Purchasing a car is one of the most important financial decisions for many Malaysians. Whether you’re purchasing your first car or upgrading to a new model, most people require car loans to make it happen.
It’s important to know what the requirements are for getting a car loan in Malaysia before you apply. This will help you get approved faster and avoid getting turned down for no reason.
- Minimum Age and Requirements for Eligibility
To get a car loan in Malaysia, you need to meet the basic requirements set by banks and other financial institutions:
| Age requirement | – 18 years old (some banks may require at least 21 years old) |
| Maximum age | – 60 to 70 years old (varies depending on the bank and loan tenure) |
| Nationality | – Malaysian citizens and Permanent Residents (PR) are eligible. – Foreigners may apply with additional documents (e.g. valid work permit, employment contract). |
| Employment | – Must have a stable source of income, either as a salaried employee or self-employed individual. |
- Minimum Income Requirement
In Malaysia, a minimum monthly income of around RM2,000 is a general guideline for car loan applications, though individual requirements vary significantly by bank and loan type. Typically, banks may ask for a higher income to approve higher loan amounts or for luxury vehicles.
A self-employed individual will need to provide proof of business income, usually via bank statements or audited accounts.
Your income level strongly impacts the maximum financing amount and loan eligibility.
- Debt Service Ratio (DSR)
The Debt Service Ratio (DSR) is one of the most important factors banks consider when reviewing your loan application. It measures your ability to repay the loan based on your existing financial commitments.
DSR Formula:
DSR = (Total Monthly Debt / Net Monthly Income) x 100%
For example, if your net income is RM4,000 and you already pay RM1,500 monthly for other commitments, your DSR is 37.5%, which is within the acceptable range.
A lower DSR indicates stronger repayment capacity, while a higher DSR makes it harder to get loan approval or the full loan amount you applied for. Most banks prefer a DSR of 60% or lower.
- Credit Score
A credit score refers to the Credit Tip-Off Service (CTOS) score that ranges between 300 and 850. This score represents your creditworthiness and indicates how likely you are to repay your debt on time.
Banks and financial institutions in Malaysia rely heavily on this score when evaluating car loan applications.
- Higher credit score = better loan approval chances
- Lower credit score = higher risk of rejection or stricter loan conditions
Factors that can lower your credit score include missed or late payments on credit cards, personal loans, or PTPTN loans.
Your credit score is calculated based on your credit history, including:
- The number of active credit or banking accounts you hold in Malaysia
- Total amount of debt that is still owed
- Payment and repayment history
- Frequency of loan or credit applications
- Public records (e.g., legal actions, bankruptcies, if any)
Keeping a good credit score will help you get a car loan approved and may also help you get better loan terms and interest rates.
- Job Security and Length of Employment
Banks prefer applicants who maintain consistent employment and refrain from frequently transitioning between positions. Typically, it is recommended that your current employer has employed you for a minimum of 6 months.
Self-employed individuals must provide proof of business registration and at least six months’ worth of business bank statements.
If you just got a new job, you might have a better chance of getting approved if you have a guarantor or a larger down payment.
- Documents Needed
Get these papers ready ahead of time to speed up the approval process:
- A copy of your IC or passport
- A copy of valid Driving License
- Latest 3 months Salary Slip
- Bank statements from the last 3 to 6 months
- Latest EPF Statements/EA Forms
- Other Supporting Documents as may be deemed necessary and acceptable by the Bank.
To find the best loan package for you, compare offers from a few banks or use online tools like Key Plus, Carsome, RinggitPlus.
How to Increase the Chances of Car Loan Getting Approved?
✅ Paying all of your bills on time will help you keep a good credit score.
✅ Your DSR should be less than 60%.
✅ Before you apply, make sure you have all the documents you need.
✅ Choose a bigger down payment.
✅Look at the terms of different banks and pick the one that works best for you.
Getting your car loan approved in Malaysia isn’t just about income. You also need to show banks that you are a responsible borrower who knows how to manage your money well.
You can plan ahead, boost your chances, and secure the best financing deal for your new car by understanding the car loan approval criteria.