Best Car Loan Interest Rates

A Comparison of The Best Car Loan Interest Rates (2021)

Anyone who wants to own a new car in Singapore must have a 5-6-figure amount above their savings stashed away to pay in cash. If you don’t have that amount on hand, you’ll have to make deal with best car loans. Fortunately, the COVID-19 pandemic in 2020 continues to drive down loan interest rates in 2021. Car loan interest rates are looking pleasant for would-be car buyers in Singapore.

If you’re lucky to have won your certificate of entitlement (COE), you can immediately use a car loan to finance your car. Bank car loan interest rates still reach 2.5-2.9% annual interest rates (which reach about 5-5.5% effective interest rates) in 2021. The best news is many banks offer car loans at this amount, too.

Any borrower that can handle today’s existing loan interest rate figures can go ahead and use any of the car loans we’ve listed below. We’ll go deep into the loan details for each car loan financing offer to help borrowers establish an overview of their total car loan spending in the future.

Best Car Loans For New and Used Cars 2021

For 2021, the following car loans give you the best value for money in various aspects. We’ll fully detail each loan’s benefits after this helpful table.

Minimum Loan Amount Maximum Principal Annual Interest Rate Maximum Loan Tenure
OCBC Car Loan – New Car S $15,000 70% of purchase or valuation price whichever is lower 2.78% (5.27% EIR) 7 years
UOB Hire Purchase Car Loan – New Car S $10,000 70% of purchase or valuation price whichever is lower 2.78% (5.59% EIR) 7 years
Maybank Car Loan – New Car S $15,000 70% of purchase or valuation price whichever is lower 2.68% (5.00% EIR) 7 Years
OCBC Car Loan – Used Car S $15,000 70% of purchase or valuation price whichever is lower 2.98% (5.64% EIR) 7 Years
UOB Hire Purchase Car Loan – Used Car S $10,000 70% of purchase or valuation price whichever is lower 2.98% (5.98% EIR) 7 Years
Standard Chartered (For New and Used Car) S $15,000 100% of purchase or valuation price 2.48% (5.42% EIR) – New Cars

2.78% (5.89% EIR) – Used Cars

7 Years

Auto Loan Products in Detail

1. Best Car Loan for New Cars – OCBC Bank Car Loan

OCBC’s new car loan gives COE certificate holders the best auto loan for new vehicles. You won’t be facing high interest rates with OCBC’s New Car Loan’s 2.78% (5.27% EIR) auto financing. Plus, you can pay your outstanding loan plus interest within seven years using six different payment methods. Use OCBC’s Bank Car Loan for new cars for the lowest interest possible.

Key Features:

  • Maximum Loan Amount: 70% of purchase or valuation price, whichever is higher
  • Interest Rate: 2.78% (5.27% EIR)
  • Loan Tenure: 1-7 years

OCBC’s Bank Car Loan for new vehicles requires Singaporeans, PRs, and working foreigners to be 21 years of age. The bank requires new borrowers to open an OCBC bank account for loan disbursal.

2. Best Car Loan for Used Cars – DBS Car Loan

Singaporeans, PRs, and foreign workers who don’t mind owning used and fully capable vehicles will find DBS’s car loan perfect. DBS’s car loan for used vehicles has a nominal interest rate of 2.84% (5.85% EIR) per annum and a longer repayment period of seven years. Borrowers can apply for DBS’s car loan through SingPass. DBS account owners can use DBS Digibank’s quick loan application facilities.

Key Features:

  • Maximum Loan Amount: 60-70% of purchase or valuation price depending on OMV
  • Interest Rate: 2.84% (5.85% EIR)
  • Loan Tenure: 1-7 Years

All borrowers must be 21 years of age and above to use DBS’ car loans.

3. Best COE Renewal Loan – Motorist

Motorist offers the most comprehensive COE renewal loan for Singaporeans. You can stick with your current vehicle with Motorist’s low COE renewal loan interest of 2.60% (5.34% EIR). In addition, Motorist will help you process your COE renewal paperwork. Motorist provides you financing using products from UOB, Maybank, Hong Leong Finance, and other accredited  financial institutions.

Key Features:

  • Maximum Loan Amount: 100% COE renewal cost
  • Interest Rate: 2.60% (5.34 EIR)
  • Loan Tenure: 5-7 years

Only car owners can apply for a Motorist’s COE loan.

Honorable Mentions:

4. UOB Hire Purchase Car Loan For New Cars

We’re sure that UOB’s Hire Purchase Car Loan won’t be your first choice because of its substantially high interest rate at 2.78% (5.59% EIR). However, it’s an excellent alternative if you don’t qualify for both OCBC and DBS’ vehicle loans. UOB makes it easy for borrowers through its paperless transaction system. In addition, you can receive your loan amount on the same day you submit your requirements.

Key Features:

  • Maximum Loan Amount: 70% of purchase or valuation price, whichever is higher
  • Interest rate: 2.78% (5.59 EIR)
  • Loan Tenure: 1-7 Years

Singaporeans, PRs, and foreign workers can use UOB’s car loan for new vehicles. However, foreign workers will need a local guarantor to apply for the loan.

