How hire purchase works in Malaysia

KiraBoss Editorial· Last reviewed 2026-01-01· 1 min read

Hire purchase is a financing structure where the financier owns the asset until the final instalment is paid.

Amount Financed = Cash Price − Deposit − Trade-in

Try the calculator

Apply this guide to your own numbers.

Term Charges = Amount Financed × Flat Rate × Years

Monthly Instalment = (Amount Financed + Term Charges) / Months

Apply this guide to your own numbers.

Flat rate charges interest on the original principal each year. Reducing balance charges on the outstanding amount only.

Term Charges = Amount Financed × Flat Rate × Tenure Years. They are the total interest cost.

An online estimate is only a guide. Always request an official settlement quotation from your bank.