Car Loan
Know the Pro and Con about different Loan
There are several different ways that you can finance your car, and there are pros and cons about each of them.
Dealership
o Pros: Convenient, fast, sometimes competitive
o Cons: High pressure, usually not competitive; be prepared for a big sales push on add-ons; loans are often front-loaded.
Bank or Finance
o Pros: Competitive rates, personal service, no sales pitch for add-ons; often can tell you if you're paying too much for a car; often provide free life insurance or disability insurance with loans; loans are usually simple interest loans (interest spread evenly throughout the term of the loan)
o Cons: Not as convenient as dealership financing -- can't set it up at night or on the weekend.
Online financial institution (yes coming soon in Malaysia)
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o Pros: Usually competitive rates, quick, easy.
o Cons: Not a personal service; dealing with an unknown; some scams to watch out for.o Pros: Usually competitive rates, quick, easy.
Family member or friend
o Pros: Personal service, easy, sometimes flexible; usually competitive rates
o Cons: Could jeopardize a relationship.
Determining the Rate
The interest rate you get when financing a new or used car can vary quite a bit from the advertised rates you see on TV or read in the paper. Probably the biggest influence on your rate is your credit rating. Your credit history and credit score tell lenders a lot about your money habits and are designed to give them an idea of what their risk is if they loan you money. They often raise the interest rate if your loan is seen as high-risk.
Another thing that affects the rate you get is the length (term) of the loan. Typically, the shorter the loan, the lower the rate. Keep in mind that the shorter the term, the higher your payments will be.
Used cars will have higher rates than new cars. The newer the car, the lower the rate. (You may find an exception to this rule at some Bank. Some give the same interest rate for new and used cars.)
Your geographic location can also be a factor in the rate you get. Your cousin may have gotten 7 percent on the other side of the country, but in your home town, 8.5 percent may be the lowest rate you can find.
While these are the usual things that affect the rate you get through a bank or other financial institution, financing through the dealership may or may not actually work this way.
Document for Loan Application :
Identity Card
Malaysia Driving License
Pay Slip (3 month latest
Supporting Document (if any)
Bank Statement (3 Month Latest)
EPF Statement
EA Form
Employee Offer Letter
Certificate/Diploma/Degree
Guarantor: (For fresh Grad)
Identity Card
Pay slip (3 Month Latest)
Applicants are encouraged to submit all document needed support by extra
documents in order to get better interest rate and approval chances…
