1. What is Car Loan Eligibility?

This calculator determines how much you can borrow for a car in Malaysia based on your income, desired monthly payment, current interest rates, and loan term. Banks typically approve loans where payments are 15-30% of your monthly income.

2. How Does the Calculator Work?

The calculator uses the present value of annuity formula:

Where:

• \( P \) — Maximum loan amount (MYR)
• \( PMT \) — Affordable monthly payment (MYR)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (years × 12)

Explanation: The formula calculates the present value of all future payments at the given interest rate.

3. Malaysia Loan Requirements

Details: Malaysian banks typically require:

• Minimum income: MYR 2,000/month
• Interest rates: 2.88%-4% p.a. (varies by bank)
• Loan terms: 1-9 years
• Payment-to-income ratio: 15-30%

4. Using the Calculator

Tips: Enter your comfortable monthly payment, current interest rates, desired loan term, and your actual monthly income. The calculator will show your maximum loan amount and eligibility status.

5. Frequently Asked Questions (FAQ)

Q1: What's the minimum income for car loans in Malaysia?
A: Most banks require at least MYR 2,000/month for local cars and higher for imported vehicles.

Q2: How is interest calculated?
A: Malaysian car loans typically use flat interest rates, though this calculator shows equivalent reducing balance rates.

Q3: What documents are needed?
A: Typically 3 months payslips, EPF statements, income tax returns, and identification documents.

Q4: Can I get 100% financing?
A: Most banks finance up to 90% of the car's value for new cars, less for used cars.

Q5: How does loan tenure affect eligibility?
A: Longer terms (up to 9 years) lower monthly payments but increase total interest paid.