Things You Must Know About Used Car Refinance in Malaysia
Buying a car is a big commitment for many people because of the hefty price tags. That is why many Malaysians choose to buy a used car. Besides having a lower price than the new one, people can choose to pay for both the new and used car with loans.
There are not many differences between a new car and a used car refinance. In this case, the requirements to apply for a loan are almost the same. In addition, there are some things you must know if you decide to get used car loans. Find more info about this below.
Interest Rate of Used Car Loan
The different banks may offer different car loan interest which can be fixed rates or variable rates. For a used car refinance with a loan, the interest rate is higher than a loan for a new car. With the option between the variable rate and fixed rate offered by the bank, you need to choose the loan depending on your preferences and financial situation.
Financing Margin and Down Payment
Most banks in Malaysia will offer a margin of financing up to 90% of the used car price. The other 10% will be the down payment, you must pay it by yourself. This 10% down payment is the minimum amount, so if you can pay more, it is better. With a higher down payment, you will get a lower loan. This idea can reduce the interest rate and the monthly installment as well.
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Period of the Loan
The loan period is important to consider when you want to apply for a used car loan in the bank. The period itself can influence the interest rates and also the monthly installments. Generally, the longer period of the loan will give you lower monthly installments and interest rates. In Malaysia itself, the maximum car loan period is nine years.
A guarantor is a person you choose to support your used car loan application in the bank. Commonly, the guarantor is a member of the family. In this case, a guarantor will act on behalf of you when you cannot pay the installments of the loan.
That is why it is better to choose someone you trust who can help you to cover the installments when you cannot. In addition, the first-time car buyer, usually, must invite their guarantor when they sign up for the loan documents in the bank.
Early Car Loan Settlement
In Malaysia, you can pay off the car loan earlier than the period of loan agreed upon. For fixed-rate car financing, you have the right to a rebate or a refund of an interest rate for the unexpired tenure. Meanwhile, for an early settlement in the variable rate car loan, you need to pay off all of the outstanding amounts due including the interest rate.
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