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Calculator · Malaysia 2026

Malaysia Car Loan Calculator

Enter your loan below — monthly installment, EIR, and early-settlement savings, all on one page. Built for the 2026 Hire Purchase Amendment Act.

Your loan

%
Enter a percentage or a ringgit amount. Typically 10% — up to 90% financing allowed.

Pay extra or settle early

Optional — skip if not needed

A one-off lump-sum payment shortens your loan. Your monthly installment stays the same. Leave the amount blank to skip.

month
That's year 1, month 12 of the loan.

Your result

Monthly installment

RM1,273.93
Total interest
RM 17,010.00
Total payable
RM 107,010.00
Flat rate
2.70%
≈ EIR
5.04%

Effective Interest Rate

Loan type

Interest is charged on your reducing balance. Applies to loans signed from 1 June 2026.

Month-by-month

Interest shrinks as the balance reduces — fairer on early settlement.

InterestPrincipal
Show full schedule
MonthInterestPrincipalBalance
1RM 378.33RM 895.60RM 89,104.40
2RM 374.56RM 899.37RM 88,205.03
3RM 370.78RM 903.15RM 87,301.88
4RM 366.99RM 906.94RM 86,394.94
5RM 363.17RM 910.76RM 85,484.19
6RM 359.34RM 914.58RM 84,569.60
7RM 355.50RM 918.43RM 83,651.17
8RM 351.64RM 922.29RM 82,728.88
9RM 347.76RM 926.17RM 81,802.72
10RM 343.87RM 930.06RM 80,872.66
11RM 339.96RM 933.97RM 79,938.69
12RM 336.03RM 937.90RM 79,000.79
13RM 332.09RM 941.84RM 78,058.95
14RM 328.13RM 945.80RM 77,113.15
15RM 324.16RM 949.77RM 76,163.38
16RM 320.16RM 953.77RM 75,209.61
17RM 316.15RM 957.78RM 74,251.84
18RM 312.13RM 961.80RM 73,290.04
19RM 308.08RM 965.84RM 72,324.19
20RM 304.02RM 969.90RM 71,354.29
21RM 299.95RM 973.98RM 70,380.31
22RM 295.85RM 978.08RM 69,402.23
23RM 291.74RM 982.19RM 68,420.05
24RM 287.61RM 986.32RM 67,433.73
25RM 283.47RM 990.46RM 66,443.27
26RM 279.30RM 994.63RM 65,448.64
27RM 275.12RM 998.81RM 64,449.84
28RM 270.92RM 1,003.01RM 63,446.83
29RM 266.71RM 1,007.22RM 62,439.61
30RM 262.47RM 1,011.46RM 61,428.15
31RM 258.22RM 1,015.71RM 60,412.45
32RM 253.95RM 1,019.98RM 59,392.47
33RM 249.66RM 1,024.26RM 58,368.21
34RM 245.36RM 1,028.57RM 57,339.64
35RM 241.03RM 1,032.89RM 56,306.74
36RM 236.69RM 1,037.24RM 55,269.51
37RM 232.33RM 1,041.60RM 54,227.91
38RM 227.95RM 1,045.97RM 53,181.94
39RM 223.56RM 1,050.37RM 52,131.56
40RM 219.14RM 1,054.79RM 51,076.78
41RM 214.71RM 1,059.22RM 50,017.56
42RM 210.26RM 1,063.67RM 48,953.88
43RM 205.78RM 1,068.14RM 47,885.74
44RM 201.29RM 1,072.63RM 46,813.11
45RM 196.79RM 1,077.14RM 45,735.96
46RM 192.26RM 1,081.67RM 44,654.29
47RM 187.71RM 1,086.22RM 43,568.07
48RM 183.14RM 1,090.78RM 42,477.29
49RM 178.56RM 1,095.37RM 41,381.92
50RM 173.95RM 1,099.97RM 40,281.94
51RM 169.33RM 1,104.60RM 39,177.35
52RM 164.69RM 1,109.24RM 38,068.10
53RM 160.02RM 1,113.90RM 36,954.20
54RM 155.34RM 1,118.59RM 35,835.61
55RM 150.64RM 1,123.29RM 34,712.32
56RM 145.92RM 1,128.01RM 33,584.31
57RM 141.18RM 1,132.75RM 32,451.56
58RM 136.41RM 1,137.51RM 31,314.05
59RM 131.63RM 1,142.30RM 30,171.75
60RM 126.83RM 1,147.10RM 29,024.65
61RM 122.01RM 1,151.92RM 27,872.73
62RM 117.17RM 1,156.76RM 26,715.97
63RM 112.30RM 1,161.62RM 25,554.35
64RM 107.42RM 1,166.51RM 24,387.84
65RM 102.52RM 1,171.41RM 23,216.43
66RM 97.59RM 1,176.34RM 22,040.09
67RM 92.65RM 1,181.28RM 20,858.81
68RM 87.68RM 1,186.25RM 19,672.57
69RM 82.70RM 1,191.23RM 18,481.34
70RM 77.69RM 1,196.24RM 17,285.10
71RM 72.66RM 1,201.27RM 16,083.83
72RM 67.61RM 1,206.32RM 14,877.51
73RM 62.54RM 1,211.39RM 13,666.12
74RM 57.45RM 1,216.48RM 12,449.64
75RM 52.33RM 1,221.59RM 11,228.04
76RM 47.20RM 1,226.73RM 10,001.31
77RM 42.04RM 1,231.89RM 8,769.43
78RM 36.86RM 1,237.07RM 7,532.36
79RM 31.66RM 1,242.27RM 6,290.10
80RM 26.44RM 1,247.49RM 5,042.61
81RM 21.20RM 1,252.73RM 3,789.88
82RM 15.93RM 1,258.00RM 2,531.88
83RM 10.64RM 1,263.29RM 1,268.60
84RM 5.33RM 1,268.60RM 0.00

