Home
Back
Car Loan Payment Formula:
| From: | To: |
The car loan payment formula calculates the fixed monthly payment required to repay a car loan over a specified term. It accounts for the loan amount, interest rate, and loan duration to determine the monthly installment.
The calculator uses the standard loan payment formula:
Where:
Explanation: The formula calculates the fixed payment needed to fully amortize the loan over its term, accounting for both principal and interest.
Details: Understanding your monthly payment helps with budgeting and financial planning. It also allows you to compare different loan offers and terms.
Tips: Enter the loan amount in MYR, annual interest rate as a percentage (e.g., 3.5 for 3.5%), and loan term in years (typically 5-9 years for car loans in Malaysia).
Q1: What is a typical car loan term in Malaysia?
A: Most car loans in Malaysia range from 5 to 9 years, with some lenders offering up to 10 years for certain vehicles.
Q2: How are interest rates determined for car loans?
A: Rates depend on the vehicle type (new/used), loan amount, tenure, and your creditworthiness. New cars typically have lower rates than used cars.
Q3: What other costs should I consider when buying a car?
A: Besides the loan payment, factor in insurance, road tax, maintenance, fuel, and potential depreciation of the vehicle.
Q4: Can I get a 100% financing for a car in Malaysia?
A: Most banks finance up to 90% of the car's value for new cars and up to 80% for used cars. The remaining amount is the down payment.
Q5: Is it better to choose a shorter or longer loan term?
A: Shorter terms mean higher monthly payments but less total interest paid. Longer terms reduce monthly payments but increase total interest costs.