- Conventional Loans Versus Pre-approved Loans
- 1. It Gives You the Opportunity to Plan Your Budget More Wisely
- 2. Shop Comfortably Without Worry of Loan Rejection
- 3. Get Your Car Faster
- So, How Do You Get a Pre-approved Loan?
- Buy a Carsome Certified Car with Ease Now
Written by Jasmine Andria
Have you heard of a pre-approved car loan? In Malaysia, it might not be a much-discussed concept, but it does exist. In fact, Carsome Capital offers a pre-approved car loan, exclusively for the purchase of Carsome Certified cars.
In brief, it is a loan that is pre-approved before you even find a car you want to buy – it gives you an allocated financing limit so you know how much you can afford.
Conventional Loans Versus Pre-approved Loans
But before we go into the perks of applying for a pre-approved car loan, it’s best you understand how a conventional car loan works versus a pre-approved car loan.
- Conventional car loan: Conventional car loans are the ones that you apply for after you find a car you want. However, there are waiting periods that may differ based on the bank, that will either approve or reject your application. For example, Marie decides to buy a used 2015 Honda at RM65,000. She is unable to pay for this with cash, and decides to apply for a car loan. So, she submits her documents with the sales consultant, who then helps her apply for a car loan (also known as a hire purchase loan) to three different banks. From here, the banks will evaluate her credit health and decide whether to approve or reject her loan application. One of the main reasons banks reject car loan applications could be due to the Debt Service Ratio (DSR). In simple terms, a DSR calculates if you are able to afford the repayment amount by taking into account your finances versus debts.
- Pre-approved car loan: Now, a pre-approved car loan works the other way around. When you get a pre-approved car loan, they will give you a maximum financing amount. For example: Anne has decided that she wants to buy a car, but she doesn’t know what car she wants and hasn’t started shopping around. She decides to apply for a pre-approved loan so that she can shop without worry. She submits her application and gets pre-approved for a RM75,000 loan. Now, Anne can start looking around for a car that is not more than RM75,000. She then decides to buy a 2019 Kia Cerato priced at RM70,000. All she needs to do now is show her pre-approved loan and get the car right away. Of course, the final loan will be valued according to the car price she has chosen.
But is it something you should be looking into? Well, getting your loan pre-approved can be a smart move, especially if you are still shopping around – this is because you are already pre-approved for a certain amount, so you will know the exact price range you should be shopping in.
But there are more advantages than just that so we’ve taken the liberty to list them down for you.
1. It Gives You the Opportunity to Plan Your Budget More Wisely
When it comes to buying big ticket items – whether it is a house or a car – it certainly is not something you do on a whim. Instead, you would probably plan your budget to find out if you are able to fork out the monthly repayment amount, the down payment, and so forth.
For example, if you were pre-approved for a financing limit up to RM80,000. Then, you are able to calculate if you can sustain this RM80,000 car loan, which would be about RM1,400 based on an average interest rate of 3.50 percent (you can use our loan calculator here).
Here’s a tip: you can use the 50/30/20 budget rule which is when 50 percent of your income goes to your needs, 30 percent to wants, and 20 percent to savings or paying off debt.
2. Shop Comfortably Without Worry of Loan Rejection
The conventional method of applying for car loans involves a lot of waiting and that doesn’t even give you confirmation that you will be able to get the car you chose.
Banks can reject your application, especially if your debt service ratio (DSR) is high, indicating that you are not able to sustain the monthly repayment. This brings in the advantages of getting a pre-approved car loan because you can already confirm you are able to finance a car and all you have to do is choose one.
3. Get Your Car Faster
As we’ve mentioned above, buying a car with a conventional loan involves a fair bit of waiting and on top of that, you would be unsure if the bank will grant you a loan for the car you have chosen. This means although you have picked out the car you want, and tediously arranged your documents for loan submission, there is still a chance that you won’t be approved for the loan.
Hence, with a pre-approved loan, you would have surpassed that worry of rejection and focus on finding a car that you like. Once you find the car you want, the process is sped up and you can essentially drive your car home in a matter of days.
So, How Do You Get a Pre-approved Loan?
Reasons as such are why Carsome now offers pre-approved loans via Carsome Capital. With this, you can get a Carsome Pre-approval Certificate to purchase a Carsome Certified car, and get your car delivered to you within one* working day.
How do you apply? Here are the steps.
- Get a Carsome Pre-approval Certificate: Click on “Get Pre-approved Now” on www.carsome.my/car-loan, or click here. This will take you to a chat where you will need to submit your Identification Card (IC) and monthly income details to us. We will assess your application, and if it is successful, a Carsome Pre-approval Certificate will be generated with your maximum loan amount, repayment period, and interest rate.
- Choose a Carsome Certified Car: It’s time to finally go browsing for cars. Once you get your Carsome Pre-approval Certificate, you can head to our website to browse for a Carsome Certified car and make your booking. Additionally, you can also talk to a Carsome Consultant and browse for cars at any Carsome Experience Center. Once you make your decision, just show your Carsome Pre-approval Certificate to get your purchase finalized.
- Collect Your Car Instantly: Bring your car home! You can get your car within one working day*. We can arrange for collection at a Carsome Experience Center, or deliver it straight to your doorstep.
Buy a Carsome Certified Car with Ease Now
Why buy a Carsome Certified car? Well, Carsome Certified cars are quality pre-owned cars that have passed a 175-point inspection and are refurbished to ensure safety beyond standards, complete comfort, and refurbished aesthetics.
With a wide selection of up to 30 brands, Carsome Certified cars also come with the following promises:
- Fixed price with no hidden fees: The price you see on the listing is the actual full price of the car with absolutely no hidden fees. We practice full transparency in our costs to ensure you know exactly what you are getting.
- Five-day money-back guarantee: If you change your mind after purchasing a Carsome Certified car, you can return it back to us within five days to get a full refund – no questions asked.
- One-year warranty: Our journey with you does not stop after you buy a car. We will give you an extended warranty to ensure your vehicle is covered in your first year.
So if you are looking to buy a car, Carsome’s pre-approved car loan gives you the chance to drive away almost immediately once you have found a car you want. Plus, with monthly promotions, you get a chance to grab rebates, extra perks, and more.
With that, we hope you find your car with us and we wish you many safe journeys on the road.
*Terms & conditions apply.
Keyword: 5 Benefits on Getting a Pre-approved Car Loan