Tips for Successfully Applying for a Car Loan and Everything You Need to Know

Not every purchase in the modern era needs to be paid in full upfront. For larger purchases, such as cars and houses, using a credit or installment method is quite common. So, let’s dive deeper into car loans, including application tips, tricks to get discounts, and an overview of simulations used to calculate the most suitable payment plan.

Simply put, a car loan is a method of purchasing a car through installments. After determining the down payment amount, the remaining balance is paid periodically over an agreed period, along with interest as a consequence of the installment plan.

On the other hand, car loans should ideally be accompanied by vehicle insurance. During the loan period, there is a risk of damage or unforeseen events happening to your car. Products like AXA Insurance Indonesia Vehicle Insurance can help prevent greater financial losses related to such incidents.

But first, let’s discuss tips for getting your car loan application approved, as outlined below.

Tips for Getting Your Car Loan Application Approved

Not every car loan application will be approved by lenders, as the amount involved is significant. In addition to the risks associated with the vehicle, lenders or car financing institutions will assess many factors before finally approving your application.

There are at least 6 key points you need to ensure to increase your chances of getting approved. They are as follows:

Maintain a good credit score by avoiding overdue payments on other loans you have. Timely payments on past and current installments will improve your credit score.
Apply for a loan within your means. Carefully review the down payment, installment amount, and repayment period. Make sure everything is well-calculated.
Complete all required documents and paperwork. Ensure nothing is missing when you submit your car loan application.
Set priorities, apply for one loan at a time. Submitting multiple loan applications simultaneously can make lenders doubt your ability to manage repayments.
Always choose a bank or financing institution supervised by the Financial Services Authority (OJK), with clear procedures for loan applications, installment payments, and other legal terms as a solid legal foundation.
Have reliable vehicle insurance to protect your car during the loan period. This will increase your value in the eyes of the lender and improve your chances of approval.

Each institution may have different requirements. Therefore, don’t hesitate to confirm all necessary conditions so you can come prepared and avoid any issues with documentation.

General Overview of Car Loan Simulation

To understand the general picture of a car loan simulation, you first need to know the main components included in the calculation. In general, these components consist of four parts:

Car price as the main variable in the transaction.
Down payment as the initial amount paid at the beginning.
Loan tenor as the duration of the installment period.
Loan interest as the rate applied by the financing institution.

After understanding these four elements, the monthly installment can be estimated using a simple approach. The idea is that the car price is reduced by the down payment, and the remaining amount is adjusted based on the interest rate and the length of the loan period. The final value is then divided evenly according to the total number of months.

For example, imagine the car price is around Rp699 million. You plan to apply for a loan with a twenty-five percent down payment and an eight percent interest rate. The tenor is five years, which equals sixty months.

With this structure:

Estimated down payment: Rp174.75 million
Estimated loan amount: Rp524.25 million
Estimated monthly installment: around Rp12.23 million

You can also use loan calculators available on various automotive platforms to help estimate the monthly payment.

Disclaimer:
Loan calculation methods may differ between financing institutions. Always review the terms and conditions provided by each institution to avoid misunderstandings that could affect your financial planning.

Vehicle Insurance and Car Loan Schemes

Applying for a car loan is generally closely related to the use of Vehicle Insurance, such as those provided by AXA Insurance Indonesia. Vehicle insurance often becomes a mandatory requirement for purchasing a car on credit, as it protects the vehicle from risks such as accidents, theft, or damage.

There are at least two types of insurance for financed cars that can be used: All Risk and Total Loss Only.

1. All Risk

This insurance provides the most comprehensive protection, covering everything from minor damage to major damage, as well as the risk of losing the car due to theft or accidents.

2. Total Loss Only

This type of protection applies in situations where the vehicle is no longer in a usable condition or cannot be retrieved. It is generally used when the damage is so extensive that restoring the vehicle would require a repair cost that is considered very high compared to its condition just before the incident. In other words, this option covers cases where the vehicle is beyond practical recovery, making replacement a more reasonable solution than repair.

Tips to Get Big Discounts on Car Loans

Actually, the tricks to get big discounts when buying a car on credit are quite easy to understand. Financing institutions often offer promos and various benefits to attract you to use their services for purchasing a car.

In general, here are the tricks to get big discounts:

Choose the right time - Usually at the end of the year, the beginning of the year, or during major automotive exhibitions, you’ll find price cuts, light credit options, or other benefit offers.
Don’t rush - Compare offers between dealers and financing institutions. Review the details carefully and choose the one that best suits your situation.
Take advantage of promos and incentives - Whether through credit card offers or government incentives, such as those recently provided for electric car purchases.
Try negotiating the price and bonuses - If you can’t get a direct price reduction, ask about other benefits like free window film installation, coating, or other perks.

In the end, car financing should be carried out with careful and detailed consideration. This is a fundamental step to ensure there are no losses in the future that could disrupt your financial condition.

After understanding the ins and outs of car financing, it’s time for you to also take a closer look at AXA Insurance Indonesia’s Vehicle Insurance. This insurance is essential as one of the supporting factors for credit approval and helps you manage risks that may arise during the ownership period.

AXA Insurance Indonesia’s SmartDrive Insurance is the right option for those planning to apply for car financing. With comprehensive and complete benefits, this insurance provides the protection you need even long after your installment payments are completed during the loan period.

Contact our customer service now and get the right insurance to protect your vehicle at all times with AXA Insurance Indonesia!

Reference:

https://www.acc.co.id/info-terkini/panduan-lengkap-kredit-mobil-syarat-cicilan-ringan-tips-pengajuan-disetujui
https://www.astra-daihatsu.id/outlet/astradaihatsukramatjati/info-cabang/kredit-mobil-baru-5-syarat-agar-pinjaman-mu-disetujui
https://kreditkerenbanget.com/post/tips-agar-kredit-mobil-langsung-disetujui
https://www.seva.id/blog/tips-beli-mobil-akhir-tahun-untuk-dapat-harga-mobil-baru-yang-terbaik-tr
https://www.smsfinance.co.id/news/tips-beli-kendaraan-saat-ada-promo-mobil-murah
https://www.liputan6.com/bisnis/read/3441058/tertarik-promo-kredit-mobil-murah-baca-dulu-5-tips-ini-biar-tak-menyesal?page=3
https://taf.co.id/artikel/tips-membeli-mobil-kredit
https://www.oto.com/mobil-baru/simulasi-kredit
https://setirkanan.co.id/article/cara-menghitung-simulasi-kredit-mobil

Tips for Successfully Applying for a Car Loan and Everything You Need to Know

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