Car Loan BYTES FROM OUR KITCHEN

Car Loan In Malaysia

Planning to buy a new vehicle? Applying for a car loan will help you finance your purchase quickly. Most prominent banks in Malaysia offer new and used car loans at attractive rates of interest, up to 90% of the vehicle cost, to be precise. Take a look at the following table to compare car loan interest rates. You can also check if the eligibility criteria to see if you are applicable to apply for the loan.

Malaysia Car Loan Interest Rate 2018

Bank Interest Rate Tenure Finance Margin Know more
Affin Bank Malaysia

Affin Bank

3.85% p.a. (Base rate) Up to 9 years Up to 90% Check More
Bank Islam Malaysia

Bank Islam

2.90% p.a. - 3.60% p.a Up to 9 years Up to 100% * Check More
Bank Rakyat Malaysia

Bank Rakyat

2.50% p.a. - 15.00% p.a Up to 9 years Up to 100% * Check More
BSN Malaysia

BSN

2.53% p.a. - 3.15% p.a Up to 9 years Up to 90% Check More
CIMB Malaysia

CIMB

2.75% p.a. - 7.95% p.a Up to 9 years Up to 90% Check More
Hong Leong Malaysia

Hong Leong

10% (flat interest rate)

17% p.a. (floating interest rate)

Up to 9 years Up to 90% Check More
Maybank Malaysia

Maybank

3.40% p.a. – 4.50% p.a

Up to 9 years Up to 90% Check More
Public Bank Malaysia

Public Bank

3.52% p.a.

Up to 9 years Up to 90% Check More
Ambank Malaysia

Ambank

As per the bank’s discretion

Up to 9 years Up to 90% Check More
Al-Rajhi Bank Malaysia

Al-Rajhi Bank

As per the bank’s discretion

Up to 9 years Up to 90% Check More
Bank Muamalat Malaysia

Bank Muamalat

As per the bank’s discretion

Up to 9 years Up to 90% Check More
RHB Malaysia

RHB

As per the bank’s discretion

Up to 9 years Up to 90% Check More
Kuwait Finance House

Kuwait Finance House

As per the bank’s discretion

Up to 9 years Up to 90% Check More

Islamic Car Loan Interest Rates 2018

Bank Interest Rate Tenure Finance Margin
Affin Bank Malaysia

Affin Bank

6.71% p.a Up to 9 years Up to 90%
Hong Leong Malaysia

Hong Leong

10% (flat interest rate)

17% p.a. (floating interest rate)

Up to 9 years Up to 90%
Public Bank Malaysia

Public Bank

6.72% p.a

Up to 9 years Up to 90%
RHB Malaysia

RHB

Up to 12.00% p.a

Up to 9 years Up to 90%

Car Loan - Overview

Everything you need to know about car loans in Malaysia. Make the search for your car loan easier with these tools and guides.

types of car loan Types
car loan interest malaysia Rates
car loan calculator Calculator
car loan settlemengt Settlement
car loan glossary Glossary

Car Loan also known as Hire Purchase, is a type of financing plan available to individuals as well as institutions to help finance the purchase of a vehicle/car.

Types Of Car Loan

Classification On The Financing Principle Basis

On the basis of financing principles, there are two types of car loans available:

  • Conventional Car Loan: The conventional financing package with car loans provides customers with funds for a car purchase and charges an interest on the loan amount. The customers then repay on a monthly instalment basis for an agreed upon loan tenure. The conventional car loan can have fixed or floating rates (for example: base rate) of interest with the funds obtainable through it.
  • Islamic Car Loan: The Islamic car loan works on Islamic banking principles like tawarruq and AITAB (Al Ijarah Thumma Al Bai’). The profit rates associated with Islamic car loan are based on base lending and base financing rates.

Classification On The Car Type Basis

On the basis of the type of the car, the car loan can be classified into the following types:

  • New car loan
  • Old/used car loan
  • Reconditioned and unregistered car loan

Features & Benefits Of Car Loans

The following is the list of features and benefits associated with car loans:

  • Car loans provide the customers with funds ranging from 70-100% of the price of the car.
  • The customers can choose from a flexible range of financing for car loans that can be extended to 9 years.
  • The car loans, both conventional and Islamic, come with a competitive range of financing rates.
  • The car loans are available for new, used, as well as unregistered and reconditioned cars.
  • Borrowers can make the loan repayments via easy payment modes such as interbank GIRO, ATMs, or by placing standing instructions among many others.
  • Most of the car loans come with a low processing time and a fast approval.

