bank loan not consistent one meh? or case by case basis? some bank they ask to buy insurance in case the owner cannot pay the loan.

I think u need to re-apply after another 6 months

Dearest all.. Did u think interest 3% to buy Saga is quite high..? I got a friend, she got 2.9%..

how bank decide the unterest rate for national car? any standard guildeline?

depends on loan amount, loan years, credit history, salary...

Different bank different de .... look for your SA.. ask for Panel bank Easier for approval compare to non-panel

I am planning to purchase a used car @ 9xK, from the initial plan to loan from MBank, the SA told me the rate is above 3.5% for 8 years loan. Call P.bank without any submission of documents yet, the SA told me they can make it @ below 3.2%. Clarify with Mbank, different bank have different management, Is this funny?

For car loans you will find that the first half of the tenure, you are paying more interest than principle. For example, in a 5 yr loan, the first three years whatever you are paying to the bank, a larger portion of it goes to interest while a smaller portion goes to principle reduction. After three years if you intend to sell your car, you will find that the interest rebate is minimal.

Let's take a few examples, calculated courtesy of autoworld

Basis for calculation:
Car price: RM115,000
Loan amount: RM100,000
Interest: 2.5%
Tenure: 5, 7 and 9 years
Car sold after 3yrs for RM75,000


5 yr loan: (RM100,000 x 1.125) / 60 = RM1,875/mth.

After 3 yrs: Amt paid (36 x RM1,875) = RM67,500
Interest rebate: RM1,885.25
Total owing to finance: RM43,114.75

Based on the above,

Total amount spent on "renting" the car for 3 yrs is:

(D/p + Amt paid for 3 yrs) less (Sold price - Total owing to finance)

(RM15,000 + RM67,500) less (RM75,000 - RM43,114.75)

= RM82,500 - RM31,885.25
= RM50,614.75
= RM1,406/mth cost of ownership




7 yr loan: (RM100,000 x 1.175) / 84 = RM1,398.80/mth.

After 3 yrs: Amt paid (36 x RM1,398.80) = RM50,356.80
Interest rebate: RM5,529.40
Total owing to finance: RM61,613.80

Based on the above,

Total amount spent on "renting" the car for 3 yrs is:

(D/p + Amt paid for 3 yrs) less (Sold price - Total owing to finance)

(RM15,000 + RM50,356.80) less (RM75,000 - RM61,613.80)

= RM65,356.80 - RM13,386.20
= RM51,970.60
= RM1,443.65/mth cost of ownership




9 yr loan: (RM100,000 x 1.225) / 108 = RM1,134.30/mth.

After 3 yrs: Amt paid (36 x RM1,134.30) = RM40,834.80
Interest rebate: RM9,770.65
Total owing to finance: RM71,894.60

Based on the above,

Total amount spent on "renting" the car for 3 yrs is:

(D/p + Amt paid for 3 yrs) less (Sold price - Total owing to finance)

(RM15,000 + RM40,834.80) less (RM75,000 - RM71,894.60)

= RM55,834.80 - RM3,105.40
= RM52,729.40
= RM1,464.70/mth cost of ownership


So, to sum it all up:

The monthly actual cost difference between a 5, 7 and 9 yr loan, based on a car that is sold after 3 yrs:

5yrs: RM1,405/mth
7yrs: RM1,443.65/mth
9yrs: RM1,464.70/mth

and, total interest paid after 3yrs:

5yrs: RM10,614.75 out of RM12,500
7yrs: RM11,970.60 out of RM17,500
9yrs: RM12,729.35 out of RM22,500

So, in reality, there's not much that separates between 5, 7 and 9 year loans due to the current low interest rates. And, if you have better use for your cash for investments or whatever, it makes sense to take 9 yr loans.

This post has been edited by gregy: Apr 9 2012, 06:58 PM

Latest I got today Maybank for new car 90k loan tenure 5 years is 2.5%

Guys, need some advise here.

