Car loans in Indonesia

A car loan (or car installment) is the amount of money that a consumer (you) borrows from a lender (usually a bank or financial institution) to buy a car.

By taking a car loan, the borrower agrees to pay the loan amount included with the agreed interest rate back to the lender in installments over a certain period of time. This agreement is called the Lease-Purchase Agreement.

Sharia credit services are now widely available at finance companies. Prospective buyers can avoid usury, as is common in conventional leasing. There are fundamental differences from conventional and Islamic car loan schemes.

In this sharia scheme, it emphasizes the transparency of profits that the financing institution wants to ask for. The basic concept used is similar to fixed interest. So there is no fluctuation in loan interest in the middle of the installment tenor.

In this motor vehicle loan application agreement, consumers already know in advance how much the installments are per month with the total selling price along with the margin for the leasing party. In this sharia scheme, the concept is that customers will be told how much the price of the new car they want to buy along with the overall margin.

As for the price of the vehicle, the Islamic finance company has locked in a large profit up front to avoid fluctuations in interest when the installments are running. The existence of this sharia financing scheme is also quite helpful for millennials.

Motorized Vehicle Sharia Credit Scheme Simulation, the Installments Do Not Go Up and Down

Islamic credit will be based on a profit sharing system. This means that the profits from the finance company are determined from the start.

In carrying out Islamic credit it does not depend on the amount of market interest rates. In this case the customer will enter into a Murabahah agreement or profit negotiations with the bank.

Usually this is to determine the credit profit in a certain percentage amount. There is also a profit whose amount has been specifically pegged by the Islamic bank.

Because there is no interest fluctuation and the determination of the profit value of a finance company from the start, this is the basis for no usury. This usury usually occurs when there is an additional interest or profit beyond what has been agreed by the buyer and seller or the leasing party.

In fact, there are still some conventional leasing companies that carry out sharia-style loans. They use a fixed interest scheme, so the installment amount will remain the same from the beginning to the end of the tenor. However, conventional leasing just doesn't open up the problem of the benefits being taken.

Motorized Vehicle Sharia Credit Scheme Simulation, the Installments Do Not Go Up and Down

The financing scheme for Islamic credit has been determined from the start, so that we know the profit the financing institution will take. So, the customer already knows that there is an additional credit fee from the price of the car to be purchased.

During the contract, the leasing party will notify potential car buyers. For example, sharia financing will take a profit of Rp. 12 million from the price of a car worth Rp. 120 million in installments for 1 year. The total price for cars provided by Islamic banking to customers is IDR 132 million.

So, the total credit of Rp. 132 million divided by 12 months. So that the installments that must be paid by the customer every month are Rp. 11 million until the end of the credit without any change in the number of installments.

However, this must be calculated again about the amount of the down payment. If the down payment is the same as the installment value, the car buyer will have to pay IDR 11 million flat for a year

Well, if the buyer in the agreement pays down payment of Rp. 22 million, then there is still Rp. 110 million remaining. The calculation is like this:

IDR 132 million - IDR 22 million (DP) = IDR 110 million

110 million were paid in 11 months of installment tenor. So, the installment amount is IDR 10 million flat.

To check how much the monthly commitment is on your next car loan, be sure to use the AutoFun Indonesia Car loan Calculator and determine if you can afford the next perfect car.

Not fines, late fees in Islamic credit installments for donations

So that payments are always on time, sharia financing will provide additional costs as a consequence of any late installment payments.

This fee is actually an infaq whose value has been determined at the beginning of the sale and purchase agreement. The money received is not part of the profit or income for the lender.

Then, the money will be donated entirely to social institutions. Because it uses the sharia system, financial institutions cannot take advantage of late fees. (cicilan mobil)