Published on November 3, 2022
Debunking 5 Common Misconceptions About Car Loans
Taking up a commercial car loan in Singapore for your business is a huge step despite the benefits such as not having to shell out a huge sum of money at once. Monthly repayments and interest rates must also be factored into your budget, among other considerations.
Although commercial car loans are common and the pros outweigh the cons, there are still many misconceptions surrounding this method of financing a business. We will be debunking the five common misconceptions about commercial vehicle loans in this article so you can make informed decisions that are in your business’s best interest.
Read on to find out more.
2.Taking up a commercial car loan with a bank is safer
It is only normal for you to explore different commercial car loan options provided by both banks and other finance companies like private car dealers before making a final decision. Thus, you may have heard from people around you or have a preconceived notion that loaning from a bank is a safer option than taking up a loan with a car dealer.
Contrary to popular belief, there are also many reputable car dealers or finance companies in Singapore that offer reliable loans with lower interest rates compared to banks. When it comes to making a decision, it all ultimately boils down to preference and research. If you do decide to take up a loan with a private financial institution, then word-of-mouth recommendations and reviews are some important factors to consider to ensure that you are loaning from a trustworthy source.
3.Commercial car loans take a long time to be processed and approved
This may usually be the case when you take up a commercial vehicle loan with a bank due to the stringent credit assessment process. There will also be a loan review procedure where your application has to be checked thoroughly to ensure requirements are met before approval.
However, other finance companies in Singapore like car dealers will be able to process and approve your loan much quicker, thanks to their flexibility when it comes to the criteria. So if your business needs a quick and efficient approval process, loaning from a private financial institution may be your best option.
3.Commercial car loans are only applicable to new cars
This is untrue, as there are car loans available in Singapore for pre-owned or used cars. If your business does not require a fleet of vehicles that are brand new, considering a used car loan may be more beneficial.
The monthly repayments will also be set at a lower rate due to the smaller amount of money borrowed when you apply for a used car loan. While owning secondhand cars does not sound as enticing as buying the latest model, you will be glad to know that many pre-owned cars have been maintained in tip-top condition and some look as good as new. After all, you need vehicles to get the job done and not the swankiest model to show off.
4.I cannot get a commercial car loan with a bad credit score
While this may be true to a certain extent, especially when loaning from a bank, you may have a higher chance of securing a loan with a private finance company in Singapore.
Some car dealers may still offer you a commercial car loan despite your bad credit score due to their flexible loan criteria. But of course, it is still recommended that you weigh your options and find out as much as possible before committing to a loan. If the terms and conditions sound too good to be true, it usually is the case.
5.Low monthly repayments for my car loan are the best option
Although you may be paying less upfront per month, it is also vital to understand that this translates into a longer repayment period as well. This means that you will be paying more in interest in the long run.
Hence, always work out an appropriate budget before taking up a commercial car loan so that you pay a comfortable amount monthly without having to worry about forking out more than you should in the end.
Take up a commercial car loan in Singapore with Swee Seng Credit
Consider Swee Seng Credit for your commercial car loan needs! Our loans are designed with processes that are seamless and hassle-free to help you save time, money and effort. There are 100% no hidden fees or middlemen that will result in markups as we believe in only offering fair and reasonable prices to our customers.