My salary is rm 3k. now 7 months into my job, monthly i save around rm1500 nett after food and rent. at first thinking to buy a used Mazda/Honda/Toyota, the loan would set me back easily around rm800 per month.

but after some mature financial thinking, i think im just gonna buy a second hand Wira Mivec 1.5, price range 12k to 18k. With a bit of downpayment, monthly i would be paying rm150-rm200. Good choice or not?

Petrol is no problem, coz i often go site visit to the construction site. After claim, can get around rm300 per month.

if this is your first car, is a good choice, save up more cash for bigger purchase later such as, a house.
get someone to check the car if you don't know about cars. used car tend to have some repair here n there.

How hard/long issit to get approval for car loan nowadays for used car ?

Will the downpayment affect this ?

Hi bro. is it really 1.88 for 5 years? or is that just a sales gimmick with only 1.88 for few months only ?

1.88 for 5 years...really...I took 7 years and the rate was 2.0 something...still much lesser than the normal 2.4 etc

for qualified appliants, it may only take 1-2 days to get it approved. higher downpayment or higher nett salary plays a crucial part in determining the outcome of the application.

My car loan for 7 years only 2.37%. That was in 2008.

Hi gregy,

You are right on the interest diff is minimal but you miss out one point here.

Based on your calculation, you have RM15k for a RM115k car. After 3 years if you plan to sell your car.

If you took a 5 year loan - you get back RM31,885.25
If you took a 7 year loan - you get back RM13,386.20
If you took a 9 year loan - you get back RM3,105.40

Am sure after 3 years, you'll plan to have a better car which will cost more than RM115k, or even same value. But you won't have RM15k d/p as you first bought it 3 years ago. If you take a shorter loan tenure, see how much you get back in cash to upgrade or even for other usage

Moral of the story is, if you can't afford the more expensive car, get one which you can afford and not regret it later. It's never an advantage in taking a longer tenure for car loan.

gregy has an interesting idea actually. i nvr thought of it that way before.

anyway, regarding the downpayment you mention, i did a quick calculation on my own. you are forgetting that the 9 year loan guy have extra cash in bank due to lower repayment monthly. if you take that into account, ex: 5(A) years vs 9(B) years

amount paid in 3 years diff:
67500 - 40834.80 = 26665.2 (in B account)

A get back 31,885.25 + 0 in bank
B get back 3,105.40 + 26665.2 in bank = 29,770.6

So B only loose out by 2114.65 compare to A, while enjoy the benefit of having xtra cash in case of emergency. not bad if you ask me. And this is not calculating if he actually used the money for investment purposes, which will further multiply the effect.

This post has been edited by WhitE LighteR: Apr 10 2012, 06:34 PM

Wow, thanks for taking it one step further I guess in general, most ppl don't even bother to look beyond the surface. Also, we mustn't forget that inflation is another factor that is often overlooked when taking loans. Sure, when you look at effective interest rates you will balk, but if you factor in annual inflation, you will find that by putting in so much into a depreciating liability you are compounding the loss for the future. RM30,000 today is worth more than RM30,000 in 3 yrs time. If that money could be invested to counter the effects of inflation, then that would be the smartest move.

I made a similar calculation a while ago in my own thread, just to illustrate a point, and to stop people from looking at 9yr loans as if they were a major loss making venture. Once the numbers are revealed, many of the advocates of short loans are silenced; they didn't really take that one more step to look at the reality, which in the best sense of the word is called "penny pinching"...

Definitely, if you can put that money aside in say, some investment linked fund or maybe to fund a new home for investment, that is always better than placing all your hard earned cash in a depreciating liability.

And yes, having some extra funds for a rainy day is good too...

I actually prefer not to highlight much on the investment benefit of the extra cash because to me, that should be calculated as a bonus effect and not the deciding factor.

i was merely pointing out to neo110 regarding the down payment part of his calculation.