Hire Purchase or Auto Loan Affordability: How much can I afford? How much can I borrow?

As a guide, your monthly repayment on your housing loan and motor vehicle financing should not exceed 33% of your monthly household income.

However, you should also budget for other payments associated with owing a motor vehicle, such as insurance, road tax and expenses for periodical maintenance.

The margin of financing will depend on your credit standing subject to a maximum of 90% of purchase price or any other lower margin of financing fixed by the banking institution.

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Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)

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Knowledge Base ID :   1297
Last Reviewed :   May 22, 2014
Source :   BankingInfo
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