How it works

Most car loans in Malaysia are hire-purchase loans — the bank owns the car until you finish paying. Banks quote a flat rate: a fixed percentage of the original amount, charged every year.

That sounds small, but the true cost is the EIR — a 3% flat rate over 9 years is around 5.5% EIR. From 1 June 2026, banks must show both numbers up front.

Loans signed before 1 June 2026 stay under Rule of 78.

Rule of 78 vs Reducing Balance

 Rule of 78Reducing Balance
Interest calculated onOriginal principalOutstanding balance
Front-loaded interestYes (heavy)No
Fair on early settlementNoYes
Total interest if kept to full tenureSameSame
Applies toLoans before 1 Jun 2026Loans from 1 Jun 2026

A worked example: RM 100,000 over 9 years at 3% flat

Worked example & methodology

Below is the exact arithmetic a Malaysian bank uses to price a hire-purchase loan. Try it against your own offer letter — the numbers should agree to within a few ringgit.

Start with a financed amount of RM 100,000, a 3% per annum flat rate, and a 9-year (108-month) tenure. Total flat interest is RM 100,000 × 3% × 9 = RM 27,000. Total payable is RM 127,000. Divide by 108 months and you get a monthly installment of RM 1,175.93. This number is identical whether the loan is booked under Rule of 78 or Reducing Balance — the difference shows up only in how interest is allocated across the months.

Under Reducing Balance, the calculator solves for the monthly rate r that produces RM 1,175.93 on a standard PMT schedule. That r works out to roughly 0.4565 % per month, or about 5.48 % per annum — the EIR. In month 1, interest is 100,000 × 0.4565 % ≈ RM 456.50, and the remaining RM 719.43 goes to principal. Each subsequent month interest shrinks and principal grows.

Under Rule of 78, the bank weights interest by the sum of digits. With 108 months the weight is 108 in month 1, 107 in month 2, … 1 in month 108. Total weight is 108 × 109 / 2 = 5,886. Month 1 interest is RM 27,000 × 108 / 5,886 ≈ RM 495.41 — heavier than the Reducing Balance equivalent. The remaining RM 680.52 reduces a notional balance, which is why a Rule of 78 schedule looks steeper in the first few years.

Now settle the loan early at month 36. Under Reducing Balance, you pay the outstanding principal plus the current month's interest — typically around RM 72,400 — and walk away. Under Rule of 78, statutory law gives you a pro-rata rebate of unearned interest: roughly RM 27,000 × (72/108)² ≈ RM 12,000 is rebated, leaving you to pay RM 27,000 − 15,000 paid so far − 12,000 rebated ≈ RM 100,000 − 36 × principal portion ≈ RM 75,900. The gap — about RM 3,500 in this example — is the cost of Rule of 78.

Common mistakes to avoid

Most of the questions we get about car-loan numbers trace back to one of these traps. Check yours against the list before signing the offer letter.

