Looking for a car loan?
DBS offers car loans to Singapore Citizens, Permanent Residents or foreigners who are at least 21 years old. You must have a minimum monthly income of S$2,000 to S$4,000.
However, before you apply for DBS car loan (or any loan) be sure to make a self-assessment. Banks are strict when it comes to loans. They will evaluate your creditworthiness by looking into your credit report.
So even though you meet the eligibility, if you have a history of payment delinquency, then you might get declined. What you should do is to ask the credit bureau for a copy of your credit history. If this is the first time you are applying for a DBS loan, then you can get it for free.
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DBS Car Loan Features
DBS, just like most banks in Singapore, increased its loan term from 5 years to 7 years. It might be tempting to get the longest loan term as it has lower monthly amortization. However, you will end up paying more than you should. It is better to know how much you want to borrow and for how long. Use a loan calculator to help you see the possible amount of your monthly amortization.
The loan amount you can borrow will depend on the car unit’s Open Market Value. This means that if you want to purchase a unit less than S$20,000, then you can borrow up to 70% of the valuation price or purchase price. If the two has different value, DBS will base the loan amount on whichever is lower.
If the unit costs more than S$20,000, then you can borrow 60% of its valuation price or purchase price.
Another feature is that DBS also finances used cars up to 70% of its appraised value, though it still depends on the car’s age. It is best not to change the ownership yet if you haven’t got any loan approval. The used car must not be older than 10 years. Since the value of the car depreciates, the older the car, the lower amount you might be allowed to borrow.
DBS Car Loan Calculator
This indicates the monthly installment, loanable amount and the estimated purchase price based on your monthly income, chosen loan period and existing financial commitment.
This is useful when you want to know how much you can handle should you decide to finally get a car. Most people get over excited that they only consider the interest rate and loan term, however you will not feel the impact of a car loan unless you see the realistic figure you have to pay every month.
What happens in case you default?
Of course, most of us know that you will lose your car. However, the bank repossessing your car is just one of the consequences of defaulting. You will be charged with additional penalty fees for your delayed payments. Failure to settle the loan in a week means your car will be put on sale. If the amount of money from the sold car is still not enough to settle the ballooning loan amount, you are still accountable for it.
And much worst is the impact it will do to your credit score. A car loan is a vital loan, and a history of a default car loan will not look good in your records. Even if you get another chance to buy a car with a loan, you will be offered with a very high interest rate.
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