Car Loan Refinance FAQ
We hope to answer some of the common queries that one may have about refinancing of car loans and other auto vehicles here on this page. Common question like “Where to get no proof of income car loan?”, “Why refinance existing car loan?” etc. These may not be exhaustive but we hope to fill you in on most parts. For specific other questions not found here, please do contact us for further details.
Why should I refinance my car?
This depends on your needs. Our customers search for and come to us to look for a solution when they find the burden of monthly repayments outweigh their current financials – sometimes it may be a longer than anticipated time between jobs. In such situations, refinancing your car may be one of the available options to make the money last till that next job is found.
Refinancing allows for lower monthly repayments. Reducing of monthly payments is achieved by stretching out your outstanding amount over a longer term. Depending on the situation, you may also get money upon approval.
Can I apply if my credit rating / report is not good?
We understand that people run into personal financial squeezes sometimes and some of you may have no proof of income. We offer to look at your situation and consider each case based on your unique circumstances. However, we do appreciate that you are candid about the challenges you may be facing, so that we may advise you better and go to the most appropriate solution for your situation.
All this will be done at a face to face discussion and any details you may disclose will be kept in fully confidential to protect your privacy.
What are the current interest rates that I will be paying on a refinance?
We have to be upfront here that the interest rates you will be paying are higher than those given for a brand new car loan. But surely, this will be much lower than borrowing on your credit cards. The interest rates are fluctuating as with all loan types, please do inquire when you come by to our office.
Banks and financial institutions work on a risk assessment basis and that is the reason used car loan interest rates will always be higher than that of a brand new car. This actually applies for all sorts of products and financial instruments, not just car loans. For example, note that when investing in a unit trust that offers higher percentage of potential returns, it will present the buyer of the fund more risk.
That said, we are here to assist to help you out.
What is the difference between a car loan and refinancing?
When we speak of loans in Singapore, it is often that we do not think of it as hire purchase. But in fact, all loans in Singapore for cars are hire purchase. But think of it not so much as purchasing the car – the customer who takes the loan is a hirer and legally, the car is collateral and will be claimed by the financial institution upon default of the loan. In this way, there is not much difference between a new car loan and refinancing.
You may think of refinancing as the financing institution granting you a used car loan, except that this used car is in fact the same car that you have driven for some time and are seeking to ease the monthly repayments for.
Some finance firms may refer to this as vehicle mortgage.
What if there are still outstanding balances on my loan?
If your refinancing application is approved after our checks, the balance amount owed to the lender in your existing loan will be paid off by us. Depending on the car you are refinancing (the age, model and state of its condition), you may be able to get some cash in hand.
You will definitely be able to get cash in hand if your car is already fully paid for. Again, just think of it as selling your car to us the dealers and you buy it back from us with a loan as a used car. You will receive money when you sell us the car.
What are the requirements when making the application for refinancing?
We would like to see your identity card, declared income documents, know of the status of your place of residence. Please bring documents related to these to show us when you come by to our office.
We do also require that your car be fully insured at the point of application or upon approval of the application. But no worries, since we also work in motor insurance, we can handle this for you together as part of the process.
Are there any fees involved in the application?
There are no fees involved in the application, however, upon approval there is an administration fee of, typically, $500 and other related fees such as vehicle transfer fees (only if there is a transfer).
Is there any security or deposit required?
The car forms your collateral in a refinance, similar as in any car loan. We do not require any deposit amount.
Other terms and conditions may apply, please feel free to ask when you come by for your application.
There are some details I would like to know that you have not mentioned here. How can I learn more?
Ask us more through this link. We will be happy to answer your queries.
I want to refinance my car, how can I do that?
Simply click on the below.