1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates fixed monthly payments for car loans. It considers the principal amount, annual interest rate, and loan duration.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (MYR)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( n \) — Loan term in months (years × 12)
• \( PMT \) — Monthly payment amount (MYR)

Explanation: The formula accounts for both principal repayment and interest payment components in each EMI.

3. Car Loan Rates in Malaysia 2025

Details: For 2025, typical car loan interest rates in Malaysia range from 2.88% to 4% p.a. depending on loan tenure and applicant's credit profile.

4. Using the Calculator

Tips: Enter loan amount in MYR, annual interest rate (2.88-4%), and loan tenure (1-9 years). The calculator will show monthly EMI, total repayment, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: What is the maximum car loan tenure in Malaysia?
A: Typically 9 years for new cars, though shorter tenures (5-7 years) are more common.

Q2: How is interest calculated for Malaysian car loans?
A: Most banks use reducing balance method where interest is calculated on the outstanding principal.

Q3: What affects car loan approval in Malaysia?
A: Factors include credit score, income, debt-to-income ratio, and vehicle age/model.

Q4: Are there additional car loan fees?
A: Yes, may include processing fees (1-2% of loan), insurance, and road tax.

Q5: Can I prepay my car loan?
A: Most banks allow prepayment with early settlement fees (typically 1-3% of outstanding).