If you really think about it, it's easier getting a loan for a car than a loan for bus fare!
  • Best Islamic Bank Car Loans In Malaysia

    A car loan is one of the types of loans an Islamic bank offers. Each Islamic bank operates over different concepts of Shariah principles. These banks offer affordable profit rates to reduce the burden of repayment for loan applicants. Also, Islamic car loans are processed quickly to increase the speed of loan disbursement. Given below is a list of best Islamic car loans available today along with the other necessary details:

    Affin Islamic Bank Hire Purchase-i

    Hire Purchase-i is a vehicle financing facility that works on the Shariah concept of Al Ijarah Thumma Al Bai (AITAB). The loan process takes a series of different steps where the applicant figures out the vehicle they want to buy. The applicant then seeks Affin bank’s support for financing. Affin bank buys the vehicle and lends the vehicle to the applicant for rent. The applicant has to pay the rent or the loan instalment regularly to finally own the vehicle.

    The applicant has to mandatorily purchase Takaful Coverage for the duration of the financing term. The bank offers a fixed rate of interest, 2.92% p.a., throughout the loan term.

    Hong Leong Islamic Bank Auto Financing-i

    Hong Leong Islamic Bank provides car loans at a competitive rates which reduces the monthly instalments that has to be paid. Once the applicant submits the application form with all the necessary documents, the bank assures of fast approval of the loan. The loan amount and the tenure varies based on the age of the car. For a new car, an applicant can receive up to 90% of financing margin. The customer can have a loan tenure that ranges between 84 months to 108 months.

    Maybank AITAB

    Maybank follows the AITAB principles i.e., the bank first gives the car to the loan applicant on lease; once the loan is completely repaid, the car is sold to the applicant. The bank processes and disburses loan applications fast offering convenience to the applicants. Financing can be acquired on a new, second hand or reconditioned cars. In addition, the bank also eases the task of renewing the road tax and motor takaful for the cars. The financing amount provided by Maybank on a new car can be as high as 90% of the cost of the car. In cases of a used car or unregistered reconditioned cars, the margin can be 85% or 90% of the car value. The applicant can enjoy a loan tenure of 108 months for the repayment.

    RHB Islamic Vehicle Financing-i

    RHB provides car loans under Vehicle Financing-i scheme with a variable rate of profit. The bank uses Reducing Balance Method to calculate the profit. According to Shariah guidelines, the bank buys the car and hires it to the applicant. The bank provides personalised service to the customers at reasonable rates. The applicant can receive financing of up to 90% of the car value. In addition, the applicant can have a tenure as long as 9 years to repay the loan to the bank.

    In regard to securing the car, RHB has made it mandatory to obtain Motor Takaful when an individual applies for Vehicle Financing-i. The effective profit rate of RHB is around 5% p.a. An individual looking for a car loan can determine the monthly instalment payable to the bank by making use of the Car Instalment Calculator provided on the official website of RHB. The website also incorporates an option called Car Affordability Calculator, where an individual can find out if a car is affordable or not.

    Bank Islam Vehicle Financing-i

    Bank Islam offers a car loan to its customers under the contract of Murabahah. The actual mechanism starts with the bank appointing a customer as the agent to purchase a car. The customer purchases the car on the behalf of Bank Islam. Then, the car is sold to the same customer and the customer pays the cost of the car in monthly instalments to the bank. Until the customer repays the complete cost of the car, the customer must pledge the car to the bank as security.

    One can have a financing repayment tenure of up to 9 years. The bank usually provides up to 90% financing for the car. In special cases, the bank may provide up to 100% financing as well. The bank offers fixed rates for car financing and the rates vary for national and non-national models. Since the car is pledged as collateral, a guarantor may or may not be required.

    Fees & Charges

    Some of the fees and charges for new/used/reconditioned cars applicable during the loan procedures are given below:

    Photocopy Fees RM10.60
    Photography Charges (New Reconditioned Cars) RM10.60
    Stamp Charges (without guarantor) RM20.00
    Stamp Charges (with guarantor) RM60.00
    Road Tax Renewal RM10.60

    The bank may impose travelling charges to inspect the car based on the distance travelled. The distance can be within 10km or can go beyond 90km. The charges for these cases can start from RM10.00 and can go up to RM120.00.

    Eligibility Criteria

    The following are a few eligibility criteria to get the financing from most of the banks:

    • The minimum age of the individual to qualify for the car loan must be 18 years.
    • By the end of the loan tenure, the individual must not exceed 60 years.
    • The applicant must be a Malaysian citizen only.
    • The applicant must have a fixed income to get the loan.
    • An applicant who is an employee of private or public listed companies is eligible to get the car loan.

    Documents Required

    Salaried Applicants:

    • A copy of NRIC
    • A copy of Driving License
    • Salary slips of recent 3 months
    • EPF statement of recent 6 months
    • Bank statement of recent 3 months
    • Letter of Employment

    Self-Employed Applicants:

    • A copy of NRIC
    • A copy of Driving License
    • Bank statement of recent 3 months
    • Form 9, 24, 49 or Business Registration

    How To Apply

    Banks offer two modes to apply for the Islamic car loan:

    • Offline Application: Offline Application mode is the one where the individual has to appear in one of the branches of the bank to initiate the loan application process. The individual has to fill a physical application form and provide all the required documents at the bank.
    • Online Application: The other mode to apply for a loan is the online mode. An individual must visit the official webpage of the bank from which the loan is sought. An online application form will be available on most of the banks’ websites. The individual can fill the application and submit it online. The bank representatives will then contact the applicant within 2-3 business days to carry the application process forward.

    FAQ's

    Q. What is the minimum age for an applicant to qualify for an Islamic car loan?

    A. The minimum age to qualify for an Islamic car loan is specified as 18 years. Some banks may require the loan applicant to be at least 21 years to be eligible for an Islamic car loan.

    Q. What is the general loan repayment tenure offered by the banks?

    A. Banks offer 7 to 9 years of loan repayment tenure for car loans.

    Q. Is providing a guarantor mandatory to get the car loan?

    A. A guarantor may or may not be required to get the car loan. It solely depends on the applicant’s salary, the car value, the loan amount and other factors. One has to specifically visit a bank’s branch and discuss with the bank’s representatives to find out if a guarantor is required for their application.

    Q. Is the loan provided only for a new car? Does the car loan consider a used car?

    A. The car loan is provided for new/used/unregistered reconditioned cars.

    Q. What is the lowest profit rate at which a car loan can be taken?

    A. The lowest profit rate can be 2.80-2.92% p.a. as stated by the banks on their official websites. These rates are subject to change. A loan aspirant can check with the bank for accurate information.

    Q. If the applicant defaults on the payment of monthly instalments, does the bank claim it from the guarantor?

    A. Yes. There are possibilities that the bank will claim the payment from the guarantor. This can happen when applicants default on two or more consecutive payments.

    Compare Best Car Loans in Malaysia
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