Whether you're buying a new or used car, dealers may give you two to three banks or Financial Institutions (FIs) to choose your loan from. However, the dealer will still strongly recommend the one which gives them the highest commission percentages.
Want to make sure you're getting the best loan that suits your needs? Start off by pouring through the information below, and you’ll be better-informed on what each bank or FI offers!
We have collated here all you need to know about the loans offered not only from Sgcarmart Financial Services, but six of the banks and FIs available at most car dealers. These include OCBC, DBS, Hong Leong Finance (Hong Leong), Maybank, Tokyo Century Leasing (TCL) and United Overseas Bank (UOB). The loan rates below are listed according to bank sources at time of writing.
Want to make sure you're getting the best loan that suits your needs? Start off by pouring through the information below, and you’ll be better-informed on what each bank or FI offers!
We have collated here all you need to know about the loans offered not only from Sgcarmart Financial Services, but six of the banks and FIs available at most car dealers. These include OCBC, DBS, Hong Leong Finance (Hong Leong), Maybank, Tokyo Century Leasing (TCL) and United Overseas Bank (UOB). The loan rates below are listed according to bank sources at time of writing.
Car loan interest rates from six major banks
Interest Rate
New Cars
Used PARF Cars
Used PHV Cars
Cars with Renewed COE
DBS
2.48%
2.48%
N.A
N.A
Maybank
2.78%
2.78%
3.75%
3.18%
OCBC
2.78%
2.78%
N.A
2.98%
UOB
2.78%
2.78%
2.99%
2.88%
Hong Leong Finance
2.48%
2.48%
3.28%
2.88%
Tokyo Century Leasing
2.78%
2.78%
3.88%
3.18%
Last updated on Jul 14, 2025.
Balloon Scheme availability and Early Settlement Penalties
'Balloon Scheme' Loan
Early Settlement Penalty**
DBS
1% of the financed amount throughout the tenure.
Maybank
1% of the financed amount throughout the tenure.
OCBC
1% of the financed amount throughout the tenure.
UOB
1% of the outstanding loan throughout the tenure.
Hong Leong Finance
1.5% on the outstanding loan amount within 18 months, no penalty after 18 months.
Tokyo Century Leasing
1.5% on the outstanding loan amount throughout the tenure, additional handling fee will be imposed if terminated within 6 months.
Early settlement and the Rule of 78
To put it simply, a balloon scheme is a loan scheme whereby you are not required to pay instalments on the minimum PARF rebate portion of your car loan. For example, if your car loan is $50,000 and your car's minimum PARF is $10,000, you only need to pay instalments based on $40,000.
The instalments will thus be lower as compared to a conventional car loan, but the catch is that the interest rates are higher. And because you are not paying for the minimum PARF rebate portion, that amount will go to the bank at the end of your car's Certificate of Entitlement (COE) lifespan.
The instalments will thus be lower as compared to a conventional car loan, but the catch is that the interest rates are higher. And because you are not paying for the minimum PARF rebate portion, that amount will go to the bank at the end of your car's Certificate of Entitlement (COE) lifespan.
What's a balloon scheme?
To put it simply, a balloon scheme is a loan scheme by which a higher (higher compared to conventional hire purchase loans) interest rate is applied to your car's primary loan amount before its minimum PARF rebate is subtracted, and the amount is then divided into monthly instalments.
As such, you end up paying lower monthly instalment amounts, which sounds very attractive especially if you are buying an older car, or one with a high Open Market Value, and if you intend to drive it until the end of its Certificate of Entitlement (COE) lifespan. Many car buyers are attracted to a balloon scheme's low monthly instalments but, if you want to sell the car in the event of a bad financial situation or just want to change your car, you may end up paying more, depending on the agreement.
However, even if you drive the car till the end of its COE lifespan, you won't get any money (PARF) back. And, the usual regulated down payment amounts still apply in a balloon scheme. The cash down payment continues to be the main problem for many car buyers. Most car buyers are able to cough up the monthly instalments of conventional hire purchase loans.
As such, you end up paying lower monthly instalment amounts, which sounds very attractive especially if you are buying an older car, or one with a high Open Market Value, and if you intend to drive it until the end of its Certificate of Entitlement (COE) lifespan. Many car buyers are attracted to a balloon scheme's low monthly instalments but, if you want to sell the car in the event of a bad financial situation or just want to change your car, you may end up paying more, depending on the agreement.
However, even if you drive the car till the end of its COE lifespan, you won't get any money (PARF) back. And, the usual regulated down payment amounts still apply in a balloon scheme. The cash down payment continues to be the main problem for many car buyers. Most car buyers are able to cough up the monthly instalments of conventional hire purchase loans.
Sgcarmart Financial Services
By operating on a direct-to-consumer model, the Sgcarmart Smart Loan can offer lower interest rates than competing institutions. The rate for an Sgcarmart Smart Loan to finance a used personal use vehicle is currently 2.28%. Furthermore, applying for an Sgcarmart Smart Loan is easy: Simply click on the loan application button on our listing page, and you'll be able to apply for a loan via MyInfo.
Loan applicants can always check on their loan application status online here, and loan applications are typically processed within one working day, following which, you can expect to receive your loan outcome via the email address you provided.
The Sgcarmart Smart Loan further has no effect on your Total Debt Servicing Ratio, and there's additionally a dedicated team at hand to guide you through your car-buying journey!
