Purchasing any car for the whole amount with instant cash may not be practical for most of us. So if you are like most people, then car loans are by far the most convenient means to get your dream car. Some may even have the cash or savings to buy a car outright, but choose to take out a car loan instead.
There are many banks and finance companies offering different types of car loans that vary in its fee and interest. All the financial and lengthy terms may seem like it’s a long-winded process, but in all honesty, getting an auto loan is relatively simple.
Without further ado, let us delve into the few things you’ll need before getting yourself a car loan.
Your financial history
The first thing the bank needs to know before giving you a motor loan is your ability to pay it back. This means the bank would want to make sure you are able to make the monthly payments in the future. In order to do that, the bank will assess your credit history and income. If you have a bad credit history, your auto loan may not be approved, or there is a likelihood of higher interest rate for your car loan.
Prepare the deposit
Ask the bank the advance payment you are required to pay. Even though it is usually 10% of the car value, banks may impose a higher percentage. This deposit is needed as a token of your accountability. If you are able to pay more, doing so would reduce your monthly payments, which will benefit you in the long term (as you will be paying less in interest).
The relevant car loan documents
Upon approval of your motor loan, you will be given a list of things / documents to prepare for the application. The basic documents are copies of your identification card, payment slips, and driving license.
Compare your car loan options
There are many banks and finance companies that offer car loans in Malaysia. Because interest rates can differ between lenders, it is worth spending some time researching and comparing the car loan interest rates of each bank. A small reduction in interest can amount to a lot of savings over several years!