How to calculate monthly loan repayment in Malaysia

Step 1 — identify the rate type

Malaysian banks quote two ways: - Reducing balance (personal loans, mortgages) - Flat rate (hire purchase / car loans)

Never compare a flat-rate quote with a reducing-balance quote at face value.

Step 2 — apply the formula

Reducing balance: M = P × r × (1+r)^n / ((1+r)^n − 1) where r is the monthly rate.

Flat rate: M = (P + P × annual_rate × years) / (years × 12).

Step 3 — sanity-check with DSR

Add up all monthly debt repayments and divide by net income. Banks expect this Debt Service Ratio under 60%–70%.

Step 4 — use a calculator

Manual maths is fine for a single loan, but to compare scenarios use the Personal Loan Calculator or the Housing Loan Calculator.