Car Loans guide in Malaysia

malaysia-car-loans

As you would have observed, many people in Malaysia cannot afford to pay for a car in cash, but there are still way too many cars on the road – yes – car loans. The public transport system has improved in the past years and is still progressively improving, but it seems that the convenient car loan packages which are readily available to almost everyone is a comfort only a minority would shy away from. Let’s just say you don’t have to go through a bumpy road to get a car of your choice. You can even buy a car with 0% down payment sometimes,although it’s 10% down payment usually. Having to pay 0% down payment means that you can buy a car by borrowing the full car price through a lender. That being said, here are some of the points to observe when looking for car loans in Malaysia. You can take a car loan for new and used cars. Car loans make cars appear magically in front of you for your immediate use in exchange for regular repayments over a period of time. Not really, but it’s so easy that it’s almost magical, but the repayments are in fact very real and include the principal payment and interest charges agreed upon between you and the lender.

Interest Rates

Take note that interest rates for car loans depend on the car type (national/non-national/new/used), the specific model (Myvi/Viva) and the varying rates charged by the lenders. The interest rates also vary according to the loan amount and financing tenure. Most local banks charge an interest rate of 2.5% p.a. to 3.1% p.a. for a loan amount of RM30,000 that is to be repaid within 5 years.

Eligiblity

The eligibility requirements for most car loans in Malaysia are quite standard. Basically, if you are a Malaysian citizen or permanent resident between the age of 18 and 60 years old with a fixed income or a guarantor if you don’t have a fixed income, then you will have no problem applying for the loan.

Insurance

Some car loans include Takaful coverage, and some do not. However, take note that an insurance or Takaful policy is compulsory for car owners. It is required by Malaysian Law that you keep your car insured until the payment of the car loan is complete. Make sure you remember to inform the bank about the renewal of the Takaful coverage or insurance 14 days before the expiry date of the policy.

Repayments

Loan repayments are usually made regularly between a period of 5 to 9 years, depending on the lender. Basically, the longer the repayment period or tenure, the lower the repayments, but the total interest charged will be higher. What happens when you don’t pay in time? The bank charges 8% p.a. penalty on the amount in arrears calculated daily. If you don’t pay for more than two months successively, the bank will give you a reminder, and if that reminder is not heeded, then the bank will repossesses your car. On a lighter note, some bank car loans such as Affin Islamic Hire Purchase-i  offer special rebates for early loan repayments.

Car loans are offered by most local banks and some car dealerships. For example, Toyota offers 90% financing (meaning that you have to pay 10% down payment) with a flexible repayment scheme and a 9 year tenure. Maybank offers three different types of car loans – Hire Purchase (finances up to 90% for new or used vehicles with a loan period of 9 years); Al-IjarahThumma Al-Bai (AITAB) which is a Sharia compliant car financing with a margin of finance of 90% and a loan period of 9 years as well. Maybank also has a car loan package for first time car owners called the My First Car Plan with repayments starting as low as RM268.

Types of car loans

The best car loan for you will depend a lot on what type of car you want to buy so I’ve summarised some of the best loans for different type of cars here. If Proton is your choice, then you should take up the Proton Commerce Standard Financing Package which is actually a joint venture with CIMB bank. The margin of financing for this car loan is up to 90% with the promise of a fast application and approval process.  However, if you are not sure whether to buy a new national or non-national car, then check out the Bank Rakyat Car Financing-iAnnaqlu which has an interest rate of 2.9% p.a. if you’re borrowing RM30,000 and repaying it within 5 years. Bank Muamalat’s Hire Purchase facility is also ideal for buying national cars, and it takes care of everything including Takaful coverage.

Some featured car loans for non-national cars are RHB Hire Purchase,  Maybank Hire Purchase, and BMW Credit. RHB Hire Purchase offers one of the lowest rates in the market for the year 2014. However, the main shortcoming is that the applicant’s monthly income has to be at least 3 times the monthly hire purchase instalment. Maybank’s Hire Purchase is not a bad deal either, but does not offer rates as good as RHB bank. If you’re planning on buying a BMW, then go with BMW Credit as it allows you the autonomy to choose the loan amount and tenure.

Car loan for fresh graduates ?

Fresh graduates should look out for the car loans offered by Maybank, Bank Islam and Bank Muamalat as they now offer a graduate scheme which is a car loan specifically designed for fresh graduates aged below 30 who are at least Degree or Diploma holders. Only first time car buyers are eligible for the graduate scheme. However, take note that the interest rate under this scheme is higher than a normal car loan. This is because banks have to deal with the financial risk that fresh graduates carry. So why would fresh graduates apply for this loan although the interest rate is higher? Fresh graduates would apply for the graduate scheme because their starting salaries will probably not meet the minimum requirement for a normal car loan.

