Getting a Car Loan On-Line
Today’s car buyers have it so much easier when it comes to getting a hire-purchase loan. In decades past, buyers sometimes had difficulty getting loans but nowadays, the finance companies are eager to provide you loans and would do much to get your business (provided you qualify, of course). Generally, the application for a Hire-Purchase (H-P) loan can be handled by the company selling you the new or used car as they have their contacts with certain finance companies.
It is also possible for you to get your own loan as you can visit any finance company and make the application. This, however, is time-consuming and many people may not have the free time to run around town for the purpose. Most therefore prefer to just ask their salesman to handle the matter for them, rather than enjoy the freedom of making their own choice.
Recognising the limited time that consumers have and wanting to give them the best deal possible, Hong Leong Finance Berhad (HLF), a leader in H-P financing for automobiles, has come up with innovative approaches to make getting a loan easier. Besides having branches in major towns around Malaysia, the company has also set up a Call Centre with a toll-free number (1-800-18-8828) which customers can contact when they want to apply for a loan. There are also In-Store counters at Carrefour hypermarkets where applications can be made, not just for H-P loans for vehicles but also other financial services such as housing loans, unit trust investments and even credit card applications.
The increasingly popular channel is the On-Line Loan Facility which was introduced about two years ago. The first of its kind in Malaysia and still the only one available for Internet users, HLF’s On-Line Loan facility is clearly the easiest way to get a loan. You can do it at any time of the day and any day of the week from the comfort of your desk at home or in the office – no parking hassles and facing jams. And should you be a globe-trotting executive, you can also make the application from Hawaii if you can get access to the Net!
Reaching Out
“The traditional method has been to visit finance companies personally to apply for a loan. But we know that people are very busy nowadays and we want to offer them more convenient ways of getting a loan,” explained Ser Wee Chua, HLF’s Senior Manager – Business Development. “It is up to us to reach out to our customers around the country and offer them facilities which are speedy and convenient, hence the availability of the three channels.”
According to Ser, the three channels are increasing in popularity as consumers are becoming more aware of them. While they do not entirely dispense with the need to physically visit a branch at some point during the process, they eliminate a number of preliminary steps, saving time and effort.
As the Internet age progresses, doing business on-line is becoming a way of life and it is clear from the growing number of applications that HLF’s On-Line Loan Facility is popular. Declining to reveal actual numbers, Ser said that the On-Line channel is definitely accounting for a growing number of applications received by HLF through its non-traditional channels.
“While it is an electronic transaction, unfortunately, due to present circumstances, it is not possible to do everything without some physical interaction. This is because we still need to verify the applicant’s identity and view certain documents. Perhaps in future when there are secure electronic means of verifying identities and providing required information as well as a legalised form of digital signature, a customer will not need to go to a branch at all,” he said.
Aiming to promote the On-Line Loan facility as much as possible, applicants using this channel can get attractive interest rates, repayment periods up to 84 months and even generous margins of financing. However, it also depends on the applicant’s income level and ability to repay the loan.
“It helps if they are already a HLF customer as we would then have a record of them and processing can be faster. But even if they have never taken any loan or banked with Hong Leong before, we still consider all applications and make an assessment based on the applicant’s background and income,” Ser explained.
Quick conditional approval
If the applicant’s income is of a level that is appropriate for the loan being taken (and other criteria are met), a conditional approval can be given within 24 hours or less (unless it is a public holiday or weekend). What this means is that the applicant is informed that the loan is available, subject to HLF receiving all required documents (identity card, income tax return form, pay slip, etc) and finding them matching the information provided in the on-line application form.
“The speed of processing is a strong point of our On-Line facility and applicants can also check the status of their application on-line, something which no one else offers at this time,” said Ser, adding that there are no extra costs to using the On-Line facility.
“More important for the customer is the knowledge that the loan issue has already been settled and is available. This means that he or she can go to a car dealer and negotiate with a bit more ‘strength’. There need not be discussions on financing with the salesman and because HLF is a reputable finance company, there will also be no problems when saying that a loan has already been approved by the company for the customer,” he explained.
To present the required documents and sign the application forms, you can select any HLF branch convenient to you, and there are many throughout East and West Malaysia (the whole network is listed on the website).
“We believe that customers should not be told by us where they should go to process their application but that they should be given the freedom to choose which location is convenient to them,” said Ser.
For loans involving new vehicles, the process is slightly easier as the HLF branch handling your application can liaise with the car company concerned. As a service to customers, both HLF and the car company will relieve the customer of having to run around and exchange all the necessary paperwork.
However, for a used vehicle, it is necessary for an officer from HLF to view the vehicle to verify its existence, condition and engine/chassis numbers. The all-important original registration card must also be furnished to ascertain if the vehicle is still under another H-P loan.
“We need to do this to protect our customers’ interests since they are taking a loan,” explained Ser. “As you know, there are cases of fraud and we need to be sure of the vehicle since we are giving out a loan. It helps a bit if the vehicle is still under the ownership of another finance company as it would be easier to confirm ownership.”
He revealed that on-line applications for used cars are a bit greater than for new cars, This is perhaps due to the fact that companies selling new cars have links with finance companies and can assist with getting loans whereas used car buyers – especially those buying from private sellers rather than used car dealers – often have to find their own loans.
In any case, whether it is for a new car or a used one, HLF’s On-Line facility also provides access to a comprehensive range of services. Once contact is made and conditional approval is given, the customer can also obtain insurance coverage.
Money-saving scheme
Another unique benefit of using the On-Line facility is that applicants can also choose the Hibah scheme, a scheme that is the first of its kind in Malaysia. This scheme is an Islamic hire-purchase service based on the Syariah Principle of Al-Ijarah Thumma Al-Bai (AITAB) which gives cash rewards to customers. Though provided for Muslims, the scheme is also available to non-Muslims who apply using the On-Line facility. However, it is restricted to individual customers and limited to passenger cars including MPVs, 4WDs and Vans which will be registered for private use.
Those who take a H-P loan using this scheme will receive a 1% cash reward based on the loan amount, but they have to pay their monthly instalments promptly for the period of 12 months. They cannot incur any charges such as late payment or reminder fees during the hibah period. Also, customers are not encouraged to early settle within the hibah period. If any of these two exceptions occur, customer will not earn their “hibah“. The “hibah” that has been earned by a customer will be credited to his/her savings account after the 13th month due date. As such, customers need to open a savings account at a Hong Leong Bank branch when they apply for financing.
“HLF has put in a lot of effort to making the process of getting a car loan as user-friendly as possible. And I believe that we offer the most comprehensive on-line facility for this purpose,” declared Ser.
He is enthusiastic and very optimistic about the future of On-Line loan applications but does not expect to see a decline in the traditional methods happening so soon. This is because there are still many people who prefer face-to-face interaction, especially when it comes to divulging personal information. There are also some people, (mostly the older generation) who are not so comfortable using a PC, let alone getting on the Internet to do business.
“It’s HLF’s aim to be the best in offering financial services and we can only achieve this goal if we give our customers the widest range of ways to interact with us”, he said.
“Even if someone is not intending to buy a new or used vehicle right now, it costs nothing to make an on-line application for a loan. If nothing else, at least the person will know how much he or she can get when the time comes and the need for a loan arises,” suggested Ser.
To go straight to the HLF On-Line Car Loan application page, click here.
