What is the maximum interest rate on car loan or hire purchase in Malaysia?
The Hire Purchase Act sets the maximum term charges allowed.
Maximum term charges (interest rate):
Fixed rate financing
Not more than 10% flat per annum. Term charges are calculated on initial amount financed over the entire hire purchase (HP) tenure.
Variable rate financing
Not more than 17% per annum. Term charges are calculated at a margin percentage above the base lending rate (BLR) of the banking institution.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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