Published on February 7, 2022

How A Car Loan Can Help You To Kickstart Your Private Hire Or Food Delivery Business

Car Dealers SingaporeCar Loans SingaporeCommercial Car Loan SingaporeFixed-Rate FinancingIn-House Financing Singapore

The COVID-19 pandemic has resulted in many being displaced from their jobs and left to fend for themselves. To make ends meet, people started home-based businesses while others looked to a change in their career paths like becoming a food delivery driver. 

So if you are also looking to kickstart your own private-hire journey or food delivery business like many others have done, getting a commercial car loan in Singapore may help. 

Here are some commercial car loan options to consider.

1. Grabcar loan

Singapore’s transportation and food delivery mogul, Grab, has its own rental and car loan plans for anyone looking to join them as a driver. 


The car loan would help you to save on rental costs and allow you to purchase your own car which you can use not just for private-hire, but also for personal use. 


However, some things to take note of before committing to it include the interest rate as compared to banks and other finance companies in Singapore, the type of car you can use the loan on as there may be restrictions, and the loan tenure. 

2. In-house financing

The previous option is more suitable for those who want to be a private-hire driver but if you are considering starting your own business where you need to make deliveries, other forms of loans may be better. 


For instance, in-house financing as a form of commercial car loan is a great option as it is typically offered by private financial institutions like car dealers and they have less strict restrictions as compared to banks. It is quicker to get an in-house loan from a car dealer as while banks take weeks to approve a loan. 


But just like any other form of loan, taking the interest rate into consideration is key. The average interest rate range from 2 to 5% for most car dealerships in Singapore when it comes to in-house financing. Make sure to read the fine print of the contract too and only borrow what you need.

Commercial Car Loan - In House Financing
Commercial Car Loan – In House Financing

3. Fixed-rate financing

Fixed-rate financing is pretty similar to in-house financing but the greatest difference is that the interest rate stays the same throughout your entire loan tenure with fixed-rate financing. This gives you a predictable monthly payment figure to work out a budget but take note that you may be paying more should the interest rate ever dip. 

Nonetheless, it is still a good option to consider if you prefer a vehicle finance solution with a guaranteed interest rate. 

4. Balloon financing

Balloon financing is another commercial car loan alternative in Singapore, designed to allow borrowers to repay a lower monthly instalment, thanks to the Preferential Additional Registration Fee (PARF) rebate. On the other hand, the interest rate is higher than a typical car loan. 


The PARF rebate is based on the car’s age at deregistration as well as the amount paid on ARF. You will have to include the PARF rebate in your last loan instalment so to fully benefit from this, it is advisable to drive the car till it is ready to be scrapped. 


Hence, this may not be the best if you are considering purchasing a fleet of vehicles for your food delivery business since unforeseen circumstances could arise before the 10 years is up. 

Now that you know more about the different types of car loans available in Singapore, you can make more informed decisions suitable for your needs and budget.

If you wish to proceed with in-house financing, consider Swee Seng Credit. Our in-house financing car loan’s interest rate starts from a competitive 2.98% with no hidden or additional charges. Get in touch with us today.