Cars or automobiles today have evolved into something more of a necessity than a luxury like it was decades ago. Today, owning a car in no longer a status symbol (except perhaps if you own expensive sports and luxury cars) but more of a need to get you from one place to another. This is perhaps the reason why in almost all parts of the world applying for car loans are getting to be a very common activity among individuals. Applying for a car financing from any Loan Company is the first step in owning a brand new car.
This is a tool or more specifically type of loans that is used to purchase a car or any other types of vehicles and this financial aid can be procured from the in-house financing of the Vehicle Company (or simply an assistance from them), banks and other large lending institutions. There are actually four basic things you need to know when applying for a car loan and these are the qualification requirements, from whom to apply the loan with, the legal obligations of taking out a car loan and more importantly insurance obligations because once approved, the car in question will be placed into a lien and the lender will have complete rights over the vehicle until the loan has been paid or the car’s loan mortgaged is released.
The qualification for a car loan (also a type of a bank loan if the assistance is provided by a banking institution) is strictly based on the credit rating or score of the loan applicant. Along with this, a review of your credit rating, income generating resources, income to debt ratio will be done by the lending institutions to ensure that the borrower will be able to pay for the loan.
In Singapore, there are six steps to follow in applying for a car loan and these are first, to choose the car you intend to buy. Second, preparation of the various loan requirements such a copy of your legal identification, preferably your passport, two consecutive months of your original payroll receipts, proof of employment, credit rating, credit history and your contact number. Third, these documentations along with your application will then be forwarded to the bank. Fourth, if there no required missing documents you will be called in for an interview and if all the necessary requisites have been fulfilled and the bank satisfied, chances are your loan will be approved. Fifth, before the loan is released, you and the bank need to sign documents covering repayment terms and conditions and after all of this have been accomplished, the vehicle will finally be released to you. Singapore today have a number of banks and financial companies providing car loans to various individuals so it would be to your advantage to look for the right lending company that will suit your needs. Remember to compare their various offers so you can determine which one can give you the least interest on your loan.
Flexible loans are type of loans designed to have flexibility, allowing borrowers to change the term of the loan to suit specific situations. The loan is also designed with the specific restriction to protect the borrower from getting into more financial problem. In most cases flexible loans are also quite similar to bank loans only it gives the borrower more leeway in using the funds. Flexible loans are very much like the credit card or a type of an overdraft protection because its mixture of several types of loans. One feature of flexible loans is it allows you to underpay or overpay your loan and no surcharge or penalty is charged to you. Flexible loans can be designed or restricted in various ways. Flexi loans can disburse a single payment but it also allows a borrower to get more money on the loan as long as a sizable amount of it has been paid. A Loan Company can also structure the financial aid to provide the borrower some kind of credit limit so he can just withdraw money from it little by little until the funds run out. The nice part about this type of loan is that even before the fund is exhausted, the borrower can re-apply to have the loan refreshed with additional cash. One very useful function of flexible loans is when an individual is in a situation where he does not know the exact amount of money he would need for a specific expense. For instance, the cost of renovating a house is always never exact. The expense for this kind of activity can either surpass the initial cost estimate or it can be lower. A flexible loan in this case can be very handy because the borrower can always overestimate the amount he needs in order to be secured that that the money he has for the renovation will be enough to cover the expenses.
We are all aware that most lending companies including banks have limits when it comes to providing financial assistance. They usually have very strict and conservative repayment policies that you need to follow and many of them requires some form of collateral from you for the loan. Also it is a way for them to be reassured that you won’t renege on your loan. Flexible loans are most of the time unsecured. If you have a good credit rating or score from the Singapore Credit Bureau, chances are you will not have a problem applying for a flexible loan and at the same time be given a reasonable interest rate on your loan. A little word of caution though, flexible loans can also be problem if the borrower is undisciplined and would tend to overspend or use the reserve funds for personal expenses and not for the purpose they were intended for. These undisciplined borrowers may find themselves withdrawing money for expenses that are not crucial and this will just put them in more financial trouble. These are the people who should really avoid flexible loans because it can become a continual loan resource for them putting them at a very high financial risk and at considerable cost.