Buying a used car or a pre-owned vehicle is a good way to save money. Many prominent banks in Malaysia offer car loans at competitive rates with easy monthly instalments. Read on to find out more about the best car loan for used cars in Malaysia.
Used Car Loan Interest Rate Malaysia 2018
The interest/profit rate for used car loans are subject to the loan amount approved and the tenure chosen. Some of the interest rates are mentioned below:
|Financing/ Loan||Interest Rate||Margin of Finance||Financing Period||Eligibility|
|Maybank Hire Purchase Loan||Starting from 3.4% p.a.||Up to 80% of seller’s invoice.||Up to 9 years||Malaysian citizens and foreigners.|
|CIMB Hire Purchase-i||Starting from 4% p.a. flat rate.||Up to 90%||Up to 9 years||Malaysian citizens.|
|Hong Leong Auto Loan||Below 10% p.a. flat rate||Up to 90%||Up to 9 years||Malaysian citizens.|
|Ambank Vehicle Loan||Base Rate [3.85% p.a.] + 1.50% p.a.||Up to 90%||Up to 9 years||Malaysian citizens|
The following are the top car loans for used cars in Malaysia:
- Maybank Hire Purchase: MayBank offers this car loan facility for new, used and reconditioned cars. The loan has easy payment options, competitive term changes, renewal of road tax and motor insurance as its benefits. The loan tenure is up to nine years and it has a high finance margin.
- Maybank Al-Ijarah Thumma Al-Bai (AITAB): MayBank offers this Shariah-compliant car financing which is based on the principles of Ijarah Thumma Al-Bai'. This car loan facility is for new, used and reconditioned cars. The loan can be repaid through multiple channels. This loan has 90% finance margin and the tenure is for 9 years.
- Hong Leong Auto Loan: This car loan by Hong Leong comes with easy repayment options, competitive loan packages, and motor insurance and road tax renewal services among others. This loan caters to new and used cars. The applicants can choose between fixed or variable rate finance packages. For fixed rate financing, the applicant is entitled to a rebate on the term charges. For variable rate financing, the settlement amount would be the outstanding amount due plus accrued term charges up to next payment due date.
- Hong Leong Islamic Auto Financing-i: This loan facility is based on Shariah contract of AITAB, which refers to a leasing that ends with the sale of the asset. This Islamic loan is provided at competitive rates that facilitate easier repayment of the loan.
- AmBank Islamic Arif Hire Purchase-i: This is a Shariah-compliant car loan facility that AmBank extends to its customers. It provides comprehensive insurance and Takaful coverage. It also provides a life plan that takes care of any outstanding amount of the car hire purchase financing, in the event of death or permanent disability of the borrower during the loan period.
- Individuals aged between 21 to 70 years.
- Business applicants like Sole Proprietorship, Partnership, Private Limited and Public Listed Companies
The following documents are required to apply for a car loan in Malaysia:
- A photocopy of NRIC (both sides).
- A copy of valid driving license.
- Payslips of last three months.
- Latest 3 months bank account statements where the salary is credited.
- A copy of the latest EPF/Income Tax statement
For Business Applicants:
- Business Registration & Form D.
- Latest six months bank statements.
- Business proprietor/partner(s) NRIC.
For Public Limited/Public Listed:
- A copy of the Certificate of Incorporation.
- Forms 24 & 49.
- Photocopy of Memorandum and Articles of Association (M&A).
- Business bank statements of last six months.
- A copy of director NRIC.
How To Apply
There are two ways to apply for car loans. They are mentioned below:
- Visit the nearest branch of the bank and submit the application form with the necessary documents.
- Go through the official website of the bank and complete the online application form. A bank representative will contact to carry the application process forward.
Q. Does Hong Leong Bank charge penalty fee if the loan is settled early?
A. There is no penalty fee for early loan settlement.
Q. When does a repossession take place?
A. A repossession occurs when there is:-
- Two successive defaults of monthly payment.
- Failure to pay the final instalment.
- Four successive defaults of monthly payment by the kin of the hirer; if the hirer is dead.
Q. When will be the ownership transferred to the customer or loan applicant?
A. Upon payment of final instalment of the sale price, the ownership of the car will be transferred to the Customer.
Q. Can the borrower have a co-borrower on the loan?
A. A borrower cannot have a co-borrower as this is prohibited. However, a guarantor can be provided if required.
Q. How can the borrower get a guarantor?
A. Under specific circumstances prescribed by the bank, the bank can request for a guarantor directly.
Q. What are the ways a borrower can make monthly payments?
A. A borrower can make monthly payment in the following ways:
- Interbank GIRO (MEPS IBG)
- Standing instructions
- Cash Deposit Machine (CDM)
- Bank branches
Q. Can the borrower modify the monthly repayment amount in case of financial difficulties?
A. This is subject to the bank’s discretion and the borrower should discuss the matter with the bank.