In conclusion, if you’re thinking of taking a car loan, now is a good time to take one because Malaysian banks are about to increase the interest rates for car loans.  A few years ago, the interest rate increased to 4%. So don’t procrastinate any longer if a car loan is inevitable for you, and get yourself on the road, fast.

 

 

 

Best Education Loan in Malaysia

8-picture-study-loan-in-singapore

PTPTN Loan

The first option for most Malaysians thinking about taking a study loan is the PTPN loan (National Higher Education Fund). It is a study loan funded by the Malaysian government, and has a low interest rate of 1% p.a. (p.a. stands for per annum, which is Latin for per year).Basically, an interest rate of 1% p.a. means that if you borrow RM10,000, then you will owe the lender the original RM10,000 plus RM100 (per year) as an interest payment. If you take 3 years to repay the loan, you will have to pay RM10, 300. In terms of interest rates, the PTPN loan is the best option. However,if you are above the age of 45 (the age limit to secure a PTPN loan) or do not meet the stringent requirements of the PTPN loan, then your next best option is to get a loan from one of the banks in Malaysia.

Before we delve into the various study loans available in Malaysia, here are some important things to know about interest rates.There are two main types of interest rates: flat rate interest and compounded interest. Flat rate interest means that the same amount of interest will accrue each year. Some loans may charge compound interest (meaning that, if you do not pay off the interest payable per annum at the end of each year, a greater amount of interest will accrue the following year).

Another thing you should know about before taking a loan is the BLR (Base Lending Rate). BLR is a minimum interest rate calculated by financial institutions based on a certain formula. This formula takes into account the institutions cost of funds and other administrative costs. The BLR is adjusted by banks, but the rate actually is determined by Bank Negara Malaysia. The BLR for the year 2014 in Malaysia is approximately 6.85%, but every bank may offer a different package.

Now that we know the basics of taking a loan, let’s move on to the numerous types of study loans available.In Malaysia, study loans are usually funded by government bodies, financial institutions such as banks, orprivate corporations and organisations. Loans are also offered by some universities and colleges, but usually in partnership with a bank. Typically, a study loan covers a student’s tuition fees, cost of books and living expenses.

There’s an ocean of information out there on study loans, and it can be tough fishing them out. This article is going to save you the trouble of going deep sea fishing! Here’s the catch of the year.

 

Bank Study Loans

Study loans offered by banks may be the only option for those of us who have passed the age limit restrictions that government loans or scholarships prescribe to. It is important to note thatstudy loans are not offered by all banks. However, most banks provide personal loans which can be used to fund education.

The repayment period for most banks loans is about 10 to 15 years depending on the bank’s terms and conditions. Take note that most banks require a guarantor in order to be eligible for the loan.Listed below are some of the specific study loans offered by banks in Malaysia.

bankrakyat

Bank Rakyat Study Loan

Bank Rakyat is the biggest Islamic cooperative bank in Malaysia. The study loan offered by Bank Rakyat is called Education Financing-I Falah, and it finances up to RM200,000 for a maximum loan period of 15 years. However, under special circumstances that are subject to collateral value such as landed property and Bank Rakyat’s Investment Certificates, unlimited financing can be provided.

The type of interest rate offered by this loan is a flat rate. You will pay an interest rate of 7.6% p.a. (if you are able to repay the loan within 5-10 years). The interest rate increases to 8.1% p.a. (if you require 10-15 years to repay the loan).

The Bank Rakyat study loan finances education locally and abroad. In order to be eligible to apply for this loan, you have to be a Malaysian aged 18 and above, but not exceeding 65 years of age. Applicants are also required to have a fixed income. However, if you are a student, and do not have any income, you may apply through your parents, spouse, siblings or legal guardians.

 

Pros and Cons of the Bank Rakyat Study Loan 
Pros Cons
Bigger loan compared to PTPN (maximum RM200,000) Higher interest rate compared to PTPN
Funding NOT limited to Malaysian educational institutions only

 

ocbc

OCBC Bank Study Loan

OCBC offers a study loan called the Secured Study Loan that finances up to 50% of the value of a secured property, for a minimum loan of RM10,000 and a maximum loan of RM400,00 which is to be repaid withina period of 10 years. The main condition here however is that only OCBC housing loan customers are eligible to apply for it.

The type of interest offered by the OCBC study loan is variable rates. The loan offers an interest rate of BLR +0% (currently 6.6% p.a.) with no lock-in period. For example, if you want to borrow RM10,000 at a fix BLR of 6.6% and you plan to repay the loan over a 2 year period, you would have to repay RM11,320.

