Dream car? ✓ Shortlisted!
Car inspection? ✓ Passed with flying colours!
Test drive? ✓ Smooth sailing!
Loan approval? Ummm…
Purchasing a car involves a substantial amount of money, and mostly you need a car loan. Be it second hand or new, applying for a car loan is a must-do on your checklist unless you have tens of thousands of cold hard Ringgit.
Hire Purchase Car Loan: What Is It?
In Malaysia, hire purchase is the most common car loan. The buyer (you) will take out a hire purchase loan from the lender (the bank) to buy a car.
Although you are the primary user of the car, you are not its legal owner yet – the bank is, as they leased the car to you for hire, like a temporary lend.
Fortunately, once you fully repay the loan, you will become the rightful and legal car owner! However, if you can’t make the payments on time, the bank can repossess the car and leave you car-less.
How To Calculate And Apply For Car Loan With Mudah Certified
With Mudah Certified, it’s easy to calculate the monthly installment for a car and get pre-screened for a loan! All you have to do is look for a car you’re interested in and let us do the work.
4 Steps To Calculate Your Monthly Repayment And Apply For Car Loan
1. Search Mudah Certified for a car you’re interested in purchasing and click on it.
2. A loan calculator will appear below the car listing. Expand it to adjust the car price, downpayment, interest rate, and loan period to get an estimate.
3. Once you’re satisfied, click on the banner below the Loan Calculator and get your loan pre-screened by our panel banks. You’ll also get to compare the various interest rates offered and monthly instalment amounts.
The normal interest rate for used cars in Malaysia is around 3.5%, but also depends on your creditability. Don’t forget to check out our ongoing offers with attractive interest rates from selected banks.
4. Select the panel bank you want to apply for and fill in the remaining information. Submit the form, sit tight, and wait for our call!
Required Documents For Car Loan Application
The standard loan documents to buy a used car in Malaysia are:
- A copy of your Identification Card
- A copy of your driver’s license
- Bank statements from the last 6 months
- A copy of your recent 2-6 months of your official salary slip
- A copy of your most recent EA or EPF Statement
- A letter of Employment Confirmation from your employer
- The car grant of the used car you’re purchasing
Different banks may have individual requirements and documentation, so enquire beforehand.
2 Things To Do Before Applying For A Loan
Spoiler alert: It requires math.
1. Calculate what you can afford
You should be able to repay the amount you borrow every month with no issue. But the cost doesn’t stop there: petrol, tolls, car maintenance, and repairs must be considered and calculated to get a good idea of how much the car costs.
2. Check your credit score
Financial institutions consider everything you have before approving your loan – outstanding debt, credit card repayments, monthly salary, existing loans, etc. Typically, they will ask for a copy of your CCRIS/CTOS score to evaluate your finances.
To reduce the chances of loan rejection, check your credit score before applying so you know its health and have time to improve it. A good score means better odds of getting approved, which means one step closer to your dream car!
Car Loan Rejected? Here’s What To Do
There are many reasons your car loan could be rejected, like if the car is too expensive for your current income, you have too much outstanding debt, or due to the bank’s strict borrowing criteria.
Alternatively, you can try reapplying for the loan later on (although it might take 3-6 months), or with a different bank, or get a guarantor to support your creditworthiness.
Above all, identify the reason for your loan rejection and seek advice from a trustworthy individual or salesperson to assist you. Remember – if you don’t know why you were rejected, you won’t know where to improve!