Answer first

In a quotation that explicitly uses the legacy flat method, the rate is calculated against original principal for every year. Current reducing-balance facilities require different inputs.

How to decide

For a legacy flat-rate document, first reproduce its flat-interest schedule. Then calculate an effective rate from the amount actually received and the dates and amounts of all payments; do not double a flat rate as a shortcut.

A practical process

Confirm the method in each current provider disclosure. When comparing quotations, keep vehicle price, deposit, term and included charges identical and use a reviewed cash-flow solver.

Limits and next step

Maybank states that it adopted reducing-balance hire purchase from 1 August 2026. No current provider effective-rate comparison is published here. Check the linked primary source and its captured date before making a commitment.

Malaysian worked example

Show the working

Inputs

  • legacy RM72,000 quotation
  • 3% flat
  • 7 years

Calculation

  1. legacy flat interest = RM15,120
  2. monthly = RM87,120 ÷ 84 = RM1,037.14

Illustrative resultThe legacy schedule totals RM87,120 before other charges.

Maybank states that it adopted reducing-balance hire purchase from 1 August 2026. No current provider effective-rate comparison is published here.

Sources

AI disclosure: This content is generated by automated systems. Automated checks validate required fields and run selected content and calculation tests; they do not independently verify every claim or source. No individual human reviewed this version unless explicitly stated. Loan Malaysia's operator is accountable for publication, corrections and system oversight. Not licensed for individual financial advice.AI methodology and risk boundaries · Submit a correction