Public Bank Hire Purchase-i refers to a Shariah-compliant vehicle financing solution based on the Al-Ijarah Thumma Al-Bai (AITAB) concept. This financing method allows customers to lease and eventually own a vehicle through structured monthly installments. Public Bank offers competitive profit rates starting from 2.88% p.a., financing up to 90% of the vehicle’s value, and a maximum tenure of 9 years for new cars. The bank provides financing for both local and foreign vehicles, with varying terms based on the car’s age and type.
The AITAB structure involves two stages. The first stage is an Ijarah (leasing) period where the bank owns the vehicle and leases it to the customer. The second stage is a Bai (sale) agreement where the customer purchases the vehicle at a pre-agreed price. This method ensures compliance with Islamic finance principles while offering flexibility in repayment. Public Bank also includes features such as early settlement rebates and fixed profit rates, making it a predictable financing option for borrowers.
Public Bank Car Loan Rates and Application
What Are the Current Public Bank Car Loan Rates?
Public Bank car loan rates vary depending on the vehicle type, loan tenure, and borrower profile. For new local cars, profit rates range from 3.31% p.a. with financing up to 90% over 9 years. Used local cars have rates from 4.1% p.a. with a maximum tenure of 7 years. Foreign vehicles follow a different pricing structure, with new cars starting at 2.84% p.a. and used cars at 4.05% p.a.
The bank determines rates based on factors such as the borrower’s credit score, income level, and vehicle model. Lower rates apply to shorter tenures and higher down payments. Public Bank also imposes a late payment penalty of 1% p.a. on overdue amounts, reinforcing the importance of timely repayments. Borrowers can use the bank’s loan calculator to estimate monthly installments before applying.
How Does Public Bank Determine Loan Eligibility?
Public Bank assesses loan eligibility based on income, credit history, and employment stability. Applicants must earn a minimum of RM2,000 monthly (RM24,000 annually) and be aged between 18 and 70 years old. Salaried employees must submit recent payslips, EPF statements, and tax documents, while self-employed applicants provide business financial records.
The bank evaluates creditworthiness through Bank Negara Malaysia’s Central Credit Reference Information System (CCRIS). A strong credit score increases approval chances and may secure better rates. Public Bank also considers the vehicle’s age and market value, with older cars facing stricter financing limits. A guarantor may be required if the applicant’s financial standing is insufficient.
What Documents Are Required for a Public Bank Car Loan?
Applicants must submit identity proof, income verification, and vehicle purchase documents. For salaried individuals, this includes 3-6 months of payslips, EA forms, and EPF statements. Self-employed applicants provide 1 year of tax returns and 6 months of bank statements. Vehicle documents such as sales orders, booking forms, or registration cards are mandatory.
Public Bank processes applications faster when documents are complete and accurate. Missing or outdated paperwork may delay approval. The bank accepts digital submissions via its online portal, streamlining the application process. Borrowers should ensure all uploaded files are clear and legible to avoid rejection.
What Is the Maximum Loan Tenure and Margin of Financing?
Public Bank offers a maximum tenure of 9 years for new local cars and 7 years for used vehicles. The margin of financing reaches 90% for new local cars and 85% for foreign used cars. Older vehicles (above 10 years) may qualify for only 80% financing with shorter tenures.
The bank adjusts terms based on risk assessment. Longer tenures reduce monthly installments but increase total interest paid. Borrowers should balance affordability with overall cost when selecting repayment periods. Public Bank provides amortization schedules to help customers understand payment breakdowns.
What Fees and Charges Apply to Public Bank Car Loans?
Public Bank imposes processing fees, stamp duties, and administrative costs. Key charges include RM10 for document stamping, RM50 for JPJ fees, and RM10 for photocopy services. Late payments incur a 1% p.a. penalty, while early settlement may qualify for rebates depending on the agreement.
Additional fees apply for document retrieval and courier services. Borrowers should review the loan agreement for all applicable costs before signing. Public Bank discloses these charges upfront to ensure transparency and prevent unexpected expenses during the loan term.
How Does the Public Bank Car Loan Application Process Work?
Applicants can apply online, via branch visits, or through authorized dealers. The process involves document submission, credit assessment, and loan approval, typically taking 3-5 working days. Public Bank notifies applicants via SMS or email once a decision is made.
Approved loans require signing the hire purchase agreement and paying the down payment. The bank disburses funds directly to the dealer, enabling vehicle collection. Borrowers receive a payment schedule detailing installment amounts and due dates. Public Bank also offers auto-debit options for hassle-free repayments.
What Happens If a Borrower Misses a Payment?
Late payments trigger a 1% p.a. penalty on the overdue amount. Consistent defaults for two consecutive months may lead to vehicle repossession. Public Bank follows legal procedures under the Hire Purchase Act 1967, issuing notices before taking action.
Borrowers facing financial difficulties should contact the bank for repayment assistance. Public Bank may restructure payments or offer temporary deferments under its relief programs. Proactive communication helps avoid severe consequences such as credit score damage or asset seizure.
Can Borrowers Settle Their Public Bank Car Loan Early?
Public Bank allows early settlement with potential rebates on unearned profit. The rebate amount depends on the remaining tenure and original agreement terms. Borrowers must submit a formal request and settle the outstanding balance in full.
Early settlement reduces total interest costs and frees up credit for future financing needs. Public Bank provides a final statement confirming loan closure and ownership transfer. Customers should verify all details before proceeding to ensure no hidden fees apply.
How Does Public Bank Compare to Other Lenders?
Public Bank’s rates are competitive, with new car financing starting at 2.84% p.a. for foreign vehicles. RHB and Hong Leong Bank offer similar rates, while Maybank and CIMB may have slightly higher pricing. The bank’s 90% financing margin exceeds some competitors, benefiting buyers with limited savings.
Customer service and processing speed also influence lender choice. Public Bank’s digital application system reduces paperwork and approval times. Borrowers should compare terms across multiple banks to secure the most favorable deal.