With the inconsistency of our public transport system, it is likely to go around using a car. It is better to own your car and save time. Waiting around for public transport every day causes more fatigue to you. Frequencies of transportation also were ambiguous and never on time with the schedule. That is the function of car loan requirements in Malaysia, to help you buy a new car. It is not that hard to apply for it. As long as you understand the terms and conditions, it is likely to help you with buying a new car.
Car Loan in Malaysia
In Malaysia, almost 70 per cent of people use car loans when buying a new car. This is due to the high price of cars whether import or local car. Malaysians’ average annual salary is RM40k and above but the car price is RM120K and above. How could someone possibly buy a new car without any financial aid? Not to mention the car service every few months. Car insurance is also needed to protect your car whenever an unwanted incident happens. So, it is very relevant for Malaysians to have a car loan at least once in their life.
Important Terms in Car Loan to Understand
- Interest Rate – Total amount of money you borrow from the bank including the monthly interest rate. It would depend on the base rate of your loan which differs according to the condition of our economy. The total interest rate could be higher than the previous year or lower.
- Down Payment – This is the initial or first payment you would need to submit to the bank. This act as a guarantee you wouldn’t bail from the loan agreement. The price usually will be 10% of your car price. However, depending on the bank and the type of loan, the amount could be different.
- The Margin of Finance – This part of the document will show you the amount of money that the bank will pay for your car.
When you are reading the document, highlight every term that is unfamiliar to you. When consulting the bank officer, ask them to explain more in detail about these terms. It helps you to understand completely the loan you are taking.
When buying a car, your bank would probably ask you to have car insurance. This is to protect you and the bank from paying more to fix your car when an accident happens. Similar to life insurance, car insurance has a few levels of premiums that you can choose from. Car insurance also depends on the type of car you are buying. When buying car insurance, the insurer would check your history of driving as well. If you have a history of reckless driving or often receive tickets for your driving, it could be difficult for your application to be approved.
Consulting your insurer is also important when buying car insurance. Be sure to compare the different policies of different insurance companies. Choose the best for you and wouldn’t make a burden to your financial status.