  1. 01Comparing flat rates between banks at face value

    A 2.9% flat rate over 5 years is meaningfully more expensive than a 3.2% flat rate over 9 years on an EIR basis. Always compare on EIR or total interest, never on the headline flat rate alone.

  2. 02Assuming early settlement saves all remaining interest

    Under Rule of 78 it doesn't — a statutory pro-rata formula returns only a fraction of the unearned interest. Under Reducing Balance it largely does, because interest is already pegged to the outstanding balance.

  3. 03Ignoring insurance and processing add-ons

    Comprehensive insurance and JPJ fees are typically excluded from the quoted flat rate but rolled into the loan via separate add-ons. They can quietly add 4–6 % to the financed amount.

  4. 04Stretching tenure to lower the installment

    Each extra year of tenure adds another full year of flat interest. A 9-year loan can cost 80 % more in interest than a 5-year loan at the same rate. Use the calculator to test 5/7/9-year scenarios side by side.

  5. 05Forgetting that the bank still owns the car

    Hire purchase is a 'sewa beli' agreement — the bank holds title until the final installment clears. Selling or modifying the car without the bank's consent is a breach. Always settle (or get bank consent) before changing ownership.

Questions, answered

10 items
What is the Rule of 78 in Malaysia car loans?

Rule of 78 is a method banks use to allocate interest across a hire-purchase loan. It front-loads interest: more of your early installments goes to interest, less to principal. If you settle early, you save less interest than you would expect.

What is Reducing Balance and what changes on 1 June 2026?

From 1 June 2026, Malaysia's Hire Purchase Amendment Act 2026 requires banks to calculate interest on your outstanding balance each month instead of the original principal. As you pay down the loan, your interest portion shrinks — which makes early settlement materially fairer. The Act also lets HP agreements be signed digitally.

What is EIR (Effective Interest Rate)?

EIR is the true annualized cost of a loan, calculated on the reducing balance. A 3% flat rate over 9 years works out to roughly 5.5% EIR. From 1 June 2026, banks must disclose EIR upfront so you can compare offers apples-to-apples. EIR caps sit around 16–17% for most car loans.

Can I settle my car loan early in Malaysia?

Yes. Under the new Reducing Balance method, the outstanding balance is calculated transparently and early settlement is fair. For pre-2026 loans still under Rule of 78, some banks offer a 'goodwill discount' if your loan is in good standing — ask your bank.

Does this calculator apply to my existing loan?

If you signed your hire-purchase agreement before 1 June 2026, the Rule of 78 method still applies to your existing loan. Pick the Rule of 78 tab to model your existing loan, and Reducing Balance for any new loan you are comparing.

Why does my Rule of 78 loan save so little when I settle early?

Under Rule of 78, the bank front-loads interest using a sum-of-digits weighting. Roughly two-thirds of a 9-year loan's total interest is booked in the first half of the tenure. When you settle early, only the 'unearned' interest in the remaining months is rebated — but a pro-rata statutory rebate further trims what you actually save. Settling at month 36 of a 108-month loan typically saves only 15–25 % of the remaining interest, not the 67 % you'd expect from a simple balance calculation.

How is the maximum financing margin set in Malaysia?

Bank Negara Malaysia caps hire-purchase financing at 90 % of the on-the-road price for most borrowers, with a maximum tenure of 9 years. Used cars and lower-credit applicants may be capped at 80 % or less. Always confirm the actual margin with your dealer's panel banks before signing the order form.

Does the flat rate include insurance, road tax and processing fees?

Usually no. Banks quote the flat rate on the financed amount only. Insurance, road tax, JPJ ownership claim fee and stamping are paid up-front or rolled into a separate 'soft loan' — they are not part of the installment interest. Check the offer letter line items before signing.

What is the difference between flat rate and reducing-balance rate quotes?

A flat rate is applied to the original loan amount every year; a reducing-balance rate is applied only to what you still owe. For the same monthly installment, the equivalent reducing-balance (EIR) figure is roughly 1.8× the flat rate over a 9-year tenure. This calculator solves for that EIR so you can compare offers properly.

Can I refinance an old Rule of 78 loan into a new Reducing Balance one after 1 June 2026?

The Act does not automatically convert existing loans — banks must finish migrating legacy loans by 31 March 2027. In the meantime you can apply for a fresh refinancing facility from another bank, but you'll typically incur an early-settlement amount on the old loan plus stamp duty on the new agreement. Use the calculator's 'settle early' mode to test whether it's worth it.

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