5. Maybank Car Loan for New Cars

Borrowers who are unlucky with their previous car loans can use Maybank’s car loan as an excellent backup financing. Currently, Maybank’s 2.68% (5.00 EIR) is one of the best rates available. Borrowers have a loan period of 1-7 years. You can pay Maybank through direct debit or using your GIRO payments.

Key Features:

  • Maximum Loan Amount: 70% of the purchase or valuation price, whichever is lower
  • Interest Rate: 2.68% (5.00 EIR)
  • Loan Tenure: 1-7 years

Singaporeans, PRs, and foreign workers can use Maybank’s new car loan services. All foreign workers must work with local guarantors to secure their loans.

6. Standard Chartered For Both New and Used Car

Standard Chartered’s auto loan is one of the best backup car financings you can find. You’ll find car loans for new and used cars with adequate interest rates ranging from 2.5-2.7% (5.45% EIR). The highly-reputable bank falls short with a few decimal places below OCBC and DBS’s offers this year.

Key Features:

  • Maximum Loan Amount: 100% of the new or used vehicle price
  • Interest Rate: 2.5-2.7% (5.45 EIR)
  • Loan Tenure: 1-7 Years

Singaporeans, PRs, and foreigners working in the country can use Standard Chartered’s new and used vehicle loan. However, foreigners will need to have a local guarantor to secure their car loan.

7. OCBC Car Loan for Used Car

The bank’s new car loans are phenomenal. However, OCBC’s used car loan is an honorable mention because the percentage difference is staggering. OCBC’s used car loan interest rates can reach 2.98% (5.64% EIR). You’ll have to finish paying the entire used car loan within seven years.

Key Features:

  • Maximum Loan Amount: 70% of the new and used vehicle price
  • Interest Rate: 2.98% (5.64% EIR)
  • Loan Tenure: 1-7 years

All Singaporeans and PRs can apply for OCBC’s car loan. Foreign workers working with a local guarantor can easily secure the loan.

 

Considerations Before Opting For a Car Loan

Car loans are a huge financial responsibility. Therefore, we highly recommend that you extensively plan your budgets and expenses. Make sure you have enough money to finance a new car before applying for COE.

  1. Interest Rates

This year’s interest rate for car loans is optimal. Therefore, prospective car buyers should take advantage of this year’s interest rates. Use any resources available to find the best rates available in the market.

  1. Fees

You might find financing that covers your prospect car’s total purchase price. However, pay attention to the possible fees you’ll face. Most banks are strict with their penalty fees that can rack up against your repayments.

  1. Ease of Application

All car loans require a high credit score. Borrowers who don’t have poor credit scores should have a seamless car financing application process. In addition, consider banks that make it easy to get car financing with minimal processes. For example, Standard Chartered’s financing application is conveniently online.

 

Other Things To Know

  • Can Low-Score Borrowers Use Car Loans?

Borrowers with a poor credit score will find car financing applications challenging. We highly recommend that prospective borrowers improve their credit score by any means. Used car financing borrowers require better payment scores due to the financing’s higher demands.

  • Can I Refinance My Car Loan?

You can refinance your car financing in the future. However, we highly advise against it because of the high termination and early settlement fees you’ll face. In addition, no other financial product can match the interest and loan amounts of bank car financing.

  • Are In-House Car Financing Useful?

Vehicle dealerships might offer attractive in-house financing rates. However, you might end up paying much higher by your financing term’s end. Dealerships have significantly higher interest rates than bank car financing.

  • How Easy Is It To Apply For a Car Loan?

Some banks require you to submit your documents to their branch. On the other hand, some will ask you to use their online application facilities. Furthermore, banks with online facilities will likely disburse your loan faster because of your online access to their digital banking facilities.

  • How Challenging Is It To Get a COE?

A certificate of entitlement (COE) gives you vehicle purchasing rights. All Singaporeans place COE bids. Previous raffles have shown that more than 50% of bidders win the right to purchase a vehicle in Singapore. You cannot apply for a vehicle loan with any bank without a COE.

  • Is There a Way to Guarantee COE?

All COE issuing procedures are raffles. Therefore, new car owners must bid and fairly win their rights to purchase vehicles. Existing car owners can renew their COE after five years of vehicle ownership.

  • Can I Use Other Loan Types To Pay For a Car?

You can use a personal loan to pay for your vehicle. However, we highly advise against doing this because vehicle loans offer the best options for monthly payments and interest rates. Personal loans with significant interest rate drops that are drastically lower than average car loans are rare but good alternatives.

 

Make Your Informed Decision on Car Loans Today

The best car loan has the following traits:

  • A low interest rate
  • Excellent loan payment term
  • Covers more than 50% of your new vehicle’s purchase price
  • Offers a smooth loan application experience

Use our handy table above to find the perfect loan for your needs. If you can’t find an excellent loan for your needs, you can always use Instant Loan’s quoting service to find the best ones. Instant Loan can provide you with three high-quality quotes from dependable licensed moneylenders.

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