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How Car Loans In Singapore Work

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It’s been your lifelong dream to own a car. Ever since you left college and started employment, your goal has always been to own a car. However, you feel as if it will take ages before you save enough money to buy that dream car. What are your options? You guessed it right. A car loan.

Yes, if you don’t have enough money to buy that dream car in Singapore, you can always opt for a car loan in Singapore. The reality is, the majority of Singaporeans find the whole car loan application process a little challenging. They have to look for the perfect lender from a pool of hundreds and if that is not enough, grapple with complicated calculations relating to interest rates and total repayable amount.

This post serves to enlighten you on how car loans in Singapore work and provides you with valuable information to help you make an informed decision.

What Car Financing Options Are Available In Singapore?

Before you even apply for a car loan in Singapore, you need to reckon that there are two main types of car financing in Singapore.

  • Bank loans (direct lending)
  • Car dealer financing

Direct lending entails getting car finance from a bank of your choice. Of course, different lenders have different terms and conditions as well as offers when it comes to car financing in Singapore. You must take your time to compare and contrast and go for a bank (lender) whose terms and conditions are favorable. However, you can always save yourself all the stress by having Lendela do this for you hassle-free.

Car dealer financing on the other hand entails the car dealer selling a car to you on hire purchase which tends to be a little more expensive. This option is preferred by customers who have a poor credit rating and who can’t secure direct bank lending. Usually, you pay a certain deposit and promise to repay the balance within an agreed period. The downside, other than being a little more expensive, is the risk of having your car repossessed by your car dealer if you fail to service monthly installment payments.

What Should You Keep In Mind When Applying For A Car Loan In Singapore?

You are familiar with the two main car financing options in Singapore. Chances are that you already have made up your mind on which car financing option best suits you. But is that enough? No! There are other things that you need to keep in mind. What are these?

  • Interest Rates

The rule of thumb is, always go for a lender that offers affordable interest rates. Remember the interest rate affects the total repayable amount. Don’t be in a haste. Take your time, compare different lenders and if you find it a little challenging, Lendela will always be at your beck and call and make this process as hassle-free as possible.

  • Credit Score

This relates to how credit-worthy you are. Lenders in Singapore always treat individuals with a poor credit rating as high risk. In other words, they deem individuals with a low credit score as being more prone to defaults as compared to those with a good credit rating. In simple terms, the higher your credit score, the lower your interest rates for the loan.

  • Repayment Ability

Lenders want to be sure that you will be able to comfortably make monthly payments without straining your finances. As such, it’s important that you critically take a look at your income, and only go for car financing if your income is sufficient enough to make car repayments without straining yourself financially. A car loan should not disrupt your life. Lenders are also more than willing to approve your loan if you provide proof of being able to repay it without major disruptions to your life.

Let Lendela Make Your Car Loan In Singapore Application Process Seamless

Applying for a car loan can be a tad challenging. From identifying different lenders to comparing interest rates, the process can be quite tedious especially for a first-time borrower. This is where Lendela endeavors to make your experience hassle-free.

All you have to do is approach Lendela to help you with the car loan application, sit back, and let them do what they do best: linking you up with the best lenders in the market. Once you make an application and provide the required details, Lendela will identify the best car loan lenders in Singapore, and all you have to do is select one from the shortlisted, and you are good to go!

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