Banks/Financial Institutions Offering Car Loans In Malaysia

car loan in malaysia

Let’s take a look at the list of banks and financial institutions that offer car loans in Malaysia:

  • Affin Bank: Affin Bank provides customers with two categories of car loans, Hire Purchase and Islamic Hire Purchase. Both types of car loan offer a high margin of financing of up to 90% of the car’s price. The Affin Bank Car Loan comes with a maximum repayment tenure of 9 years and easy repayment methods like ATMs, CDMs (Cash Deposit Machines), interbank GIRO, cheque deposit machines, standing instructions and many more.
  • Al-Rajhi Bank: Al-Rajhi bank offers two auto financing packages that include Auto Financing-i and Superbike Financing-i. The loan comes with a high margin of financing of up to 90% of the vehicle’s price with a maximum tenure of 9 years.
  • AmBank: The two types of car loans provided by AmBank are AmAUTOMate and AmBank Islamic Arif Hire Purchase-i. AmAUTOMate works on conventional principles of vehicle financing, whereas AmBank Islamic Arif Hire Purchase-i works under Shariah principle of AITAB (Al Ijarah Thumma Al Bai). The loan provides financing up to 90% of the vehicle’s price with a flexible financing period that can be extended up to 9 years. The facility also comes with convenient repayment modes like online banking, ATMs, CDMs and many more.
  • Bank Islam: Bank Islam Car Loan has auto financing packages for different customers with different vehicle needs. These packages are Bank Islam Vehicle Financing-i, Bank Islam Vehicle Financing-i GradHitz, and Bank Islam Superbike Financing-i. With a high margin of financing offered, i.e. up to 100% of the OTR price of the vehicle (for Bank Islam Vehicle Financing-i Gradhitz), the facility also lets the customers choose from a flexible repayment tenure.
  • Bank Muamalat: Bank Muamalat provides customers with two car loan plans, i.e. Bank Muamalat Hire Purchase-i and Bank Muamalat Vehicle Financing-i GradPack. The packages are designed to suit the needs of customers who are looking to purchase any national or non-national car. With a maximum financing tenure of 9 years, the facility offers funds of up to 90% of the vehicle’s price.
  • Bank Rakyat: The packages offered are Bank Rakyat Auto Hire Purchase Financing-i (An Naqlu 1), Bank Rakyat Auto Hire Purchase Financing-i (An Naqlu 2), Bank Rakyat Superbikes Hire Purchase Financing-i, and Bank Rakyat Auto Financing-i Motorcycle. The packages come with a high range of financing for the purchase of vehicles and a wide range of repayment tenures to choose from.
  • Bank Simpanan Nasional (BSN): BSN offers car loans to customers with both conventional and Islamic principles. BSN MyAuto and BSN MyAuto High Ranking Officials Scheme are the two plans offered by the bank. Both the plans come with their Islamic alternatives and offer up to 90% of the price of the vehicle in the form of funds for vehicle purchase. The repayment tenure for both the financing schemes is extendable to 9 years.
  • CIMB Bank: CIMB also offers conventional as well as Islamic car loans to its customers. Available by the names Hire Purchase and Hire Purchase-i, the auto financing facilities help customers obtain funds for vehicle purchase. The CIMB Car Loan comes with a high percentage of financing that is up to 90% of the vehicle price and a maximum tenure of 9 years.
  • Hong Leong Bank: Hong Leong Bank offers customers with two auto financing packages, Auto Loan and Auto Financing-i. The customers can obtain a high margin of financing for purchasing of new as well as used passenger and commercial vehicles via both the packages. The repayment tenure for the Hong Leong Bank Car Loan can be extended up to 9 years.
  • Kuwait Finance House: Customers can get funds for the vehicle purchase under the Automobile Ijarah-i facility for up to 90% of the vehicle’s price with up to 9 years of financing tenure.
  • Maybank: Maybank Car Loan comes with three kinds of financing packages namely Hire Purchase, Al-Ijarah Thumma Al-Bai, and My First Car Plan. Coming with both conventional as well as Shariah principles, the Maybank Car Loan offers the customers with a high margin of financing, i.e. up to 90% of the vehicle’s price. The customers can opt for any financing tenure from a range of tenures with a maximum limit of 9 years.
  • Public Bank: The Public Bank’s AITAB Hire Purchase provides the customers up to 90% of the price of a passenger as well as a commercial vehicle. The facility comes with convenient modes of repayment and a financing tenure that can be extended to 9 years.
  • RHB: RHB offers three auto financing packages namely Hire Purchase, Hire Purchase-i, and Vehicle Financing-i. The auto financing packages give the customers a high range of financing of up to 90% of the price of the vehicle. The customers can also opt to choose from a wide range of financing tenures available for up to 9 years.

