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. It accounts for the principal amount, interest rate, and loan duration.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula calculates the fixed payment that covers both principal and interest each month, ensuring the loan is paid off by the end of the term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing different loan offers. It also shows the total cost of borrowing.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is a typical car loan term in Malaysia?
A: Most car loans in Malaysia range from 5 to 9 years, with 7 years being common.

Q2: Are there other fees besides the monthly payment?
A: Yes, there may be processing fees, insurance, and other charges. Check with your bank for complete details.

Q3: How does the interest rate affect my payment?
A: Higher rates increase both your monthly payment and total interest paid over the loan term.

Q4: Can I pay off my loan early?
A: Most banks allow early settlement but may charge a penalty fee (usually 1-3% of the outstanding amount).

Q5: What's the maximum loan amount I can get?
A: Typically up to 90% of the car's value for new cars and 70-80% for used cars, depending on the bank.