Things You Should Consider Before You Apply for a Car Loan

Image result for things to consider when applying for car loansIt is common knowledge that owning a car in Singapore is more of a luxury and this is perhaps because of the Government Officials early realization that too many vehicles on their thoroughfares will soon result in uncontrollable traffic problems. Limiting the ownership of vehicles in Singapore have proven to be most advantageous for the country, but the fact remains that there are individuals and families here who would still want to have ownership of a brand new or a very good second hand car. Although there are strict regulations when purchasing a car in Singapore, it is still very much possible to own one, but the prohibitive cost of vehicles has pushed would be car owners to file for a bank loan, or more specifically for a car loan to finance the purchase of their dream car.

There are very strict rules to follow before one can purchase a car in Singapore so there is a need to understand the pre-requisites in applying for a car loan in Singapore. First off, purchasing a car in Singapore can be very costly for the buyer because applying for one is almost as difficult as when you are applying for a home mortgage loan.

Car buyers here should realize that in addition to the Open Market Value (OMV) of the car, a prospective car buyer must also pay a tiered Additional Registration Fee that fluctuates to as much as 180% of the OMV. There is also the Certificate of Entitlement or CoE, Goods and Services Tax, Excise Duty, Road Tax and the all important parking Fees that the soon to be car owner would have to pay. Secondly, a car buyer should be aware that the type of loans available for vehicles with an Open Market Value of about 20,000 dollars will be limited to only 60% of the cost while those with more than 20,000 dollars price tags will be capped by only 50% loan amount.

Image result for good pre owned carsThird, the best way to avoid the high cost of purchasing a new car is to opt for a good pre-owned car. Selecting to buy this kind is the better alternative because the purchase will come out cheaper. Aside from the money saved, there will be less waiting time for you to get the necessary approval and documentation for the vehicle and there will there be no more need for CoE bidding. Also, the transfer fees that you would have to pay for the sale will be relatively small.

Fourth, once you’ve decided whether to buy a new or a pre-owned unit, you have to decide to which licensed moneylending company Singapore to file a loan application with. Compare their interest rates and repayment schemes and find out which would best suit your financial status. Fifth, the financing options that you have selected should also be beneficial to your particular credit status. Sixth, choose a financing company that offers the lowest interest rates and finally, make sure that you have done all of your homework relative to buying a new or pre-owned car because this is the only way that you will be able to save money in the end.

How Does a Foreigner Get a Loan

Image result for how does a foreigner get a loanStatistics show that out of 10 individuals working in Singapore today, 6 are citizens of the country, 1 is a permanent resident (or immigrant) and the remaining 3 are usually expats or aliens from a foreign soil. It seems that Singapore is one of the few countries in Southeast, where foreigners are quite attracted to reside or to start a new life in. The main reason for this is the benefits and privileges that Singapore gives her foreign residents.

The Singapore Economic Development Board or SEDB have continued to draw foreigners into the country by giving them almost the same privilege a natural born citizen enjoys and this in turn have encouraged these aliens to contribute to the country’s economic growth. Today these foreign residents enjoy most of the rights and duties of Singaporean Citizens like eligibility for government-sponsored housing, adult national services, and more importantly, access to apply for foreigner loans to any financial institution of the country.

One of the most common loan applications filed by alien residents of Singapore is a home mortgage loan. However, there are some limitations on the loan that is prescribed for foreign residents, but the process and approval waiting time is the same as that of a natural born citizen. One limitation is that foreigners are only allowed to have 70 to 80% leverage from major banks in Singapore but they can acquire a loan of more than 80% of the total cost of the property but this will depend entirely between the agreement reached by the moneylending company Singapore and the borrower. Foreign residents here in Singapore today are given flexible policies when it comes to purchasing properties. For instance, there are properties that carry some restrictions when being sold, but foreigners are given access to these types of properties as long as they can get approval from the national government’s land authority department.

expat loansAny type of loans for alien residents in Singapore is quite easy to apply for and if one qualifies, he or she only needs to submit few key documents such as work permits, national identification card, Salaries and other work related documents. The loan is treated by the lender as just like any other type of financial assistance where an interest is placed on the loan and a repayment term is stipulated for the borrower to follow. One drawback however is that most foreigner loans will have a slightly higher than normal interest rate and this is because of the assumption that most alien residents will not be able to easily offer any form of collateral.

The repayment period for this type of a bank loan is also shorter that standard loans provided to Singaporean citizens. This is usually the case with expats and other types of foreign workers whose stay in the country is a short one. In general, however, the amount of repayment time given to a foreigner for his loan will depend entirely on the amount of money that he or she has borrowed, the less money provided for the loan, the shorter time is required to pay it back.