On 6 October 2025, the Hire Purchase (Amendment) Bill 2025 was tabled in Parliament.

For the first time, Malaysia will abolish the Flat Rate and Rule of 72 methods
and adopt the Reducing Balance Method for car loan interest.

In simple terms:

1. You’ll now pay interest only on your remaining loan balance, not the full amount.
2. If you settle early, you’ll finally enjoy real interest savings — not just token rebates.

This reform, led by the Ministry of Domestic Trade and Cost of Living with support from BNM and CCOB, also legalises digital signatures and e-contracts … making hire purchase agreements fully modern and transparent.

The Bill will be debated in Dewan Rakyat on 8 October 2025. A major milestone toward a fairer and more transparent financial system in Malaysia.

Read the full article here:
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