Having your own personal car is no longer a luxury. It has become a necessity. Besides sparing you from the woes of public commute in the busy metropolis, your car can also help to relieve stress. For all the perils and pitfalls of today’s world, there are still pleasures that you can enjoy: “drive and dine” adventures, road trips with the family, and other such outings.
But, for many Singaporeans, owning a car may still be out of reach. Finances is the biggest factor to consider when buying a car. Car loans are now becoming increasingly popular. However, due to a lack of knowledge on car financing and loans in Singapore, many get stuck in the loop of interest and repayments.
We hence save you the hassle with this guide. Here is all you need to know about applying for a car loan in Singapore.
How Much Can I Borrow For My Car Loan?
Calculating the amount you can borrow for your car loan is not as simple as it seems because it involves the Open Market Value (OMV). Open Market Value is basically the estimated amount at which an entity or property would exchange contracts (or sell for) between a buyer who is willing and a buyer who is willing at the time of the valuation. Hence, in simple words, the maximum car loan amount you can borrow depends on the car’s valuation and purchase price.
Therefore, considering this, if the Open Market Value is less than S$20,000, then 70% of the valuation price of the purchase price (whichever is lower) is the maximum finance amount. While on the other hand, if the OMV is higher than S$20,000, then 60% of the purchase price of the valuation price will be the maximum finance amount.
Other Considerations for Borrowing
Other than the valuation and purchase price, some considerations can determine how much you can borrow for your car loan. These considerations include:
- Your monthly income which calculates your repayment affordability
- Your credit score, a bad credit rating is a hurdle to your car loan
- Other loans and commitments, such as personal loans, housing loans, or credit cards
What Should Be the Down Payment?
After deciding on the loan amount, the next thing to consider is the down payment. You might be wondering what your initial payment should be. Well, this is easy because the down payment is basically whatever that is left from the maximum car loan you are able to obtain. The catch is that your down payment needs to be paid in cash. Hence, before applying for a loan, it’s best to work on your finances and ensure you have enough cash for your down payment.
How Long Will My Loan Tenure Be?
Typically, most private loan companies and banks offer up to 7 years of the loan period – which is an ample amount of time for a car loan repayment. However, some people prefer a shorter tenure to save up on interest. It is important to be aware of your repayment affordability. The key here is to balance your affordability by taking both factors into consideration: the car loan period and the monthly car loan installment.
A helpful tool is a repayment calculator. ValueMax offers a repayment calculator on their website that allows you to compute for a loan package. The monthly repayment and the interest rate is generated by taking into consideration your tenure and total loan amount.
Why Choose ValueMax for Your Car Loan
ValueMax offers you competitive rates and fast approval. Your loans are processed through their in-house financing team and their personalized service will ensure that all your requirements and needs are met.
You can get up to 70% financing for up to 7 years of the loan tenure. They offer interest rates from 4.28%, and you can receive your loan approval within 1 to 2 days. Moreover, they offer “Floor Stock,” which can be a huge advantage for car dealers.
You can get a dealership financing loan from ValueMax to purchase motor vehicles in stock. This helps you improve your cash flow, increase your working capital, and increase your sales through a bigger range and a larger stock of vehicles.
ValueMax is able to structure flexible financing packages such as balloon financing to suit your requirements. If your bank is unable to meet your needs, or is taking too long to process your application, their financing team would be able to provide a fast and hassle-free solution. Car loans from ValueMax will have no impact to your TDSR.
So what are you waiting for? If you want to know more about auto financing, check out ValueMax now!Learn more about VM Auto finance