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Best Car Loans*

Need to finance your vehicle? How to find the best car loan* for you.

Buying a car brings with it a number of decisions, but one of the most important ones is your finance. If you’ve decided to get a car loan it’s important to find the most competitive and suitable product for you. That is, you want to find the best car loan.

This guide will take you through all of the features and costs you need to consider when sorting through your car loan options so you can be confident when making your decision.

What’s the best car loan for me?

The truth? There is no one best car loan. This is because not everyone looking for a car loan is buying the same car, earns the same income or is in the same financial situation. The best car loan really depends on what you need from your loan, what loan you’re eligible for and what will work well for your budget and lifestyle. However, you can find the best car loans for your individual situation by comparing your options and considering your own needs, which we’ll show you how to do in the next section:

Quick guide to how car loans work

Car loans work much in the same way as other personal loans, except that the vehicle you’re purchasing is used as collateral for the loan. This is why car loans come with much more competitive rates – generally between 2-3% p.a.

A car loan can be offered as a dealership finance loan or as a standard car loan from a bank, financial company or standalone lender. According to MAS regulations, you can borrow up to 60% (for cars with OMVs of more than $20,000) and 70% (for cars with OMVs of less than $20,000) with a car loan and loan terms can extend up to 7 years. The type of loan you are eligible for will depend on whether the car is new or used, how much the car is worth as well as your own credit history and financial situation.

How do you find the best car loan?

Here are a few things to keep in mind when you’re comparing your car loan options above – this will help you settle for the best car loan for your needs.

  • How much does the loan cost? You need to consider the interest rate and loan tenure when asking this question. Car loans in Singapore are generally calculated on a ‘fixed’ interest rate, meaning that your monthly interest and instalments are constant throughout the entire loan tenure.
  • Are the repayments flexible? See if you will be able to repay your car loan early without penalty or if you will be able to make additional repayments without being charged a fee.
  • What are your loan terms? Car loan terms are generally your choice of between 1 and 7 years. The length of time you take out a loan will affect your loan repayments and therefore the loan affordability, so make sure you consider this.
  • Is your car eligible? Can you actually finance the car you want with this loan? Some lenders have restrictions on the age of the vehicle or the type of vehicle, so ensure you’ll be able to purchase the car you want before you apply.
  • How much can you borrow? The loan amount you are offered by the lender will depend on a couple of factors, such as your credit history, financial situation and the cost of the car. According to MAS regulations at the time of writing (5 April 2018), you can borrow up to 60% (for cars with OMVs of more than $20,000) and 70% (for cars with OMVs of less than $20,000) with a car loan.
  • What is the type of loan?
    Take note of the specific type of car loan that you are looking at. This can be a new or used car loan, in-house financing or balloon scheme financing. The category type your loan falls under will help you compare it to other similar loans.

Five tips to get the best car loan

  • Consider a newer vehicle. New car loans come with lower interest rates than used car loans because the lender is taking on less of a risk.
  • Quotes without credit enquiries. While credit enquiries are not always a bad thing to have listed on your file, too many enquiries can have a negative impact on your credit score. If you’re submitting an enquiry for a car loan rate estimate, make sure no hard credit checks are listed on your file. If a credit check is required, don’t make enquiries with too many separate lenders.
  • Compare your options before you apply. This will show you which lender has the lowest rate car loans available. If you don’t want to sort through your options yourself, you can consider using the services of a car finance broker to help you find the best car loan options for your specific situation. Click on the “speak to a broker” tab above the table.

Have you weighed up the benefits and drawbacks of car loans?

  • There are various lenders in Singapore, so you have more options to choose from
  • Set fees and repayments help you to budget your repayments with fixed rates
  • Depending on the lender, your car loan might have various restrictions and penalties on early repayment
  • If the car loan is a balloon scheme, then you may find that you are paying much more overall

Found the best car loan for your situation? Here’s what you’ll need to apply

The type of information you will need to provide usually depends on the lender and the type of loan you have chosen. You will generally need to provide:

  • NRIC or Passport
  • Details of your finances including credit, debt and assets
  • Proof of your income
  • Vehicle registration card
  • Application for Hire Purchase
  • Details about the car (if you’ve found it) including make, model and year

Always check with your lender before you submit your application to avoid a loan rejection.

Ready to apply?

To apply for a car loan, simply use the comparison table at the top of this page to compare your options. Once you have found the best car loan that meets your needs, you can follow the secure link to the lender’s online application form. The eligibility criteria differ between lenders, but you will most likely need to be over the age of 21 to qualify.

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