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 PMT formula:

Where:

• \( P \) — Principal loan amount (MYR)
• \( r \) — Monthly interest rate (annual rate ÷ 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 ensures you can comfortably afford the car loan without financial strain.

4. Using the Calculator

Tips: Enter the loan amount in MYR, annual interest rate (typical rates in Malaysia range from 2.5% to 4.5% for 2024), and loan term in years (typically 5-9 years).

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 for new cars.

Q2: How are interest rates determined?
A: Rates depend on the bank, your credit score, loan term, and whether the car is new or used. New cars typically get lower rates.

Q3: Are there other fees involved?
A: Yes, there may be processing fees, insurance, and other charges not included in this calculation.

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

Q5: How does this compare to hire purchase?
A: This calculator assumes a conventional loan. Hire purchase agreements may have different terms and calculations.