Loan calculator
Work out your monthly repayment for any loan — and see why the same percentage costs nearly double when it's quoted “flat”, the way Malaysian personal loans are.
Interest charged on what you still owe each month — how home loans and most bank financing work.
The rate shown is illustrative, not a quote — enter the rate your bank offers you.
RM943.56
- Total interest
- RM6,614
- Total repaid over 5y
- RM56,614
Show year-by-year breakdown
| Year | Interest paid | Principal paid | Balance left |
|---|---|---|---|
| 1 | RM2,295 | RM9,028 | RM40,972 |
| 2 | RM1,833 | RM9,490 | RM31,483 |
| 3 | RM1,348 | RM9,975 | RM21,507 |
| 4 | RM837 | RM10,486 | RM11,022 |
| 5 | RM301 | RM11,022 | RM0 |
How this is calculated
Reducing balance uses the standard amortisation formula: your monthly repayment M = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the loan, r the monthly rate and n the months. Early payments are mostly interest; the split flips as the balance falls — open the year-by-year breakdown to watch it happen.
Flat ratecharges interest on the original amount for the whole tenure: total interest = loan × rate × years, split evenly across the months. The flat-to-APR conversion shown with your result uses the Hire-Purchase Act's Seventh Schedule formula — the way the Act turned a flat quote into a comparable annual percentage rate for agreements made before 1 June 2026, when the Schedule was deleted in favour of the effective interest rate.
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Questions people ask
+What is the difference between a flat rate and a reducing balance rate?
A flat rate charges interest on the original loan amount for the entire tenure. A reducing-balance rate charges interest only on what you still owe, so the interest portion shrinks every month. The same percentage costs far more as a flat rate — a 5% flat loan costs about the same as a 9%+ reducing-balance loan.
+Which method does my loan use?
Malaysian personal loans are usually quoted flat. Home loans are always reducing balance. Car loans signed before 1 June 2026 are flat; new hire-purchase agreements from that date move to reducing balance with an effective interest rate under the Hire-Purchase (Amendment) Act 2026, although lenders have until 31 March 2027 to switch their systems, so some still quote flat for now. Your product disclosure sheet states the method — look for 'per annum flat' or 'reducing balance'.
+How do I compare a flat-rate loan against a reducing-balance loan?
Convert the flat rate to its equivalent annual percentage rate — the calculator does this using the annual percentage rate formula in the Hire-Purchase Act's Seventh Schedule. Compare that number against the reducing-balance rate. Never compare a flat rate directly with a reducing-balance rate.
+How is the monthly repayment calculated?
Flat: (loan amount + loan amount × flat rate × years) ÷ months. Reducing balance: the standard amortisation formula M = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where r is the monthly rate and n the number of months — the same maths every Malaysian bank uses for home loans.
Where the figures come from
- Hire-Purchase Act 1967 (Act 212) · AGC updated text as at 1 May 2019; amended by Act A1783 from 1 June 2026. Terms charges disclosure (s 4C), the statutory rebate on early settlement (the Rule of 78, s 2), the Seventh Schedule annual percentage rate formula, and a minimum deposit of one-tenth of the cash price (s 31(1)). The Hire-Purchase (Amendment) Act 2026 deleted the Seventh Schedule and the statutory rebate from 1 June 2026 and requires the effective interest rate instead, so those two now govern only agreements made before that date (the deposit rule is unchanged)
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.