Malaysia Car Loan (Hire Purchase) Calculator

About the Malaysia Car Loan (Hire Purchase) Calculator

Work out the monthly instalment on a car loan in Malaysia, what it really costs, and what you pay to settle it early. Malaysian hire purchase has been priced two ways: at a flat rate, where interest is charged on the whole amount financed for the whole period, and at an effective interest rate (EIR) on the reducing balance, where interest is charged only on what you still owe. The Hire-Purchase (Amendment) Act 2026 moves all hire purchase to the EIR; agreements signed under the old rules keep their flat rate (Bank Negara Malaysia).

Enter the price, your down payment, the rate and the tenure: the calculator gives the instalment, the total interest, the equivalent flat rate or EIR so you can compare offers, a year-by-year and month-by-month schedule, and the balance to settle after any number of instalments, with the statutory rebate (the “Rule of 78”) for flat-rate agreements. Nothing you type leaves your browser.

Without a pass, the free preview shows the monthly instalment in full, with the first rows of the schedule and of the early settlement; a Pro pass unlocks the total interest, the true EIR, the whole schedule, the settlement figures, the summary to copy and the schedule’s CSV.

Common uses

• Work out the instalment before you visit the showroom.
• Turn a dealer’s flat-rate quote into an EIR and compare it with a bank’s EIR offer.
• See how much interest you save by settling early, and the amount to ask your provider for.
• Download the schedule to track your balance year by year.

Flat rate and EIR

At a flat rate, interest = amount financed × flat rate × years, and the instalment = (amount financed + interest) ÷ months. Because the interest is worked out on the full amount for the full term, a flat rate looks about half the real cost: Bank Negara’s guide shows RM100,000 over 9 years at a flat 3% costing RM1,175.93 a month and RM27,000 of interest, the same as an EIR of 5.5% on the reducing balance.

On the reducing balance, each month’s interest = what you still owe × EIR ÷ 12, and the instalment is P × i ÷ (1 − (1 + i)^−n), with i the EIR ÷ 12 and n the months. Always compare offers by their EIR (BNM consumer guide).

Settling early: the statutory rebate

Under section 14 of the Hire-Purchase Act 1967, a hirer may settle at any time, after giving the owner written notice, by paying the net balance: what was originally payable, less the instalments paid and the statutory rebate for terms charges. Section 2 defines that rebate as the terms charges × (1 + 2 + … + r) ÷ (1 + 2 + … + n), where r is the complete months still to go and n the months of the agreement, so rebate = terms charges × r(r + 1) ÷ (n(n + 1)) (Hire-Purchase Act 1967). This “Rule of 78” front-loads the interest: settling a 7-year flat-rate loan after 3 years costs RM354.90 more here than the balance on the reducing balance at the same instalment.

Under the amended Act, interest is only charged on the outstanding principal, so you settle by paying the principal you still owe and no rebate is needed.

The amended Hire-Purchase Act

The Hire-Purchase (Amendment) Act 2026 makes all hire-purchase financing use the EIR and the reducing balance, for fixed and variable rates, lets agreements be signed and sent electronically, and replaces the Base Lending Rate with the Reference Rate. It applies to new agreements; existing agreements keep their original terms, though you and your provider may agree to switch to the new method. Fixed-rate financing is capped at an EIR of 17% for tenures up to 5 years and 16% beyond, replacing the old 10% flat-rate cap; variable-rate financing stays capped at an EIR of 17% (Bank Negara Malaysia). Providers were given a transition period to update their systems, so ask yours which method your offer uses.

Other costs

Bank Negara’s guide tells buyers to have the upfront 10% down payment ready and to budget for insurance or takaful, road tax and upkeep as well as the instalments. The hire-purchase agreement is stamped at a fixed RM10 (Stamp Act 1949, First Schedule item 22(6)), for conventional and Shariah hire purchase alike (Budget 2025 tax measures).

Limitations

• Instalments are rounded to the sen; your provider’s rounding of the instalments and of the last instalment can differ by a few sen.
• Assumes the rate stays the same for the whole tenure; variable-rate financing moves with the Overnight Policy Rate.
• Insurance, registration fees or other amounts financed with the car are not included; add them to the price if your agreement finances them.
• Early settlement assumes you settle on an instalment date; the statutory rebate for insurance and any charges in your agreement are not included.

Privacy

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