1. What is the Car Loan Payment Formula?

The car loan payment formula calculates the fixed monthly payment required to repay a car loan over a specified term, including interest. This is the standard formula used by banks in Malaysia for fixed-rate car loans.

2. How Does the Calculator Work?

The calculator uses the car loan payment formula:

Where:

• \( PMT \) — Monthly payment amount
• \( P \) — Principal loan amount
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of payments (loan term in years × 12)

Explanation: The formula accounts for both the principal amount and the compound interest over the loan term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps in budgeting and comparing different loan offers. In Malaysia, car loans typically range from 1-9 years with interest rates varying by bank and credit profile.

4. Using the Calculator

Tips: Enter the loan amount in MYR, annual interest rate (typical rates in Malaysia range from 2.5%-5%), and loan term in years (maximum 9 years in Malaysia).

5. Frequently Asked Questions (FAQ)

Q1: What is the maximum car loan term in Malaysia?
A: The maximum tenure for car loans in Malaysia is typically 9 years for new cars and 7 years for used cars.

Q2: Are there other fees involved in car loans?
A: Yes, there may be processing fees, insurance, and other charges not included in this calculation.

Q3: How does interest work in Malaysian car loans?
A: Most car loans in Malaysia use fixed interest rates calculated on a flat rate basis, though this calculator uses reducing balance for more accurate results.

Q4: Can I get 100% financing in Malaysia?
A: Typically no, most banks finance up to 90% of the car's value for new cars and 70-80% for used cars.

Q5: What affects my car loan interest rate?
A: Factors include your credit score, income, loan tenure, car model, and whether it's new or used.