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How to get a car loan
Want to know how to get on the road? Use the quick guide below to find finance for your car.
A car is an expensive purchase, and considering the fact that car prices in Singapore are the highest in the world, it is no surprise that majority of the buyers require a car loan if they wish to own a set of wheels. Whether you’re buying a new or used vehicle through a private sale or from a dealership, there are a variety of car loans you can consider. Read through the steps below to find out what it takes to secure financing for your new car.
Step 1: Choose your vehicle or find pre-approval
Finding your vehicle is an important first step. Whether you’re purchasing from a private sale or a dealership, have a look online so you get an understanding of what the different models cost and how much you’ll need to borrow. This will make it easier to compare lenders and selecting your loan terms when you apply.
If you want to go shopping for your car after you’ve secured your finance, you have the option of a pre-approved car loan. If time is of the essence, select a lender that provides quick approvals.
Step 2: Compare your loan options
Once you know what type of car you want to buy and how much you need to borrow, it’s time to find a lender that can help you finance it. For example, if you’re want to purchase a used car you can read our guide here, or if you want to purchase a new vehicle you more details here. You also have the option of using a car broker to find a lender for you based on your needs and financial situation.
When comparing, it’s important to look for a lender that will let you apply for your loan amount (check for set minimum and maximum amounts); that there are no restrictions that make your car ineligible for the loan; that the interest rate is competitive; and that you are aware of all the fees and features of the loan. Reading the review on finder Singapore and the lender’s website before applying is very important.
Step 3: Calculate your loan repayments
Is your loan competitive? More simply, is the loan affordable on your budget? You can work this out by using a car loan repayment calculator. Input your loan term, loan amount and interest rate and some other details and you will see your ongoing repayments. You can adjust key details, such as the loan term, to see if you can make your loan terms more affordable.
Step 4: Submit your application
Applying for a car loan doesn’t take long, but it can seem like a daunting process. An important aspect to remember is not to submit too many applications at once; every application you make will be listed on your credit file and making too many can damage your credit score.
Before you start filling out any applications, make sure you meet all the minimum eligibility criteria set by the lender. This is listed on every finder Singapore review page and usually at the start of every online application. If you are uncertain about any of the criteria, it’s best to contact the lender directly.
Once you have confirmed that you meet the criteria, gather the information and documents and start the application. You’ll generally need your personal, financial and employment details as well as details of the car you’re purchasing. If you don’t have all these details on hand yet, you can generally save your application to complete it later.
Step 5: Receive your funds
You’ll normally find out if you’ve been approved quite quickly, normally within a few minutes for conditional approval. Once you are fully approved, you can receive your funds as soon as the next business day with some lenders. These funds are transferred differently depending on the lender, but generally, it will be a direct transfer to your bank account. It may also be through a cheque or by paying a third-party directly. Check with the lender if you prefer the funds to be paid in a certain way.
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