Car Loan VS Personal Loan: Which One Should I Go For?
When it comes to buying a car, prospective buyers can choose between car loans or car leasing. The former one does not have any restrictions on the types and the ages of the vehicle. You can also customise your repayment period and the loan amount. Moreover, you can enjoy a better interest rate if it coincides with the tax period. To help you make an informed decision, MoneySmart has put together a list of selected car loans for you.
Selected Car Loans
Car Loan VS Personal Loan
To get yourself a new set of wheels while keeping your cash flow, applying for car loans can be the best strategy even if you are in a position to pay in full. In the past, car leasing may be the most common option, but with more car loans available, you have more choices than you thought! MoneySmart has summarised your available options when it comes to buying a car:
- The vehicle registration document will be kept by the car dealer
- Required to pay deposit upfront (applicable to rental)
- Required to purchase comprehensive insurance
- Restrictions on car types and ages
- The final loan amount and interest rates will be affected by your credit scores
- Car buyers can keep the vehicle registration document
- No restrictions on car types and ages
Should I go for car loans or personal loans?
The application of car loans is simple. It is often taken care of by the car dealer. but the interest rate is less transparent compared to car loans and it has restrictions on the car’s age. Applicants are required to buy comprehensive car insurance and the vehicle registration document will be kept by the car dealer, which is inconvenient.
Conversely, if you go for personal loans, it provides you with greater flexibility with no restrictions on the types and the ages of the car. Moreover, you can keep your own vehicle registration document. You can also make use of MoneySmart website to compare the different loan products available before you make a final decision.
Second-Hand Car Loans
Is it wise to repay car loans earlier?
- It depends on the car loans that you have applied for. In general, you are required to pay an early repayment charge, which makes it unwise to repay earlier.
Should I buy a car with a personal loan?
- Buying a car can cost a fortune from monthly repayment, insurance, maintenance fee, etc. If you don’t have enough funds to pay in full, it is wise to take off some financial pressure by taking out a loan with a low-interest rate to fund your purchase. A personal loan offers better flexibility when compared to car loans, you can also enjoy cash rebates for applying a personal loan through MoneySmart.
What documents are required to apply for car loans?
- You are required to provide proof of identification, proof of residential address, bank statement and car buyer's purchase contract to apply for a car loan.