Car Loan Eligibility Criteria

The eligibility depends upon a list of factors like customer’s legal capacity, credit character, payment behaviour in the past, and the bank’s specific requirement. The following are the basic car loan application process requirements:

nationality criterion Nationality Criterion
Most of the car loans are designed only for the Malaysian citizens. The car loans that are open for the foreigners too generally need them to be accompanied with a local guarantor.
age criterion Age Criterion
The individual’s applicants applying for a car loan must be at least 18 years old at the time of application and should not be older than 60 years (or the designated retirement age) before the maturity of the facility.
employement criterion Employment Criterion
The employment requirement may vary from bank to bank and package to package. The salaried employees, self-employed individuals, sole proprietorships, partnerships, private limited companies, and public listed companies can apply for a car loan.

Documents Required For A Car Loan

The car loan process may require a different set of documents depending upon the type of applicant and the car loan package. Let’s take a look at the different type of documentation required for different type of customers:

  • For fixed salary earning individual applicants:
    • A copy of NRIC (both sides).
    • Copies of salary slips for the last one to six months.
    • A copy of driving license.
    • Bank statement or passbook statement for the past 1-6 months.
    • Latest EPF statement or EA form.
    • Employment confirmation letter from the employer.
  • For sole proprietors, partners of a partnership, and self-employed individuals:
    • A copy of NRIC (both sides).
    • Business registration certificate.
    • A copy of driving license.
    • Bank statement for the last 3 to 6 months.
    • A relevant business income proof document.
    • Latest Borang/BE with validated tax payment receipt to LHDN.
  • For public listed companies:
    • Latest form 24 and 49.
    • Latest audited annual financial statement.
    • Performa invoice and registration card in case of an old or used car purchase
  • For private limited companies:
    • Latest form 9, 13, 24, and 49.
    • Last 3 to 6 months bank statements.
    • Management profile and profile of the company’s directors.
    • Certified true copies of Memorandum and Articles of Association.
    • Copy of Certificate of Commencement of Business.
  • For foreigner applicants:
    • Passport.
    • A copy of contract letter or employment letter.
  • For purchase of an old/used car:
    • A copy of NRIC of the seller if the seller is an individual.
    • Registration card.
    • Performa invoice.
    • A copy of driving license of the seller if the seller is an individual.
  • For the guarantor (wherever required): The car loan application process may require a guarantor in some cases. With many car loans, the process generally requires applicants to bring a guarantor if the applicant does not meet some of the eligibility criteria. The guarantor may be asked to bring one or multiple documents from the following list to the application process:
    • A copy of the NRIC.
    • Copies of salary slips for the last 1 to 6 months.
    • Employment confirmation letter from the employer.
    • Latest EA form or latest EPF statement.

How To Apply For A Car Loan

  • Offline Application: The car loan application can be approached by visiting the nearest branch of the bank one chooses to opt for. The application form needs to be filled with required details and submitted along with the supporting documents. The customers can also choose to reach out to the bank via its customer service numbers or hotline numbers and put in their request for a car loan.
  • Online Application: Applying for a car loan can also be done by visiting a bank’s official website and filling out the application form available online with the required details.

Car Loans for Used Cars

Investing in a used car will save you a lot of money. You only pay the quoted price and there are no hidden charges. If you are looking for used car loans in Malaysia, you will find a lot of major banks providing them at affordable rates with flexible repayment options. Take a look at some of the used car loans offered in Malaysia.

