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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.

Back to Hire Purchase (HP)'s Contents


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


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Knowledge Base ID :   1301
Last Reviewed :   May 22, 2014
Source :   BankingInfo
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