What is a car loan?

A Car Loan or auto loan is a sort of personal loan that enables the potential purchaser to pay the car off on regularly scheduled instalments as opposed to paying all at once while purchasing. This implies that the loan provider or bank will pony up all required funds, while consequently, the borrower pays off the obligation on regularly scheduled instalments with the inclusion of interest rates.

Available Plans and Packages for a Car Loan

It has to be noted that car loan packages, interest rates, tenures – they all depend upon various external factors leading to the car loan. Here are some important ones among them:

Let us have look at HongLeong Bank’s car loan plans and packages, to understand the best case scenarios of a car loan in Malaysia. It is to be noted that the accompanying rundown applies for a new, second-hand or also reconditioned car.

Fixed Rate Financing

The financing is given at a fixed interest rate. This helps customers who want to plan their instalments ahead, without any major financial changes or surprises.  Even with major variations in the market, the interest rate does not surpass 10% p.a.  A customer should pay fixed, regularly scheduled payments. The late instalment charges on the amount in arrears are at an interest rate of 8% p.a. In addition, no additional penalty is charged on early settlement of the loan taken by the customer. Rather, the bank will offer an interest rebate refund to the client on doing as such.

Variable Rate Financing

This plan depends upon the Base Lending Rate (BLR), where the loan cost won’t surpass 17% p.a. On each BLR amendment or volatility, the loan cost will change. The late instalment charges are least 2% while no additional penalty is charged towards an early settlement of the loan acquired.

Car Loan Calculator

On the event where you are thinking hard whether or not to get a car loan, it would be helpful for you to first evaluate your salary and ability to repay the loan. It is better to acquire a car loan package that fits into your month-to-month spending plan, especially when you have other loans to repay. Because every loan taken is like procuring a significantly higher obligation that you already have. Hence, it is wise to use HLB’s Car Loan Calculator to get a loan estimate and know your financial eligibility.

Likewise, it is critical to consider the greater part of the extra expenses that will join the vehicle, for example – gas, service, taxes and car-related expenses.

Basic Eligibility for Car Financing

The eligibility criteria for car financing in Malaysia, in general, involves the following:

• The customers seeking loan ought to be no less than 21 years of age and not more than 70 years at the point of application.
• The sole proprietorships, private business organizations, and associations can likewise apply for this car loan – apart from employees and self-employed individuals.

Loan Repayment options

The car loan package comprises a host of repayment options available, in order to make sure that the whole process is customer-friendly.

• Standing Instruction Facility.
• Interbank GIRO.
• HongLeong Connect.
• CDM & ATM.
• HLB/HLISB branches in Malaysia.

Questions to be answered before acquiring a car loan

Finally, the self-introspection that needs to be done before acquiring a car loan are as follows. These pointers would equally help to acquire any sort of loan in Malaysia.

• Would I be able to manage the cost of the monthly repayment?

• Do I have the financial freedom to make an early settlement?

• What kind of a loan package (say, fixed rate loan) should I opt for, after weighing down my financial obligations?

After making a careful consideration about these car loan pointers, don’t wait on anything. Just whip on that dream car you were always passionate about!