Car Loan Interest Rates For New & Used Car's

  Interest Rate/Profit Rate
Bank Name
Product
New Car
Used Car
Affin Bank Conventional Hire Purchase Pegged to base rate at 3.85% p.a. flat Pegged to base rate at 3.85% p.a. flat
Affin Islamic Hire Purchase-i Pegged to base financing rate at 6.71% p.a. Pegged to base financing rate at 6.71% p.a.
AmBank AmAUTOMate 4.50% p.a. 4.50% p.a.
AmBank Islamic Arif Hire Purchase-i Pegged to bank’s base financing rate. Pegged to bank’s base financing rate.
Bank Muamalat Hire Purchase-i Depends upon the current Bank’s prevailing rates. Depends upon the current Bank’s prevailing rates.
CIMB Hire Purchase 2.75% to 4.70% p.a. 4.00% to 7.95% p.a.
CIMB Hire Purchase-i 2.75% to 4.70% p.a. 4.00% to 7.95% p.a.
Hong Leong Auto Loan Fixed rate: Up to 10% p.a. Fixed rate: Up to 10% p.a.
Floating rate: Up to 17% p.a. Floating rate: Up to 17% p.a.
Hong Leong Islamic Auto Financing-i 3.78% flat 3.78% flat
Maybank Al-Ijarah Thumma Al-Bai 3.40% to 4.10% p.a. flat 4.25% to 4.50% p.a. flat
Maybank Hire Purchase 3.40% to 4.10% p.a. flat 4.25% to 4.50% p.a. flat
Maybank My First Car Loan As per bank’s discretion. As per bank’s discretion.
Public Bank Aitab Hire Purchase-i Pegged to base financing rate at 6.72% p.a. Pegged to base financing rate at 6.72% p.a.
Al Rajhi Superbike Financing-i As per bank’s discretion. As per bank’s discretion.
Al-Rajhi Automobile Financing-i As per bank’s discretion. As per bank’s discretion.
Bank Islam GradHitz Vehicle Financing-i 2.90% to 3.60% p.a. NA
Bank Islam Vehicle Financing-i 2.90% to 3.60% p.a. NA
Bank Muamalat Muamalat Vehicle Financing-i GradPack Depends upon the current Bank’s prevailing rates. NA
Bank Rakyat Auto Hire Purchase Financing-i 2.80% to 3.50% p.a. NA
Bank Rakyat Vehicle Financing-i Up to 15.00% p.a. NA
BSN Hire Purchase 2.53% to 3.15% p.a. NA
BSN Hire Purchase-i 2.53% to 3.15% p.a. NA
Hong Leong Mach Cruise Control Car Loan As per bank’s discretion. NA
KFH Automobile Ijarah-i As per institution’s discretion. NA
RHB Hire Purchase As per bank’s discretion. NA
RHB Vehicle Financing-i Up to 12.00% p.a. NA

Car Loan Repayment Calculator

The monthly repayment instalment of a car loan calculation depends upon the total approved financing amount, the profit or interest rate associated with the plan, and the length of the financing tenure.

For a fixed rate car loan, the monthly instalment can be calculated using the following formula:

M = [A + (A x R x T)] / t

Where M = Monthly instalment; A = Total financing amount approved; R = Profit rate or interest rate; T = Financing tenure in years; t = Financing tenure in months.

Guide To Choose The Right Car Loan

Before a customer opts to get a car loan, he/she needs to keep some factors in mind. The following is a guide to choose the right car loan:

  1. Type of Car: Before opting to apply for a car loan you must decide on whether you wish to purchase a new or used car. Choosing the right car can decide on how much financing you are eligible for.
  2. The Financing Margin or Loan Amount: After settling on the car, the next thing to focus on is how much financing is needed for the same. You must decide the right amount that can not only help you finance the purchase of the vehicle but also one which you can pay back with ease.
  3. Financing Term: You must settle for a financing term. Longer terms will carry lower instalments but keep in mind, you would be paying more in interest over the long run.
  4. Interest Rates/Profit Rates and Repayment of the Facility: One of the biggest contributing factors to the affordability of the loan is the interest or profit rate of the loan. Choose a loan which offers a competitive rate of interest such that instalments can be paid with ease.
  5. Processing Time and Fees: Another factor to be considered before opting for a car loan is the time taken to get the application approved. Some banks offer faster approval and disbursal times but might come with higher interest rates.
  6. Miscellaneous Factors: Check the fine print of the loan. See if it offers value-added services with the facility such as road tax renewal and motor takaful/insurance coverage. Also, certain banks grant rebates with early settlement on the facility and do not charge any early settlement fees.

