2.28 % of interest on a car loan. Whether the car is a new car or an old car, the interest rate will remain the same. This is the unique feature of this bank. It provides loans starting from $10,000 ranging within a period of 1 to 7 years.
- UCBC: The services provided by this bank are similar to DBS. But this bank charges a different rate of interest for a used car and old car. If you’re going for a used car, the price of interest charged will be 2.78%. If you are going for an old car, the interest rate will be 0.2 % more, i.e., 2.98%. The minimum amount you can take a loan from this bank is $5000.
- MAYBANK: There a lot of restrictions imposed by my bank on a loan seeker. You cannot buy a car if it doesn’t belong to the same region or if it is on a rental basis. The bank charges 3.25 % of the interest rate on loan granted. The tenure of the loan can be up to five years maximum.