27 different local universities are covered by OCBC’s study loan. Please check the OCBC website for more information.

 

Pros and Cons of the OCBC Study Loan 
Pros Cons
Offers a large loan amount (maximum RM400,000), which depends on 50% of your property’s market value You are only eligible for the study loan if you are a housing loan customer
No age limit

 

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RHB Bank Study Loan

The RHB Study Loan funds full-time and part-time courses approved by the Ministry of Education and JabatanPerkhidmatanAwam for both local and overseas education. The loan covers course fees, related expenses and insurance premium. There are 2 loan packages available, the minimum coverage is RM20,000 and maximum is up to RM500,000.

Pros and Cons of the RHB Study Loan 
Pros Cons
Offers a large loan amount (maximum RM500,000).

cimb_personal_loan

 

CIMB Bank Study Loan

This loan is suitable for full-time or part-time students who want to study locally or overseas. It is important to take note that the course must be recognized by the Malaysian government.The loan covers a minimum amount of RM10,000 and a maximum of RM100,000 for a loan period of 10 years.

The terms and conditions of the CIMB study loan vary for full-time students and part-time students. For full-time students, only joint borrowers are eligible for this loan. This means that there has to be one co-borrower to support the student (who should be 18 years old and above). Acceptable co-borrowers are parents, siblings, relatives or guardians with sufficient repayment aptitude.

For part-time students, the student (18 years old and above) must provide one guarantor. Acceptable guarantors are parents, siblings, relatives or guardians with adequate repayment ability.

 

Pros and Cons of the CIMB Study Loan 
Pros Cons
Offers a small loan amount of RM100,000 (maximum) Joint borrowers are required for full-time students

UOB-logo

UOB Study Loan (or U Education Loan)

 

The UOB study loan offers interest rates from as low as 0.75% + BLR for secured loans. Thisstudy loan offers a minimum loan amount of RM15,000 and a maximum loan amount of RM150,000.  The repayment scheme is flexible – the minimum loan period is 3 years, and the maximum loan period is 10 years (can be up to 12 years depending on the course).The UOB study loan is available for both undergraduate and postgraduate students, however, the terms and conditions differ. For undergraduates to be eligible for this loan, they must be a U Club member, and a Malaysian aged between 18 to 25 years old. Undergraduates should be full-time students at an accredited educational institution, and have a co-borrower aged 55 years and below, and an income of RM36,000 (minimum) per year. The maximum amount of co-borrowers allowed is two.

Pros and Cons of the UOB Study Loan
Pros Cons
Low interest rate: 0.75% + BLR Restricted age limit: 18 to 25 years old
Flexible repayment scheme Age limit and income requirement of co-borrower

So that was the catch of the year in terms of the best bank study loans in Malaysia. If you’re still interested in fishing for more study loans, check out the article on ‘Government Loans in Malaysia.’

 

 

Public Bank FD Xtra Campaign

public fd extraGood news for those of you who have plenty of money and nowhere to park it. Public Bank and Public Islamic Bank have team up again to come with high interest Fixed deposit plan in Malaysia. This promotion was previously available and now being launched again due to overwhelming response.

For a limited time, you can save up with Public Bank’s PLUS Fixed Deposit or Public Islamic Bank’s Term Deposit-i and enjoy a high interest of 3.83% p.a for the first 6 months and a 4.28% p.a for the following month as a rollover bonus.

Eligibility

This promotion is opened to Malaysians who are 18 years old and above who are existing or new Public Bank customer.  Non existing individuals such as corporation, sole proprietary, partnership are also eligible for the promotion.

The two products which are under the promotion of the campaigns are Plus Fixed Deposit from Public Bank and Term Deposit-i from Public Islamic Bank.

How to Enter

To enjoy a 3.83% p.a interest or profit rate for the first 6 months. An individual will have to place a minimum of RM 20,000 capped at RM 10,000,000 and non-individual will have to place a minimum fixed deposit of RM 50,000 capped at RM 20,000,000 within the campaign period.

Terms

There are no overdraft availability for the products that qualifies under the promotion interest rates. One can enjoy a 3.83% p.a for the first 6 months and can enjoy higher 4.28% p.a as a rollover bonus on the next 6 months if he or she does not uplift the fixed deposit. The interest shall only be credited once on 6 months. These promotion may not be valid if a person makes withdrawals and partial withdrawal is not allowed during the campaign.

This promotion interest rates are only valid for any fixed deposit placement from 27 October to 28 February 2015 which is quite a long time, so hurry up to apply for it today if you are keen !