Q. What are the factors that affect the financing amount associated with a car loan?

A. The approved amount of a car loan depends upon the following factors:

  • Type of the car
  • Age of the car
  • Income of the applicant
  • Credit score of the applicant
  • Debt to income ratio

Q. What is the difference between fixed and floating rates of interest associated with a car loan?

A. With a fixed interest car loan, the monthly repayment instalments will be fixed and known from the beginning of the loan period. But the floating rates of interest depend upon the base rate of the bank and market conditions. Thus floating rate of interest may change during the loan period, that might imply a change in the amount of monthly repayment instalment amount.

Q. What are the factors that affect the interest rate or profit rate associated with a car loan package?

A. This mainly includes credit history and a credit score of the applicant, monthly income and debt-to-income ratio of the applicant, the car’s type, model and age, down payment paid for the car, and tenure of the loan. The interest/profit rates can also vary with a change in market conditions and the base rate or base financing rate of a bank.

Q. Is it mandatory for one to have a savings or current account with the bank offering the car loan?

A. No. It is not compulsory for the customers applying for a bank’s loan package to have a savings or current account with the bank.

Q. How much time does a car loan process take for approval?

A. Once an applicant fills out the car loan application form and submits it to the bank along with the set of required documents, the bank will check the validity of the documents. After successful validation, the bank will contact the customer with the details regarding the loan.

Q. What are the ways in which I can make repayments on my car loan?

A. The repayments for a car loan can be made via interbank GIRO, by placing standing instructions, or by making an over-the-counter payment at the nearest branch of the bank or financial institution that has offered the car loan.

Q. What are the kind of charges I have to bear with a car loan?

A. Depending upon the car loan package, you can be charged with the registration fee, processing fee, stamp duties, insurance or takaful coverage charges among others.

Q. When do I get the ownership of the vehicle with a car loan?

A. With a hire purchase facility, the ownership of the vehicle will be transferred to you once you complete the repayment of the loan.

Q. Does a car loan application process require one to be accompanied with a guarantor?

A. The requirement of the guarantor may vary from application to application. The customers not meeting the bank’s terms and conditions may be asked to bring a guarantor to the application process. Specific bank car loan packages that are open to foreigners may also require a local guarantor during the application process.

Q. Should I take the motor insurance coverage or takaful coverage with my car loan?

A. For most of the banks, it’s mandatory for you to get the motor takaful/insurance coverage on your car loan as per the Hire Purchase Act 1967.

Q. What if I miss to pay a monthly repayment instalment on my car loan?

A. In case you miss timely payment on an instalment, you will be charged with late payment charges. Depending upon whether the car loan package is under conventional financing principle or Islamic principle, the charges may differ. The following are the late payment charges associated with car financing packages under both the principles:

Conventional car financing: Up to 8% of the overdue instalment amount.

Islamic car financing:

  • During the financing facility period: 1% of the overdue instalment amount on a daily basis.
  • After the maturity of the financing facility: Determined by IIMM rate.

Where IIMM = Islamic Interbank Money Market.

Q. Am I allowed to partially pay the monthly instalment with my car loan?

A. No. The banks or the institutions offering a car loan don’t allow their customers to pay the monthly instalment partially. You are advised to pay the agreed upon amount on or before the due date every month.

Q. What happens if, during the loan facility, I decide to pay the entire outstanding principal at once? Will the bank allow me to do the same?

A. Most of the banks allow their customers to make an early settlement on the car loan.

Q. Is there a benefit associated with an early settlement on my car loan?

A. Most of the banks offer a rebate to the customers with an early settlement of their financing facility. The rebate is calculated on the unutilised portion of the total tenure.

Q. How is the monthly repayment instalment calculated with a car loan package?

A. The monthly repayment instalment for a loan package is based on a flat interest/profit rate is calculated using the following formula:

M = [P + (P x R x T)] / t

Where M = Monthly instalment amount; P = Total approved financing/loan amount; R = Interest rate or profit rate; T = Financing/Loan tenure in years; t = Financing/loan tenure in months.

