Car loan calculator
Enter the car price, your down payment and the rate your dealer quoted. You get the monthly instalment, the total interest, and the effective yearly rate that a flat quote hides.
The on-the-road price you will be invoiced.
The Hire-Purchase Act sets a minimum of one-tenth of the cash price, RM12,000 on this car.
Bank Negara Malaysia set a nine-year limit on vehicle financing in 2011.
RM1,270.00
Over 108 months on RM108,000 borrowed.
- Amount you borrow
- RM108,000
- Total interest (term charges)
- RM29,160.00
- Total you repay
- RM137,160.00
- Effective rate (the Act's formula)
- 5.50%
A flat rate of 3% costs you about 5.50% a year in real terms, because you pay interest on the full amount even as you pay it down.
Year by year
How each year's payments split between interest and the loan itself. Early years carry more interest.
| Year | Loan repaid | Interest |
|---|---|---|
| 1 | RM9.5k | RM5.7k |
| 2 | RM10.1k | RM5.2k |
| 3 | RM10.6k | RM4.6k |
| 4 | RM11.2k | RM4k |
| 5 | RM11.9k | RM3.4k |
| 6 | RM12.6k | RM2.7k |
| 7 | RM13.3k | RM2k |
| 8 | RM14k | RM1.2k |
| 9 | RM14.8k | RM444 |
| Year | Paid | Interest | Loan repaid | Still owed |
|---|---|---|---|---|
| 1 | RM15,240.00 | RM5,700.34 | RM9,539.66 | RM98,460.34 |
| 2 | RM15,240.00 | RM5,162.38 | RM10,077.62 | RM88,382.71 |
| 3 | RM15,240.00 | RM4,594.08 | RM10,645.92 | RM77,736.79 |
| 4 | RM15,240.00 | RM3,993.73 | RM11,246.27 | RM66,490.53 |
| 5 | RM15,240.00 | RM3,359.54 | RM11,880.46 | RM54,610.06 |
| 6 | RM15,240.00 | RM2,689.57 | RM12,550.43 | RM42,059.64 |
| 7 | RM15,240.00 | RM1,981.83 | RM13,258.17 | RM28,801.47 |
| 8 | RM15,240.00 | RM1,234.18 | RM14,005.82 | RM14,795.64 |
| 9 | RM15,240.00 | RM444.36 | RM14,795.64 | RM0.00 |
A flat-rate loan does not publish a split, so we work it at the exact reducing-balance rate that gives your instalment (5.50% a year). The totals match your instalments.
Why a flat rate costs more than it sounds
With a flat rate, the interest is the loan amount times the rate times the years, and you pay it in equal slices. Borrow RM100,000 at 3% flat for 9 years and the interest is RM100,000 × 3% × 9 = RM27,000. Add that to the loan and divide by 108 months: RM1,175.93 a month.
But from the first month you are repaying part of the loan, and you still pay interest as if you owed all of it. The Hire-Purchase Act's own formula turns that into a yearly rate you can compare with other loans: 5.50% in this example. That formula applies to agreements made before 1 June 2026; the calculator uses it for every flat quote so you have a number to compare.
The rules that apply to your loan
- Reducing balance for new loans. From 1 June 2026, new hire-purchase agreements use the reducing balance method and must state an effective interest rate. Banks have until 31 March 2027 to switch their systems, so a flat quote is still possible for now.
- Nine years at most. The limit Bank Negara Malaysia set on vehicle financing tenure in 2011.
- One-tenth deposit. The Act sets a minimum deposit of one-tenth of the cash price.
- Term charges must be stated.The agreement has to show the term charges, which is the Act's word for the interest.
Questions people ask
+What is the difference between a flat rate and an effective rate?
A flat rate charges interest on the full amount you borrowed for the whole loan, even though you pay the loan down every month. An effective rate charges interest only on what you still owe. So 3% flat is not 3% effective: on RM100,000 over 9 years it works out to about 5.50% a year.
+Which rate should I compare between banks?
The effective rate. Two banks quoting different flat rates over different periods cannot be compared directly, but their effective rates can. Under the 2026 amendment, new agreements must state the effective interest rate.
+Did the law on car loans change in 2026?
Yes. The Hire-Purchase (Amendment) Act 2026 took effect on 1 June 2026. New hire-purchase agreements move to the reducing balance method with an effective interest rate. Lenders have until 31 March 2027 to change their systems, so some banks may still quote a flat rate until then. Agreements signed before 1 June 2026 keep their original terms.
+What is the longest car loan I can get?
Nine years, under the measure Bank Negara Malaysia set in 2011: vehicle financing applications received from 18 November 2011 should not run longer than nine years. We have not yet confirmed the wording in Bank Negara's current responsible-financing rules, so check with your bank. This calculator stops at nine.
+How much down payment do I need?
The Hire-Purchase Act sets a minimum deposit of one-tenth of the cash price. A bigger deposit means a smaller loan and less interest, and your bank may ask for more.
+What happens if I settle the loan early?
For agreements made before 1 June 2026, the Act's statutory rebate, worked out with the Rule of 78, decides how much of the interest you get back. The 2026 amendment removed that rule for new agreements, so ask your bank in writing how an early settlement is worked out on yours.
+What does this calculator not include?
Insurance, road tax, processing fees and any other charge. It works only from the price, deposit, rate and period you enter, so your bank's figure may differ.
Where the figures come from
- Hire-Purchase Act 1967 (Act 212) · term charges, the annual percentage rate formula and the minimum deposit; Attorney-General's Chambers text as at 1 May 2019
- Hire-Purchase (Amendment) Act 2026 (Act A1783) · in force 1 June 2026
- Bank Negara Malaysia: consumer guide to the 2026 amendment · reducing balance, effective interest rate, grace period to 31 March 2027
- Bank Negara Malaysia: responsible financing measures · nine-year limit on vehicle financing, from 18 November 2011
Related
This is general information, not financial or tax advice. The answer is an estimate worked out from the rules and sources listed on this page; your bank, EPF or LHDN has the final figure.