Work out how much it costs to settle your car, motorcycle, personal or home loan early, and how much interest you really save.
Amount to settle today
RM 39,186.89
24 instalments of RM 1,725.00 left, less a RM 2,213.11 interest rebate
Amount to settle today: RM 39,186.89
For flat-rate hire purchase signed before 1 June 2026 (or up to 31 March 2027 if your bank hadn't switched yet). The Rule of 78 loads interest into the early months, so you save less than you'd expect. Banks also offer a goodwill discount on early settlement of these loans; each bank works it out itself, so ask yours for the exact figure.
Want to pay part of it off, not all? Use the Loan Prepayment Calculator.
Car: RM90k at 3% flat, 5 years, 36 months paid
A RM2,213.11 Rule of 78 rebate, not the RM5,400 a straight-line split would give.
RM39,186.89 to settle
Car: same loan on the new 5.5% effective rate
No rebate needed: you pay only the balance still owed.
RM38,985.80 to settle
Home: RM500k at 4%, 35 years, settled after 2 years
Includes a RM15,000 penalty (3% of the original loan) for settling inside a 3-year lock-in.
RM501,351.08 to settle
How the figures above are worked out — the rules, rates and reasoning behind every line.
How much you save depends on how your loan charges interest. Flat-rate loans (most car and motorcycle loans signed before 1 June 2026, and older personal loans) use the Rule of 78, which loads interest into the early months, so settling halfway saves far less than half the interest.
Loans on an effective rate (home loans, and car loans under the amended Hire-Purchase Act) charge interest only on what you still owe, so settling means paying off the balance. Home loans often add a lock-in penalty in the first few years.
Rule of 78: rebate = total interest × n(n + 1) ÷ N(N + 1), where n is the instalments still to come and N the total. Amount to settle = the instalments still to come − the rebate.
Effective rate: amount to settle = the outstanding principal after the instalments you've paid.
Home loans inside the lock-in period add the penalty from your letter of offer; personal loans may add an early settlement fee. Your bank's redemption statement is the final figure.
On a flat-rate loan the saving is small in the second half because most of the interest is already charged. On an effective-rate loan every ringgit you settle stops interest straight away, but check for a lock-in penalty or settlement fee first.
For car and motorcycle loans signed before 1 June 2026, yes; banks could keep using it for new loans until 31 March 2027. Personal loans on a flat rate are banned from 1 January 2027.
Banks offer it to customers who settle old Rule of 78 hire-purchase loans early, so the balance is closer to what it would be on the reducing-balance method. Each bank calculates it itself; ask yours for the figure.
The first few years (often 3 to 5) after your loan is first drawn down. Settling or refinancing inside it costs a penalty set in your letter of offer.
This page works out the amount to clear the whole loan today. The Loan Prepayment Calculator shows what happens if you pay a bit extra each month or a part lump sum and keep the loan going.
MyKira is free thanks to ads, which may be personalised. See our Privacy Policy.