COE renewal - should you choose a bank loan or in-house loan?

Getting a brand new car is a costly thing, especially with the exhorbitant COE prices these days. However, if you are currently driving a car that has a COE expiring soon, you should consider a COE renewal for five or 10 years as a more budget friendly option.

The COE renewal process is pretty simple. There is no need to bid for a new COE, instead, you just have to pay the Prevailing Quota Premium (PQP) for your car's category. The PQP is a moving three-month average of current COE prices - these means that the cost for COE Renewal is also likely to be less volatile than a brand new COE.

Even though the PQP is a substantial sum, you don't have to worry too much. You don't have to cough up your entire savings to pay the entire sum, as there are COE renewal loans offered via a bank loan or in-house loan.

Looking to get a COE Renewal loan, but unsure which is the best option for you? Read on and find out more!


Bank COE renewal car loans

Banks usually offer attractive interest rates when compared to in-house COE renewal loans.

Maybank, for example, offers an interest rate of 3.18%, and Hong Leong Finance at 2.88%.

While a COE renewal loan with a bank is attractive, it isn't as easy to secure as banks require you to have a good credit score to secure the loan.

Banks will access your credit to see your capacity to take a loan. The process usually takes a few working days.

Generally, it is not as easy to score a loan from the bank as compared to an in-house loan, as your eligibility for a loan is taken into account.

The good thing is that banks are transparent, offer added security, and rarely do banks charge exorbitant administrative fees as compared to in-house COE renewal loans.

Do note that banks DO NOT accept direct COE renewal loan applications. You'll have to go through an agent (like sgCarMart Connect) that offers the same interest rates as the bank.  


In-house COE renewal car loans

For in-house COE renewal loans, the process is usually much simpler, but attracts a higher interest rate when compared to banks, starting from 3%, going up to as high as 4%, depending on your loan amount and loan tenure.

There are exceptions when promotional interest rates (as low at 1.88%) are offered in order to attract more customers to take up an in-house loan, though the admin fees may be higher.

Generally, in-house loans are approved quicker than bank loans, as they may not require credit checks. Even if they do carry out credit assessments and you have a poor credit rating, it seldom affects your chances of getting a COE renewal loan approved.

There are numerous 'middlemen' companies in Singapore who can provide in-house COE renewal loan services. But their interest rates can vary. Acting as a middleman to in-house loan companies, these middlemen may end up charging you a higher interest rate as compared to you going directly to the company for your COE renewal loan. sgCarMart Connect does not mark up the interest rates that banks offer. We offer consumers the exact same rates as the banks and in-house loan companies.  
 
 
Deciding factors

Simply put, if you have a good credit score, it is best to take up a bank loan for your COE renewal. But that leaves you with the hassle of handling all the paperwork required for taking up a loan, as well as the application process to renew your COE.

But it is always wise to make a comparison between the two, making sure you make the best choice according to your COE renewal loan needs.

There are certainly benefits to taking either a bank or in-house loan for your COE renewal. sgCarMart Connect helps to make the best choice between the two, with paperwork all included. Find out more HERE.
 
 
Here are some COE renewal articles that you might be interested in

6 things to note before you renew your COE for five or 10 years

A simple guide to COE renewal

5 cars in Singapore that are worth renewing COE for

*This article was updated on 30 September 2022