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Car loans for temporary residents in Singapore

Don't deprive yourself of the convenience of having your own car in Singapore.

Although Singapore is a small country with a reliable network of public transport options, you may still prefer to have your own car for the added convenience. While it is commonly known that loans are less accessible to foreigners, getting a car loan in Singapore for foreign buyers is not as hard as it seems. Most banks and finance companies in Singapore are willing to offer auto financing to temporary residents as long as they meet the eligibility criteria and have a good credit standing.

Read on to find out how to apply for a car loan as a temporary resident in Singapore, and how to maximise your chances of success.

How does a car loan for a temporary resident work?

A car loan for a temporary resident is essentially the same as any other car loan or personal loan, except that lenders will impose additional stringent eligibility criteria.

Banks or other lenders will lend you the amount of money needed to purchase a car, and you will enter into a contract to make repayments on the principal amount and the interest at regular periods over a set number of years. Regardless of your status in Singapore, the lender will impose certain eligibility requirements before approving the loan.

As a temporary resident, additional strict lending criteria and other considerations will apply, including:

  • Loan term. While a typical loan term for a car loan is five to seven years, a lender will examine your work permit to ensure that it is valid for at least one year and that you will stay in Singapore for a period long enough to pay off the borrowed amount. Note that lenders will only consider your current visa and will not rely on pending visa applications or extensions, no matter how likely their success.
  • Visa type. Some lenders will only extend credit to temporary residents holding certain types of visas. People with temporary work visas may face lower chances of approval than one with a longer work visa and a path to permanent residency.
  • Credit history. For Singaporean citizens, lenders look at an applicant’s credit history when considering a car loan application. Temporary residents typically have little or no credit history in Singapore, and Singapore lenders do not consider overseas credit history. For this reason, lenders will place more emphasis on an applicant’s deposit, income and employment status.
  • Visa breaches. Many visas have strict limitations on the number of jobs that can be held or the number of hours of employment worked each week. While it is important to maximise your income before applying for a car loan, lenders will not lend to anyone if they breach their visa conditions.

How do I know if I am eligible for a car loan?

The lending criteria for a car loan for foreigners will vary between lenders. As always, it is important to consider an individual lender’s criteria before applying.

As with all car loans and personal loans, different lenders will have different requirements in relation to income, employment history, loan terms, deposits and lending amounts aside from MAS regulations. Also of particular significance to temporary residents is that some lenders will not offer a car loan to temporary residents at all, while others will only consider temporary residents holding certain visas. Additionally, lenders will have different criteria regarding how long you have been in Singapore, how long you intend to stay in Singapore and your employment stability.

Examples of eligibility criteria and required documents for temporary residents include:

  • DBS. Foreigners are required to submit their income and identity documents along with a passport copy and Work Permit, and must have a monthly income of at least $4,000.
  • OCBC Bank. Foreigners must meet all eligibility criteria (check directly with the bank) and submit their Work Permit.
  • Maybank. Foreigners with Employment Pass must appoint a local guarantor.
  • Hong Leong Finance. Foreigners will need to submit a valid Work Permit, Employment Pass, latest payslips and a copy of their passport, with a minimum two years’ work experience in Singapore.
  • Sing Investments and Finance. Employment Pass copy with a validity of six months before expiry.
  • Standard Chartered Bank. Valid Employment Pass, required address and income proof.
  • UOB. Foreigners with Employment Pass must appoint a local guarantor and provide all relevant documents such as employer letter and Employment Pass. Guarantors are also required to submit proof of identity and income documents.

How can I increase my chances of being accepted?

Car loans for temporary residents are considered a high-risk endeavour for lenders. Once you have satisfied the eligibility requirements you can improve your chances of being accepted by considering the following factors:

  • Cash deposit. The greater the deposit you can offer, the greater your chances of success.
  • Proven savings. If you can show that your cash deposit is a result of your savings efforts while working in Singapore, this will be more favourable to lenders than if your deposit was a gift.
  • Income level. Income of $50,000 per annum or higher will put you in a good position when applying for a car loan.
  • Regular income. Lenders need to be satisfied that your employment is stable and your income is regular. In some cases, lower regular income will be more favourable than intermittent or seasonal income, even if it is higher.
  • Guarantor. If you can find someone who is prepared to guarantee your loan – to agree to be responsible for the loan should you default on the repayments – this is favourable to lenders.
  • Singapore bank account. Most lenders will want to see that you have a Singapore bank account into which your income is deposited. Be prepared to provide bank statements for at least the last three months.

How do I submit my application?

Most lenders allow applications for car loans to be completed online, making it a simple and easy process. On the other hand, since there are more stringent requirements for temporary residents to obtain finance to purchase a car than for Singapore citizens or permanent residents, an online application is not always a good idea.

Every time an application for credit is made, this is noted on your credit history. Making too many applications within a short period of time can negatively affect your credit history – and this is particularly significant for temporary residents who may have little to no existing credit history in Singapore.

It can be a good idea to do the groundwork first to work out which lender could be the best choice based on your circumstances. Then, make an appointment to speak with a car loan officer at your chosen bank or financial institution.

Lenders do have a certain amount of leeway when it comes to deciding whether to extend credit to a temporary resident. For this reason, an in-person appointment will give you the opportunity to state your case and show that you are a good candidate for car finance – something that is not possible with an online application.

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