Car Loan Interest Rate Comparison in Malaysia
Looking for a new car loan in Malaysia? Comparing car loans of all banks can be difficult to do by yourself. To make it easier, we did a comparison of the best car loans in Malaysia. All the loans were checked for a RM 30,000 loan over a period of 5 years. To qualify for these car loans, you need a minimal annual income of 24,000 and be between 21 and 55 years old. Check it out:
Car loan interest rates
|Bank Name||Car Loan interest rates||Monthly repayment in RM|
|BSN Hire Purchase||2.80%||570.0|
|Affin Bank Conventional Hire Purchase||2.92%||573.0|
|Hong Leong Mach Cruise Control Car Loan||3.10%||577.5|
|RHB Hire Purchase||3.18%||579.5|
|Hong Leong Auto Loan||3.24%||581.0|
|CIMB Hire Purchase||3.25%||581.3|
|Alliance Hire Purchase||3.28%||582.0|
|Maybank Al-Ijarah Thumma Al-Bai||3.40%||585.0|
|Maybank Hire Purchase||3.40%||585.0|
|Maybank My First Car Loan||3.40%||585.0|
The interest rates on car loans are lower than the interest rates on personal loans. This is because car loans use your car as collateral, which makes it a secured loan. This reduces the risk for the bank and allows them to drop the interest rate. The cheapest non-Islamic car loan is the BSN Hire Purchase with an interest rate of 2.8%, while the most expensive non-Islamic car loan is the Maybank My First Car Loan with an interest rate of 3.4%.
Islamic car loan interest rates
|Bank name||Profit Rate||Monthly Repayment|
|KFH Automobile Ijarah-i||2.75%||568.8|
|Affin Islamic Hire Purchase-i||2.92%||573.0|
|Bank Islam GradHitz Vehicle Financing-i||3.00%||575.0|
|AmBank Islamic Arif Hire Purchase-i||3.05%||576.3|
|RHB Vehicle Financing-i||3.18%||579.5|
|Hong Leong Islamic Auto Financing-i||3.24%||581.0|
|Bank Islam Vehicle Financing-i||3.25%||581.3|
|CIMB Hire Purchase-i||3.25%||581.3|
|Alliance Islamic Hire Purchase-i||3.28%||582.0|
|Public Bank Aitab Hire Purchase-i||3.31%||582.8|
|Bank Muamalat Hire Purchase-i||4.00%||600.0|
|Al-Rahji Automobile Financing-i||4.40%||610.0|
|Bank Rakyat Superbikes Financing-i||5.00%||625.0|
|Al Rahji Superbike Financing-i||6.00%||650.0|
The profit rate on Islamic car loans is a bit higher on average than the interest rate on regular car loans. The cheapest Islamic car loan is the KFH Automobile Ijarah-i car loan with a profit rate of 2.75%, while the most expensive one is the Al Rahji Superbike Financing-i. By comparing different car loans, you can save more than RM 100 a month on repayments.
What is a car loan?
The definition of a car loan is a loan you receive from the bank to pay for your car purchase. Since a car is generally considered a long-term investment, it is very common to pay for a car through a loan. A car loan is different from a personal loan, in that the loan is tied directly to your purchase. That means that the bank can repossess your car when you neglect to make your loan repayments.
Why would I take a car loan?
You can consider taking a car loan when you plan to purchase a new car. The loan will use the car as collateral, which means that it is a little easier to get a car loan because the bank can repossess your car in case you cannot pay back the loan. Because of this extra risk insurance for the bank, the interest rates on car loans are generally a bit lower than personal loans.
What is a hire purchase?
A hire purchase means that as long as you have not paid off your car loan, the car technically belongs to the bank. Once you have paid off your loan, the ownership of the car is transferred to you.
What is fixed rate car loan?
A fixed rate car loan has the same interest rate over your entire repayment period. That means that your car loan interest rate will stay the same, no matter where the market interest rate moves to.
What is a variable rate car loan?
A variable rate car loan has an interest rate that is tied to the market interest rate. To determine your interest rate, your bank will check the market interest rate and adjust accordingly. A variable rate car loan is better than a fixed rate car loan when you expect the market interest rate to go down over the period of the loan.
Can I get a car loan if I already have an existing car loan?
Yes, you can. If you have almost paid off your old car loan, but you are already thinking about a new car, you can sell your old car and pay off your old loan. You can then use any extra proceeds from the sale as a deposit for your new car loan. Most car loans allow you to pay off the full amount whenever you want.
Is a car loan better than a personal loan?
Although car loans are tailor-made for car purchases, there might be instances where a personal loan is a better option. For example, a car loan is structured in a way that allows banks to seize your car when you default on payments. With a personal loan, you have more control over which of your assets are at stake. Secondly, car loans are generally designed for new car purchases, so the rates might not be optimal for used car purchases. Check out our free comparison tool to find a loan that suits your needs. See Also: Car Loan or a Personal Loan: Which is Better for You?