Don’t know how to choose the right car financing Singapore? Car financing has become a massive business in today’s time. Financing companies make a lot of money out of the interest they earn in return. Today we shall be guiding you the procedures to choose the best car financing institution in Singapore.
Choosing the right financial institution is not an easy task. People often make silly mistakes while choosing the institution and end up putting themselves in a soup. These small and silly mistakes should be avoided in order to get a great deal in return. Fasten your seatbelts to learn about getting the best deal out.
INSTITUTION’S ANALYSIS
Before taking a loan from anywhere a research on financial institution’s services is very important. Every situation has different criteria, agendas, and eligibility. You cannot fit your requirements in every institution’s ability; this is impossible. Doing and overall research of the financial industry is the first crucial step you have to follow—study about the market, the current prevailing rate of interest, and the services rendered by them. Every institution serves you with different functions. You have to choose accordingly, which service suits best with your requirements.
The primary analysis you will be making in this step is the interest rate offered by different financial institutions. The interest rate is the extra amount you will be paying on the loan you acquire. The interest rate also differs from car to car. The interest rate of a new car loan will be different from an old car loan. The price offered by the bank is usually low compared to the interest rate of the dealer’s agency. The reason behind this is that the services provided by a dealer’s agency are far better and faster than the services of a bank. Banks usually take a lot of time to complete the procedure; this makes clients lose their interest in buying a car. Whereas the dealer’s agency hardly takes 3 days to complete the process. This is the reason they charge a higher rate of interest compared to other financial institutions.
BUDGET ESTIMATION
You cannot blindly jump into a loan without estimating your overall financial budget. You can afford to buy a car if you have extra monthly savings. If all your income is spent on expenses and there are no savings, you cannot think of taking a loan. Before taking this decision, sit and make an estimation of your income. On a sheet, write down your income and expenses and see what is the saving your getting in hand at the end.
On the saving, add the percentage of interest you’ll be paying to the financial institution. The online EMI calculator will help you estimate the total EMI. Once you find the total amount, you will get an idea of how much you are required to pay to the institution every month. If you have the capacity to pay the EMI, then you are all ready to opt for a loan.
ADVANCE PAYMENT
The financial institution can help you by providing a loan amount up to 60 to 70%. You should deposit the balance amount as an advance payment. The advance depends on how much your financial institution is granting you.
If the price of the car you are purchasing is $20000 or below, the financial institution will provide you 70% of the total loan amount. If the car’s price exceeds $20,000, you will be granted only 60% of the entire loan. The remaining 40% of the amount should be given an advance. Thus make sure you have some amount in your hand to pay as advance to secure your loan.
DOCUMENTATION
To secure a loan, you need to have proper documents in hand. No financial institution grants a loan without taking documents from you. This is mainly done to protect their money from going in vain. To secure a loan, you need to keep the following records ready:
- NATIONAL ID: This is asked by the bank to know your nationality and citizenship status. A lot of financial institutions do not provide loans to outsiders. So, if you are a citizen of some other country, you need to find an institution that gives credit to foreigners.
- INCOME STATEMENT: All financial institutions ask for your previous record of income. This is done to check your capability to repay the amount back. The institution will ask you to provide the current sources of income. If a firm or a business company wants to hire a car loan, the company has to have a minimum turnover of 3 Lacs per annum to qualify.
- PROPERTY PAPERS: Many financial institutions ask to provide property papers on a safer side. This is done to secure the granted loan amount. Thus make sure you have your property papers ready before applying for a loan.
TIMING
Timing plays a significant role in getting a good deal. Every product has a different period of sales time. The same strategy is applied over here also. To get a great discount, it is always better to offer car loans during festival times. During this period, a lot of brands not only provide discounts but also provide a minimum rate of interest on the loans.
Another great time to get a good deal is to go during off-season time. In other to make the sales during the off-season, the sales team will be ready to offer you the best rate possible. You can also go during the month-end when the sales team wants to achieve its desired target. Another best time to visit the showroom is on weekdays. People tend to go out for shopping only on weekends. When you visit the showroom during weekdays, the crowd will be less, and the salesperson will give you more time and attention. By doing this, you will get more appropriate information on different categories of loans. Capitall finance is an excellent option in Singapore to acquire such loans.
