Article Outlines
A Complete Guide to Car Loans in Malaysia
A Car Loan is a financial product that helps individuals purchase a new or used vehicle. The borrower receives funds from a lender and repays the amount through monthly installments that include principal and interest. Car loans offer flexible repayment terms, attractive interest rates, and quick approval processes.
What is a Car Loan Repayment?
A car loan repayment is the regular payment you make to a lender (such as a bank, credit union, or car dealership) to pay back the money borrowed to purchase a vehicle..
Each repayment usually includes two parts:
Principal
The portion that goes toward reducing the original loan amount.
Interest
The cost charged by the bank for lending you the money.
How Car Loan Repayments Work
Car loan repayments work by allowing you to pay back the money borrowed to purchase a vehicle through regular installments, usually made monthly over a set term (often 3–7 years). Each payment consists of two parts — the principal, which reduces the amount you owe, and the interest, which is the lender’s charge for borrowing the money. Early in the loan term, a larger portion of your payment goes toward interest, but as you repay more of the principal, the interest portion decreases. Depending on your agreement, the loan may have a fixed or variable interest rate, and some loans may include fees or balloon payments. Regular repayments continue until the full loan amount and interest are paid off.
Bank Car Loan Interest Rates
| Bank Name | Interest Rate |
|---|---|
| Alliance Bank Hire Purchase | 3.14% p.a |
| Al-Rajhi Automobile Financing-i | 4.4% p.a |
| AmBank Arif Hire Purchase-i | 3.05% p.a |
| Bank Muamalat Hire Purchase-i | 4.00% p.a |
| CIMB Hire Purchase | 3.25% p.a |
| Hong Leong Auto Loan | 3.24% p.a |
| Maybank Hire Purchase | 3.4% p.a |
| Public Bank Aitab Hire Purchase-i | 3.31% p.a |
| RHB Hire Purchase | 3.18% p.a |
