Car Loan Refinancing – Who Does It Help?
What is car refinancing anyway? It can also be called car mortgaging or auto re-mortgaging. Or some may refer to it as a re-loan or redo of the car loan in order to ease the financial situation due to tight cash flow. For more details, you may want to see our FAQ or contact us.
There are several situations where this was found helpful by those who approached us.
Purchasing of a Property
In Singapore, getting a bank loan for purchasing of a property requires, besides other criteria, the borrower to fulfill TDSR (total debt servicing ratio) before the loan can be approved. More info on TDSR here.
If a potential borrower does not meet the TDSR, the usual steps taken are the reduction of outstanding liabilities to other financial situations. The easiest of these steps would usually be the cancellation of credit cards that are in the borrower’s name but seldom used since all outstanding available credit is considered as “debt”, even if the amount is not utilized. Then followed by the clearing of any personal loans. These can be small amounts and not significantly affect the TDSR substantially on their own. But done together and with vehicle refinancing, it will have a good chance of significantly improving the borrowers chances of qualifying for the property loan.
You can lessen the monthly payments for your car by paying off a portion of the loan through refinancing prior to applying for the home loan and in so doing reduce the TDSR.
Renewal Of COE
Many car owners face a tough decision when their beloved cars reach the ten year old mark, especially after the many years of good maintenance and loving care poured into most Singapore cars? Many of the cars from Singapore are in surprisingly good shape and comparatively low mileage compared to cars in other countries – this makes it an even tougher decision as to whether to renew the COE on a beloved car coming to the ten year mark.
But should you decide to renew, do not worry that the COE seems a big lump sum which our authority intends to collect immediately upon renewal.
We are able to provide loans for this purpose – do contact us for further details.
We had a customer who worked for an (banking) institution that did not allow him to borrow from other banks and he was unaware of the fine print that was included in his employment contract. His HR department called him up to notify him that he would be in breach of his contract of employment should he not find a way to terminate his relationship to the lender who financed his car purchase. This meant that he needed a big lump sum for settlement of the current outstanding loan quickly and we were able to assist him on this issue and help him retain his employment at his current company.
Reduction of Monthly Payments
Those who have loans outstanding for their car but whose loans do not stretch till the 10th year (or end of the COE) can ease their current tight situation by re-doing their car loan with us. We will be able to lengthen the period of repayment up to a maximum of five years (from the starting date of their loan with us) or the end of COE (whichever is sooner), and by doing so, reduce their monthly payments.
Vehicle for Business Use
Small business owners who have ventured in to limousine transport services have found their venture profitable, but find that in order to comply with the LTA regulations, their limousine transport or private hire vehicles needs to be registered under a company and not in their private name. In order to do so, they would need to pay off their current loan for the bank to release the vehicle for transfer to their company – this usually requires a loan via us in order to facilitate the transfer unless they are able to pay off in full in cash.
Limousine services also require specific limousine insurance which is not sold by all car insurance agents. We are also able to help provide quotes for this. See here for more info on car insurance.
Even if you have a specific situation which is not mention here, feel free to contact us about your car refinancing needs through our website by clicking on the below or call us at 92782880.