Perhaps you are a first time car buyer in Singapore who does not know anything about car loan. This article will help you to be more confident in dealing with banks and finance companies and be aware of the car costs, loan amounts and terms.
Below are the 10 things that you need to do before you apply for a car loan in Singapore. We assure you that you’ll achieve a very smooth and hassle-free loan application process once you have done the following:
1.) Do some research and read some reviews about the banks or local auto finance companies in Singapore. It is always best to know first on who really are the best institutes that can offer you the best auto loan rates and terms. Make sure that you understand on what is considered to be a good car loan deal.
2.) Do the math and determine the amount that you want to loan. Make use of a car loan calculator. The internet offers a dime a dozen of free online car loan calculators. Through this, you’ll be able to get a good sense on how much your monthly payment will be.
Remember to do all the necessary calculations – your expenses, budget per day/month, monthly income, etc so you can make sure that you are capable of paying your monthly car loan instalments.
3.) Decide on the loan tenure. If you want a lower monthly instalment, you can ought to take a longer term, about 7-10 years. If you prefer to pay less and save more, go for a shorter term, about 5-6 years.
4.) Search for car loan interest rates. What is lowest possible interest rate that you can get? What’s the average interest rate that one can get?
5.) Do some non-obligatory car loan quotation requests. Most of the bank and finance companies in Singapore offer free car loan quotations online. Take advantage of these FREE services to know roughly how much you can loan and on what’s the interest rate like. Compare quotations to get a more accurate estimate on your loan amount and interest rate eligibility based on your current credit status.
6.) Get a car that you can afford. Do not choose a car that will exhaust your monthly income. Choose something that is reliable and not too expensive. A good way to do car price comparison in Singapore is to visit sgCarMart, Oneshift, STcars.sg and SVTA. These car portals usually offer free online comparison tools. Once you have come up with a list, go through with them and pick the car that can meet all your car and financial requirements.
7.) Assess your financial stability. Is your current credit status good? But make sure that you also consider sudden financial setbacks. Can you still afford to pay your monthly car payments if you suddenly experienced a serious financial crisis? Do you have enough savings that can cover up your expenses and monthly instalments? Assessing your financial stability will give you an advantage as it can help you avoid unpleasant surprises.
8.) Calculate other car expenses. Once you have decided on the car that you want to buy, make sure that you are prepared for the transfer fee & first instalment. Other costs to take note are car insurance, petrol, maintenance, road tax, ERP and parking.
9.) Tax & registration. If you are buying a new car, these are the taxes that will be require to pay. Goods & Services Tax (GST), Registration Fee, Additional Registration Fee, Excise Duty, Road Tax & COE. Not to be intimidated by all these taxes, all new car dealers will have to sell you base on the price inclusive of all these taxes otherwise stated. If you are buying a used car, all these cost are already with the car except for the road tax which you have to pay yearly or every 6 month.
10.) If you did Steps 1 and 5, you most likely have the idea on which bank or local auto finance company to engage with. Pick at least 2 of the best in terms of interest rates and longer car repayment options. Local auto finance companies would actually offer you the same rates that banks can offer, the difference is the service. Normally, in Singapore, an auto finance company will do all the loan submission and processing, vehicle transfer, legal paperworks and insurance quotation for you for FREE. If this is the case, you may want to consider them as they can free you from all the stress of paperworks.
