Looking for a car loan but don’t know how to qualify for one? Don’t worry. We are here to give you a complete guide on how to be eligible for a car loan and return home with your dream car. Qualifying for a car loan Singapore is accessible in Singapore due to the law’s liberty in the year 2016. Getting a car loan is not at all problematic.
Singapore comes in the list of the most expensive cities in the world. It is a developed nation with a high cost of living. The price of a car in the country is equal to the one-third value of a house. The reason for being a developed country, almost every individual possesses a vehicle in the region.
Limit On Car Loan in Singapore
Every country has different rules and regulations formed on its loan policy. In Singapore, the restrictions on loan liberated in the year 2016. As an individual, you can avail of credit of up to 70% if the price of your car is $20,000 or less. If your car’s price is about $20,000, you can avail of 60% of the loan on the principal amount.
Rate Of Interest
The rate of interest differs from agency to agency and the type of car you are looking for. In order to get the best package, you must do considerable research. The rate of interest offered by banks is less compared to a car dealing agency. But one disadvantage of taking a loan from a bank is the process is long and time-consuming. Other dealers give loans to acquire a vehicle. But the rate of interest charged by these dealers is quite high compared to any agency or bank. However, the clients prefer opting for the package of a car dealer over banks. The main reason for this is due to the fast service provided by the dealers to the client. The dealers complete the paperwork in 2 days and make sure you get your dream car as soon as possible.
The rate of interest on cars differs from one another. If you are going for a new vehicle, the rate of interest will vary between 1.99% – 2.78%. If you are going with an old car, the rate of interest will vary between 2.78% – 2.98%.
Eligibility And Criteria To Meet Before Taking A Loan
There are certain conditions and criteria imposed on people by the law for availing any loan. The individual looking for a car loan has to be above 21 years. Besides this, there are other conditions you are required to check before going for a loan.
- CREDIT SCORE: Your credit plays a significant role if you have decided to take the loan from the bank. The bank will not so easily grant you 70% of the total amount. They will first make a background check of your credit score. If you have a poor credit score, there are chances that the bank will not grant you the full amount of loan required. Credit scores tell your past record of the loan. If you have a good credit score, then there is no doubt of you getting the loan without any hassle.
- HOME LOAN: Make sure you give your first priority to a home loan than any other. When you apply for a home loan, your credit scores are checked first. Whether you take a loan from a bank or any other financial institution, they will first estimate the credit score and then grant you a loan. You can put up to 60% of your earnings in paying the mortgage. So while going for a car loan, make sure you prioritize your home loan and also check for credit scores.
- GET THE BEST DEAL OUT: There are a lot of agencies in the market that provide loans to people. The interest rate differs from institution to institution. Some agencies charge a lot of interest from people for no reason. And there are other agencies like Capitall who not only provide Capitall business loan but also car loans. In order to get the best deal make sure you invest some time in doing research. By doing this, you will find out the best companies charging the lowest possible interest rate from the clients.
- INCOME STABILITY: It is often seen that people opt for loans and fail to repay the amount back to the financial institutions. This results in their personal property getting in the hands of the institution. To avoid such circumstances, make sure you have various sources of income to pay back the loan. Before signing any deal, think about other alternatives for payment. The bank also asks you about other sources of income. So make sure you go with complete information and details before getting into a contract.
Things To Avoid Before Taking A Car Loan
- In the market, there are a lot of agencies sitting to provide you with your desired loan. But these agencies charge a higher rate of interest than usual, which goes beyond the limits of the law. Thus make sure you do not land up in something like this.
- There are a lot of agencies involved in malpractices. The agencies take your property papers and commit forgery. By doing this, they withhold the property of the client without his knowledge. This it is important for you as a client to make the background check-up of the agency before landing in some fraudulent activity.
- As a client, make sure you have enough income sources to pay back the loan to the financial institution. If you fail to pay back the loan, the institution has the full power to confiscate your property without your permission. This is a legal action taken by them when the client fails to fulfill the promise or agreement.
- If you are acquiring a loan to purchase a second-hand car, then make sure you do not invest your money in the trash. Many people end up buying low-quality second-hand cars and paying a tremendous amount of loans. Thus make sure you invest in the right vehicle.