Bank Islam offers competitive rates that range from 2.10% to 3.30% per annum. For national vehicles, the rates start from 2.50% to 3.30% per annum. New non-national and hybrid vehicles enjoy rates from 2.30% to 2.50% per annum. Unregistered reconditioned vehicles are offered rates from 2.40% to 2.80% per annum, while electric vehicles have the most competitive rates from 2.10% to 2.20% per annum. Used vehicles have a higher rate structure, starting from 3.65% per annum, depending on the vehicle’s age. These rates are calculated monthly using the Sum of Digit method, ensuring transparency and consistency.
Bank Islam’s car loan interest rate is a component of its Vehicle Financing-i product, which is designed to facilitate the purchase of vehicles under Shariah-compliant principles. This vehicle financing option is based on the Murabahah concept, where the bank purchases the vehicle and sells it to the customer at an agreed profit margin.
Bank Islam Hire Purchase Interest Rate
What Are the Key Features and Benefits of Bank Islam’s Vehicle Financing-i?
Bank Islam’s Vehicle Financing-i offers several key features and benefits. The product provides a margin of financing of up to 90% of the on-the-road (OTR) price for various vehicle categories, including national, non-national, and unregistered reconditioned models. The financing tenure can extend up to nine years, allowing customers flexibility in repayment. Notably, the financing rate for electric vehicles starts from the lowest range, reflecting Bank Islam’s support for environmentally friendly choices. The fixed selling price is transparent, with no hidden charges, and customers can benefit from ‘ibra’ (rebate) on full settlement before maturity. Additionally, the approval process is swift, contingent on the submission of complete documentation.
Am I Eligible for Bank Islam Vehicle Financing-i?
The eligibility for Bank Islam Vehicle Financing-i require applicants to be Malaysian citizens aged between 18 and 60 years at the end of the payment period. A fixed income is required, and applicants should ensure their monthly loan repayments do not exceed one-third of their monthly salary. Documents needed include a photocopy of the Identity Card, valid driving license, latest three months’ salary slips, and bank statements or EPF statements/EA forms. Additional support documents may be requested by the bank. This eligibility criterion ensures that the applicant can comfortably manage the loan repayments.
How Does Bank Islam’s Vehicle Financing-i Work Under Islamic Principles?
Bank Islam’s Vehicle Financing-i operates under the Islamic principle of Murabahah. This concept involves a sale with a deferred payment plan. The bank purchases the vehicle of the customer’s choice and sells it to them at a predetermined profit margin. This structure ensures that the customer knows the selling price and profit margin upfront, promoting transparency. There are no hidden charges, and customers are required to service monthly instalments diligently to avoid penalties. Bank Islam periodically revises its indicative profit rates, emphasizing the importance of staying informed about potential changes.
What Happens If I Miss My Monthly Repayments?
Missing monthly repayments incurs a penalty in the form of Ta’widh (compensation). Before the maturity of the facility, a penalty of 1% per annum on overdue instalments is applied. If the facility matures, the penalty is based on the prevailing daily overnight Islamic Interbank Money Market Rate on the outstanding balance, less any rebate. Communication with the bank is crucial if a payment delay is anticipated, as this can prevent further complications and charges.
Is Takaful Coverage Required for This Car Loan?
Comprehensive Motor Takaful coverage is mandatory for the entire financing tenure. This coverage is a legal obligation, ensuring the vehicle is protected throughout the financing period. Additionally, customers can opt for an Auto Financing Takaful Plan, which offers personal accident coverage. This comprehensive approach safeguards both the vehicle and the borrower, aligning with the principles of risk management under Islamic finance.
Can I Settle My Car Loan Early, and What Are the Benefits?
Early settlement of the car loan is permitted, with benefits. Customers who wish to settle their financing before the end of the tenure receive an ‘ibra’ (rebate) on the remaining financing period. This incentive encourages borrowers to settle their debts sooner if they are financially able, providing them with flexibility and potential cost savings on profit charges.
What Documentation Is Required When Applying for Bank Islam’s Car Loan?
The documentation required for application includes a photocopy of the applicant’s NRIC (front and back), a valid driving license, and the latest three months’ salary slips. Additionally, copies of bank statements where the salary is credited or EPF statements/EA forms are necessary. These documents ensure that the applicant’s financial standing and identity are verified, streamlining the application process for a swift approval decision.