Since I graduated from college, I’ve been commuting from home to work. And to be honest, like the man I am, I always dreamed of having my car. It is cool to have a Royce or a Ferrari, but a simple vehicle that would take me to work or work is enough. But the problem is I can’t afford it, so I resorted to car financing in Singapore.
Generally, car financing is a car loan. Your chosen financial institution, be it a bank, car dealer, or money lender, will pay for the vehicle so you can have it. In return, you should pay the financial institution in instalments with interest. The car then becomes collateral for the loan.
What does collateral mean? If ever you fail to complete the payment for the car, your chosen finance companies in Singapore will seize the car. Applying for vehicle financing is not easy. Many financial institutions turn down applications for various issues. That is why I prepared for it very well.
Here’s how I prepared for my commercial vehicle loan in Singapore:
1. HAVE A SOURCE OF INCOME
It is a no-brainer. You will not lend someone your money if you know the person can’t pay. It is the same with financial institutions. They will check whether you can pay. How can they do this? Through your income.
Car financers may require you to submit documents, including income tax statements and pay slips. My tip is to have multiple sources of income. Besides your day job, you can indicate your business or part-time jobs and side hustle.
Also, your income may determine the amount of money you can borrow. The bigger your income is, the bigger the money lenders will lend.
2. HAVE A STABLE JOB
Besides income, they also consider employment. They are less likely to approve unemployed borrowers, not unless they are managing their businesses.
The rule of thumb is to be consistently employed for two years straight. It can be in one company or several companies, as long as you have had a job for the last two years, you’ll get accepted for used car loans in Singapore.
3. HAVE NO OUTSTANDING DEBT
As much as possible, ensure that you don’t have an outstanding debt when you apply for car financing. That was what I did because outstanding debt can also affect your capacity to pay. At least from the perspective of car financers.
So if you still have debt from different financial institutions, you should pay them off first. Loan consolidation can ease the burden of multiple loans.
4. HAVE A HIGH CREDIT SCORE
Whether business loans or used car loans in Singapore, all financial companies consider your credit score before they approve your loan application.
A low credit score means you don’t pay your past loans on time, or you rarely get loans. A high credit score means you are a great borrower because you pay your loans on time. Financial institutions love people with high credit scores.
These are the things I did before I applied for car financing in Singapore. These tips may help you with your application, too.
Swee Seng Credit is one of the best finance companies in Singapore. Visit Swee Seng Credit today.