OCBC
OCBC is presently offering at 2.78% interest rate for both new and used cars, which will most certainly appeal to buyers across the spectrum. OCBC is also now offering a competitive 2.98% loan interest rate for cars with renewed COE - only slightly above that of Hong Leong Finance.
As with other banks such as DBS, Maybank and UOB, OCBC also has a fixed 1% early settlement penalty on the financed amount throughout the tenure.
DBS
As with other banks such as DBS, Maybank and UOB, OCBC also has a fixed 1% early settlement penalty on the financed amount throughout the tenure.
DBS
The early settlement penalty for a DBS loan is a percentage based on the financed amount, and not the outstanding loan amount. This can potentially be a huge disadvantage if you choose to fully redeem the loan just before maturity as your outstanding loan amount could be very low, but DBS charges based on your initial financed amount.
It would be wise to choose DBS as your loan provider only if you are sure of retaining ownership of your car until the end of, or beyond the loan term.
It would be wise to choose DBS as your loan provider only if you are sure of retaining ownership of your car until the end of, or beyond the loan term.
Hong Leong Finance
At 2.78%, Hong Leong Finance's interest rates for new and used cars are similar to most of the competition. But it provides the best rate for private cars with a renewed COE: Just 2.88%.
And if you do decide to settle your loan early, there isn't any early settlement penalty after the 18th month of the loan tenure. So if you are sure you will own the car for at least 18 months, Hong Leong will be the best bet for you. Other than the attractively low early settlement penalty, Hong Leong also boasts of the cheapest interest rates for cars with renewed COEs.
And if you do decide to settle your loan early, there isn't any early settlement penalty after the 18th month of the loan tenure. So if you are sure you will own the car for at least 18 months, Hong Leong will be the best bet for you. Other than the attractively low early settlement penalty, Hong Leong also boasts of the cheapest interest rates for cars with renewed COEs.
Maybank
Maybank is one of the five companies listed in the above table, which gives out loans for COE-renewed cars. Interest rates for such loans however, can be rather high at 3.18%. Like Hong Leong and TCL, Maybank does also give out loans for China-made cars.
Like DBS, Maybank also has an early settlement penalty of 1% of the financed amount regardless of how early you settle it.
Like DBS, Maybank also has an early settlement penalty of 1% of the financed amount regardless of how early you settle it.
Tokyo Century Leasing
For those who cannot fork out large amounts of monthly repayments, there's always TCL's balloon scheme. They are one of the two in our list that provides balloon scheme loans.
At 2.68%, TCL currently offers the best rate for new cars. Conversely, its interest rates for used cars and cars with renewed COEs are also the highest, at 2.98% and 3.75% respectively.
TCL's early settlement penalty is 1.5% of the outstanding loan amount with an additional 1% penalty if you settle your loan within 12 months of the tenure. So, make sure you do not sell your car within the first year if your loan is with TCL.
At 2.68%, TCL currently offers the best rate for new cars. Conversely, its interest rates for used cars and cars with renewed COEs are also the highest, at 2.98% and 3.75% respectively.
TCL's early settlement penalty is 1.5% of the outstanding loan amount with an additional 1% penalty if you settle your loan within 12 months of the tenure. So, make sure you do not sell your car within the first year if your loan is with TCL.
United Overseas Bank
UOB, like TCL, provides balloon scheme loans. However, its loan interest rates for COE-renewed cars are lower at just 3.18%. On a case-by-case basis, UOB may also provide loans for China-made cars.
If you decide to sell off your car before the end of your loan tenure, UOB will charge you with an early settlement penalty of 1% of the outstanding loan amount.
Other finance companies
There are also some companies that charge a flat administrative fee on the early settlement penalties. Their interest rates are typically consistent with those charged by the banks. An example is Lake View Credit Pte Ltd.
If you decide to sell off your car before the end of your loan tenure, UOB will charge you with an early settlement penalty of 1% of the outstanding loan amount.
Other finance companies
There are also some companies that charge a flat administrative fee on the early settlement penalties. Their interest rates are typically consistent with those charged by the banks. An example is Lake View Credit Pte Ltd.
Sgcarmart Connect
In the event that you do buy a car from a direct seller or simply want to keep your financing options open, Sgcarmart Connect - Singapore's first one-stop auto transaction service - can help you apply for a loan and motor insurance from at least five financial institutions. In addition, Connect will help the seller settle his or her outstanding loan, apply for an insurance refund and draft legal documentation for both parties - all for free. Sgcarmart Connect can be contacted at 6744 3540.
Here are some related articles that might interest you
Rule 78 of car loans: Everything you need to know
Calculate your loan interest for early settlement using Rule of 78
Vehicle dollars and sense - A guide to car loans
Renewing the COE of your car might be a fatal error! Here's why
Buying a used car: A guide to getting the best price
Here are some related articles that might interest you
Rule 78 of car loans: Everything you need to know
Calculate your loan interest for early settlement using Rule of 78
Vehicle dollars and sense - A guide to car loans
Renewing the COE of your car might be a fatal error! Here's why
Buying a used car: A guide to getting the best price
Sgcarmart
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- Get your car listed until it is sold!
- We provide free paperwork support for your transaction
Also, keep in mind the option of selling your vehicle through consignment. You get to decide the selling price and the consignment agent handles all the work. On top of that, you are able to maintain ownership of your vehicle, and if something doesn't work out or if you change your mind halfway, you can choose not to sell.
*This article was updated on 28 March 2023.