Q. What is a 24-month instalment?

A. A 24-month instalment means a car loan repayment tenure ranging up to 24 months. You can pay your instalments over the plan for 24 months/2 years.

Q. How do you calculate hire purchase?

A. You can calculate the rates and instalment amount for your hire purchase facility with the use of a calculator tool available on many banks’ websites and comparison sites. In this tool, you will have to include the price of your car, down payment amount, tenure of the loan, and applicable interest rate to get the amount for your monthly repayment.

For example,

Consider that ‘A’ is your loan amount and ‘B’ is the loan tenure (in years). Here, the interest/profit rate applied is ‘C’.

Using this formula, the total interest, monthly interest, and monthly instalment of your car loan is as follows:

Total interest = C/100 x A X B= X

Monthly interest = X / (B x 12)

Monthly instalment = (A + X) / (B x 12)

Q. What is the down payment on a car?

A. A down payment on a car is the amount you pay in advance while buying a new car. The remaining amount can be paid with a hire purchase or car loan facility borrowed via a bank or financing institute. This borrowed amount other than the down payment made needs to be paid back to the bank in set monthly instalments and with applicable interest/profit rates.

The hire the down payment you make, the lower will be the loan amount and monthly instalments. These days, many financing institutes offer ‘zero down payment’ facility while buying a new car. However, this provision can make you pay more as an interest throughout your loan tenure as your loan amount will be more.

Q. What kind of credit score do you need to buy a car?

A. When you are getting a loan to buy a car, you need a good credit score to have the loan approved. Approval or disapproval of a loan along with the amount of loan offered depends upon your credit history. A good credit score ranging between 697 and 850, can fetch you a car loan much quicker than an average or bad score. If you do not have a good credit score, your application might get rejected.

Q. How much should I spend on a car based on salary?

A. Buying a new car is quite expensive in Malaysia. Buying a new car means inevitable monthly expenses like fuel, monthly instalment, parking and maintenance charges, to name a few. So what is the best way to invest in a new car?

Analyst Michael Kling shares in his finance blog that you should stick to the 20/4/10 rule while purchasing a new car. Which means, you should make a down payment of 20% and the loan tenure should not be more than 4 years. Moreover, based on your monthly salary, you should not spend more than 10% of your gross income for a new car.

This rule offers a balanced way of spending on your dream vehicle without having to burn a hole in your pocket.

Q. Do you need a down payment to lease a car?

A. While buying a new car, you will have to make a down payment of around 10% of your car’s price. However, at the time of leasing a car, you may need to pay a security deposit in the form of a down payment. The security deposit is usually much lower than the down payment. Moreover, it will also be refunded to you at the end of the lease if no damage to the vehicle is incurred.

Q. How much do I need for a down payment?

A. To make a down payment for your car purchase, you may have to shell out 10% of the price of your car. Which means, if your vehicle is worth RM60,000, you may have to make a down payment of RM6,000.

Q. Do you get your down payment back on a car lease?

A. While leasing a car, you pay a down payment in the form of a security deposit. At the end of your lease, you can get this deposit back if you return the vehicle undamaged. However, if there is any damage incurred to the vehicle, the amount needed for its repair will be deducted from your deposit. The remaining amount will be handed over to you at the end of your lease tenure.

Q. Can I get a car loan with a credit score of 700?

A. By the standards of CTOS, 700 is considered as a good credit score. CTOS is also widely used by financial institutions to decide an applicant’s creditworthiness while approving their loan application.

Therefore, if your credit score is falling between 697 and 717, you should get a car loan. However, other eligibility criteria, such as age, nationality, etc. are also considered while approving a loan request.

Q. How can I raise my credit score in 30 days?

A. There is no hard and fast remedy that you can use to improve your credit score in a short period of time. However, you can consider the following tips if you want to boost your credit score:

  • Pay off your debts and overdue loan instalments. Clear out any late payments.
  • Negotiate with your bank to raise your credit card limit.
  • Get a joint applicant, co-signer, or a guarantor that has a good credit score.

Q. What does zero interest mean when buying a car?

A. 0% interest rate or zero interest means you do not have to pay any interest while buying a car. You may have to make a down payment while buying a new car and later on, you make monthly installments that come without any interest.

Compare and Apply for best Housing Loan Online
reTH65gcmBgCJ7k
This Page is BLOCKED as it is using Iframes.