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Car Loan Settlement Calculator Malaysia 2025

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What is a Car Loan Settlement?

When you buy a car in Malaysia using a hire purchase loan, you agree to pay the bank in monthly instalments over several years. But if you want to pay off your loan earlier — for example, when you sell your car or refinance — you need to request a car loan settlement figure.

The settlement amount is the balance you must pay to fully clear your loan. This includes the remaining principal and sometimes adjusted interest rebate, depending on your bank’s policy.


How to Use the Car Loan Settlement Calculator

Our calculator helps you estimate the outstanding balance on your car loan at any time. Just enter:

  1. Original Loan Amount – total financing you borrowed.

  2. Loan Period (Years) – tenure agreed with your bank.

  3. Interest Rate (%) – flat or effective annual rate.

  4. Months Paid – how many instalments you have already paid.

Click Calculate, and you’ll see the Settlement Amount, including a breakdown of:

  • Outstanding Principal

  • Rebated Interest

  • Total Settlement Payable

⚠️ Note: Different banks may calculate settlement slightly differently (e.g. Rule of 78 vs daily rest method). Use this calculator as a guide — always confirm with your bank for the final figure.


Why Settle a Car Loan Early?

Many Malaysians choose to settle their car loan before the full tenure ends. The most common reasons are:

  • Selling your car – Buyers usually require the car to be free from outstanding hire purchase.

  • Refinancing – Moving to a lower interest rate loan.

  • Upgrading your car – Settling the old loan before applying for a new one.

  • Reducing debt – Clearing loans early saves you on future interest payments.


How Car Loan Settlement is Calculated in Malaysia

Most banks in Malaysia use either:

  • Rule of 78 (Sum of Digits method): More interest is paid in the early years. When you settle early, you get a rebate on unearned interest.

  • Daily Rest Method: Interest is recalculated daily on the outstanding principal.

Formula (simplified):

Outstanding Balance = Loan Amount × [(1 + r)^n – (1 + r)^t] ÷ [(1 + r)^n – 1]

  • Loan Amount = total financing

  • r = monthly interest rate

  • n = total months

  • t = months already paid

This gives you a close estimate of the amount still owed. Banks will then adjust with their rebate method.


Example Calculation

  • Loan Amount: RM 90,000

  • Tenure: 7 years (84 months)

  • Interest Rate: 3.5% p.a.

  • Months Paid: 24

Estimated:

  • Outstanding Principal = RM 65,xxx

  • Interest Rebated = RM 3,xxx

  • Settlement Amount = RM 62,xxx

This means if you settle after 2 years, you need to pay about RM 62k to clear the loan.


Benefits of Using This Calculator

✅ Fast & free – no need to wait for the bank to send you a statement.
✅ Plan ahead – know how much you need before selling or upgrading your car.
✅ Compare options – see if early settlement or refinancing saves you money.
✅ Works for all banks – Maybank, CIMB, Public Bank, RHB, Hong Leong, AmBank and more.


Car Loan Settlement by Bank in Malaysia

Different banks may call it different names, but the process is similar. Some common searches include:

  • Maybank Car Loan Settlement Calculator

  • CIMB Car Loan Settlement

  • Public Bank Car Loan Settlement

  • Hong Leong Auto Loan Settlement

Most banks will provide a settlement letter upon request, but you can use this calculator first to get a quick estimate.


Frequently Asked Questions (FAQ)

1. How do I request a car loan settlement from my bank?
Contact your bank’s auto financing department. They will issue a settlement statement valid for a few days.

2. Will I save money by settling my car loan early?
Yes, because you avoid paying future interest. However, the savings depend on how your bank calculates rebates.

3. Can I use EPF (KWSP) savings to settle my car loan?
Currently, EPF withdrawals are mainly for housing. Car loan settlement is usually done with personal funds.

4. What happens if I don’t settle and just continue paying monthly?
You’ll pay until the end of tenure. Early settlement is only needed if you want to clear the debt sooner.

5. Is there a penalty for early settlement?
Most Malaysian banks do not charge penalties, but always confirm your agreement terms.


Final Thoughts

Paying off your car loan early can save you money and give you peace of mind. Use our Car Loan Settlement Calculator Malaysia to quickly estimate how much you still owe before making your decision.

👉 Tip: If you are planning to sell or upgrade your car, knowing your settlement figure will help you negotiate better and avoid surprises.