Malaysia: The Best Car Loan In Town

Every car loan facility touts great financing packages, as if theirs is the best one around. Is one really any different from another?

In Malaysia, hire purchase packages across most banks are usually up to nine years with a 90% margin of finance. Interest rates range from 2.3% to 3.0%, depending on the loan amount and loan period. At a glance, the monthly repayment doesn’t differ much from one loan facility to another.  For instance, if you take out a loan of RM140 000 spanning 9 years to purchase a Toyota Camry, the monthly repayment is RM1570 and RM1632 based on interest rates of 2.35% and 2.88% respectively. The variation of RM62 a month may seem like chump change to one who can afford to purchase a Camry. However, the total interest paid by the end of the loan term would be a difference of RM6678. For those who like to think of long-term uses of their money, the savings can fund an in-car entertainment system, auto-detailing and, perhaps, four new tires.  image source: carvana.com

For car buyers who are more interested in the ease of monthly payment, then a few loan facilities are beginning to explore loan packages unique to the country. For instance, Maybank now offers EzyAuto Graduate Financing to capture the previously neglected market of fresh graduates. In the past, the needs of this group of would-be loan takers had never been taken into consideration, possibly resulting in lost of potential business for the loan firms. With EzyAuto, the car buyers pay a very low, affordable monthly amount that stagnates for the first three years before it increases year by year. By then, the car owner’s income would have improved to comfortably accommodate the growing monthly payments.  Toyota is one of the few auto companies that offer loans for its own vehicles in Malaysia. Toyota Capital Malaysia offers several financing plans for wannabe Toyota vehicle owners, including:  Zero Downpayment scheme - 100% margin of finance for those who do not have a lump sum to put down at the beginning of the purchase  Two-Tier plan - lower repayment amount during the first six years of the loan term and a higher ones after, with the option to trade in for a new Toyota  Flexi Plan - paying extra to reduce interest and shorten the loan term The best car loan would then depend on the type of borrower you are: are you more concerned with the total amount that you would have to fork out? Are you presently tight for cash and have avenues for more income or assurance of future increment? These are questions to ponder on before entering into any loan agreement.