There are two major types of car loans: fixed rate and variable rate. The interest on a fixed rate car loan does not fluctuate and it features an unchanging instalment amount throughout the entire repayment period; while a variable rate car loan has interest and instalment amount that fluctuates along with the prevailing Base Lending Rate (BLR). In Malaysia, most car loans are the fixed rate variant.
Car buyers with extra disposable income may wish to consider a flexible type of variable rate car loan that allows them to reduce the interest by depositing extra money into a linked account, much like how a flexi home loan works.