Ever wondered how a car loan works?
The process of applying for a car loan may be long-winded and put many people off, but it is not actually that complicated. So let’s put some sense into what actually happens in the realm of car loans.
Obtaining a car loan
What actually happens when you buy a car in Malaysia and what are the things you will face?
In the case of applying for a car loan, you have a choice of either applying it directly from a bank, or indirectly through a car dealer / agent. There are advantages and disadvantages of going with either party – with a bank, you are dealing directly with the one providing you with the loan. Hence, you will not be charged additional commissions or fees that are typically associated with using a third party provider.
If you obtain a car loan through a car dealer or agent, there is a chance the interest rates will not be as competitive as dealing directly with the banks. However, some car dealers or agents may provide additional rebates or discounts on your car purchase, or assist with documentation and the application process, which could make it worth your while.
The car loan application process
Below is a summarised diagram of a typical car loan application process in Malaysia:
To ensure you qualify for a car loan, you have to be sure that you provide all the necessary documents for your application. Once the application and documents are submitted, it is up to the bank to decide on the approval of your car loan.
For further information about car loan in Malaysia, check out our car loan guides.