02 July 2026

We are pleased to introduce the Fixed Rate Reducing Balance Method under Hire Purchase (Amendment) Act 2026 (“HPAA”), effective 02 July 2026.

This enhancement marks a significant step towards greater fairness, transparency, and customer protection in Hire Purchase (“HP”) and Hire Purchase-i (“HP-i”) financing.

Under this new method, interest/profit is calculated based on the outstanding principal balance, while maintaining a fixed interest/profit rate throughout the financing tenure, ensuring a clearer and more equitable financing structure.

Key Benefits

• Fixed Interest/Profit Rate – Your interest/profit rate remains fixed throughout the loan/financing tenure.
• Reducing Balance Method – Interest/profit calculated on the outstanding principal balance.
• Enhance Transparency – Greater clarity by presenting financing costs using the Effective Interest/Profit Rate (“EIR/EPR”)
• Greater Savings – Enjoy more savings with early settlement

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