Finally buying your first ride?
Unless you are born with a silver spoon on your mouth, you will definitely need a car loan for your set of wheels.
With too many car loans offered in the city-state, how will you choose the one you’ll need and want?
Before you get too excited here are some things you need to consider when getting a car loan:
- How much money to pay as downpayment
Of course, we all know that the car loan will not cover 100% of your car’s value. You will need some cash to pay as your downpayment. When buying a car, you need to make sure that you have enough savings to cover the downpayment.
With POSB, the downpayment will depend on the purchase price of the vehicle. If the open market value of the car is less than S$20,000, then POSB will only cover up to 70% of the purchase price. If you are eyeing a car with open market value higher than S$20,000, then POSB will only lend up to 60% of its purchase price.
If your savings is less than the required downpayment, then you have to wait a bit more until you have saved enough to buy the car. Or you have to find another car loan.
- Length of the loan term
With the revised policies on the loan term, you’ll be happy to know that car loans can now be stretched up to seven (7) years. POSB’s car loan tenor from one (1) year to seven (7) years.
While it is quite tempting that you’ll get the longest term, you need to make a wise decision. A car loan is a serious financial responsibility and the longer term you choose, the longer you have to pay for it. Naturally, you’ll be paying more the longer term you have.
- Car Loan interest rates
Car loans interest rates differ. While this is not the only thing that you must consider, most Singaporean compare loans based on interest rates. The interest rate is 2.18% p.a. for car loans signed up online. This promotion is only until 31 May 2017. Then, the interest rate will go back to 2.78% p.a. without promotional offer.
- Cost of deferred payments
There are car loans which offer differed payments for six months at the most. With POSB car loan, you can have it interest–free for the first six months if you choose a loan tenure longer than two years. After the initial six months, you will be charged with interest rate of 2.18% p.a.
- Car Loan Calculator
Loan calculators are helpful for loan applicants to have an idea on how much they can borrow. They can also see how much they have to pay every month. This way the borrowers can have an idea if they can handle the loan repayments without sacrificing their needs.
POSB Car Loan Calculator
POSB has two types of car loans. One car loan calculator is to know the maximum amount you can borrow. This gives you an idea on how much cash you have to prepare as a downpayment. Also if the loan amount is lower than you need, then you can consider other loans.
The other car loan calculator will give you an idea on how much you need to pay as your monthly instalments. With this, you can easily have an idea if you can handle the estimated monthly repayments.
POSB, just like most of the banks, offer car loans to both new and old clients. But while it is a choice for some people you might know, will this option be the right one for you?
Choosing the best car loan it not an easy task. You need to consider a lot of things, but you must not lose focus on the car loan’s purpose.
Car loans are supposed to help you purchase a vehicle at ease through monthly instalments. You have to make sure that you can handle your repayments while juggling your other financial responsibilities. While shopping for a car could be fun, looking for the best car loan is tedious. However, they are both essential.
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