How does a car loan work in Singapore?
In Singapore, purchasing a car involves considerable costs due to regulations such as the COE (Certificate of Entitlement) and other related expenses. For many, financing the vehicle is the most practical solution, allowing costs to be spread over manageable installments over time.
The POSB Car Loan offers an efficient and reliable alternative. This financing covers up to 70% of the vehicle’s Open Market Value (OMV), reducing the need for a substantial upfront payment. With repayment terms ranging from 1 to 7 years, it provides flexibility to align the loan with your financial situation.
Additionally, the bank is known for its streamlined process. Customers can apply directly via the digibank app or Singpass, eliminating complex paperwork and making the process fast and efficient.
Who is eligible for this loan?
✔ Age: Applicants must be between 21 and 65 years old at the time of application
✔ Residency: Must be a Singapore citizen or permanent resident
✔ Minimum income: A minimum annual income of S$20,000 is required
✔ Credit history: Must have a healthy credit record with no significant defaults
What documents are required to apply?
✔ Identification document: NRIC (for citizens or permanent residents) or valid passport
✔ Proof of income: Bank statements from the past three months or recent payslips
✔ Proof of address: Utility bills or official correspondence confirming your address
✔ Vehicle details: Detailed specifications of the car to be purchased, including price and seller information
What fees are charged?
✔ Processing fee: A percentage of the loan amount, charged upon approval
✔ Interest rate: Determined based on the POSB Car Loan amount and repayment term. These rates are highly competitive and market-aligned
✔ Early repayment penalty: Applicable if the loan is paid off before the contract term ends
A word of advice!
Before opting for the POSB Car Loan, it’s essential to conduct detailed financial planning. Ask yourself: Is this vehicle necessary for my daily needs? Can I manage the installments without compromising my financial stability?
An important consideration is the total cost of car ownership. In addition to loan installments, you’ll need to cover expenses such as COE, insurance, maintenance, and fuel. These costs can add up significantly over time.
Choose a repayment term that balances affordable installments with a lower total cost. Longer terms result in smaller monthly payments but higher total interest costs. On the other hand, shorter terms mean lower interest but higher installments. Analyze your budget carefully and make informed decisions. Remember: Credit is a powerful tool but should be used responsibly.
Apply now for the POSB Car Loan!
Ready to take the first step in purchasing your vehicle? POSB offers a 100% digital experience, enabling you to submit your application via digibank or Singpass in minutes. With dedicated support and transparent terms, you can move forward with confidence.
Don’t wait any longer! Click the button below to start your application process and acquire the car of your dreams in Singapore.