Car Loan Promissory Note for Singapore

Car Loan Promissory Note Template for Singapore

A Car Loan Promissory Note under Singapore law is a legally binding document that evidences a borrower's promise to repay a specific amount borrowed for purchasing a vehicle. The document complies with Singapore's Banking Act, Moneylenders Act, and relevant MAS regulations, including specific requirements for vehicle financing such as loan-to-value ratios and maximum loan tenures. It includes detailed terms of repayment, vehicle specifications, security interests, and default provisions.

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What is a Car Loan Promissory Note?

A Car Loan Promissory Note is essential in Singapore's vehicle financing landscape, where strict regulations govern automotive loans. This document is used when an individual or entity borrows money specifically for vehicle purchase, creating a legally enforceable promise to repay the loan according to specified terms. The note must comply with Singapore's regulatory framework, including MAS Notice 642 on motor vehicle loans, and typically includes the loan amount, interest rate, payment schedule, vehicle details, and security provisions. The document serves both as evidence of debt and as a security instrument, protecting the lender's interests while ensuring compliance with local banking and consumer protection laws.

What sections should be included in a Car Loan Promissory Note?

1. Parties: Identification of lender and borrower with full legal names and addresses

2. Loan Amount and Promise to Pay: Principal amount, interest rate, and unconditional promise to repay

3. Payment Terms: Payment schedule, installment amounts, and due dates

4. Vehicle Details: Complete description of the vehicle including make, model, VIN, registration number

5. Security Interest: Details of the vehicle as collateral for the loan

6. Default Provisions: Consequences of default and remedies available to the lender

7. Execution: Signature blocks and witnessing requirements

What sections are optional to include in a Car Loan Promissory Note?

1. Insurance Requirements: Details of required insurance coverage when lender requires specific insurance provisions

2. Prepayment Terms: Conditions for early repayment when early repayment options are offered

3. Co-signer Provisions: Terms applying to any co-signers when a co-signer is involved in the loan

What schedules should be included in a Car Loan Promissory Note?

1. Payment Schedule: Detailed amortization table showing payment breakdown

2. Vehicle Documentation: Copies of vehicle registration and insurance certificates

3. Loan Calculation Details: Breakdown of interest calculations and total loan cost

4. Terms and Conditions: Standard terms and conditions of the loan

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Singapore

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Industries

Banking Act (Chapter 19): Primary legislation regulating banking institutions and financing activities in Singapore. Contains key requirements for loan documentation and banking practices.

Moneylenders Act (Chapter 188): Regulates money lending practices and documentation requirements when the lender is not a bank or licensed financial institution.

Hire-Purchase Act (Chapter 125): Contains mandatory provisions for vehicle financing, especially relevant if the car loan is structured as a hire-purchase agreement.

Consumer Protection (Fair Trading) Act: Ensures fair trading practices and protects borrowers from unfair practices in financial transactions.

MAS Regulations: Monetary Authority of Singapore regulations covering vehicle financing restrictions, Loan-to-Value (LTV) ratio requirements, and maximum loan tenure requirements.

Contract Law (Chapter 53): Governs basic contract formation requirements and ensures the promissory note is legally binding under Singapore law.

Bills of Exchange Act (Chapter 23): Legislation governing negotiable instruments including promissory notes, defining legal requirements for their validity.

Personal Data Protection Act 2012: Regulates the handling of borrower's personal information and establishes data protection obligations.

MAS Notice 642: Specific notice from Monetary Authority of Singapore regarding motor vehicle loans and their requirements.

Road Traffic Act: Relevant for vehicle registration details and requirements in Singapore.

Stamp Duties Act: Governs the stamping requirements and duties payable on loan documents and agreements.

Teams

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