How to Calculate Car Loan Tenure in Malaysia (2025 Guide)
Learn how Malaysian banks calculate car loan tenure based on the age of the car and your net disposable income. Discover maximum loan years, affordability rules, and whether you qualify for financing.
How Loan Tenure is Calculated
When applying for a car loan in Malaysia, banks use the following formula to determine your loan tenure:
Loan Tenure = 15 – Age of Car
For example, if you are buying a car that is 5 years old:
15 – 5 = 10 years
Even though the formula allows for 10 years, banks apply further restrictions:
- Maximum loan tenure: 9 years
- Minimum loan tenure: 3 years
Calculating Affordability
Banks also assess whether you can afford the loan by checking your Net Disposable Income (NDI). This is the amount left after deducting fixed monthly expenses such as rent, insurance, utilities, and other loans.
To qualify, you must have at least RM1,500 NDI. Any amount above RM1,500 can be used for your car loan instalment.
Example Loan Calculation
- Net Income: RM4,000
- Monthly Commitments: RM2,000
- Net Disposable Income: RM4,000 – RM2,000 = RM2,000
Since the applicant has RM2,000 NDI, they pass the minimum RM1,500 requirement. This leaves RM500 available for car loan instalments each month.
Loan Instalment Table (Example)
| Loan Amount | Tenure (Years) | Estimated Monthly Instalment |
|---|---|---|
| RM30,000 | 5 | ~RM550 |
| RM50,000 | 7 | ~RM750 |
| RM80,000 | 9 | ~RM950 |
*Figures are estimates only. Actual instalments depend on interest rate and bank approval.
Frequently Asked Questions
Q: What is the maximum loan tenure in Malaysia?
A: The maximum loan tenure is 9 years, even if the formula allows longer.
Q: What is the minimum loan tenure?
A: The minimum is 3 years, even if the car’s age suggests a shorter period.
Q: Can I get a loan for a 10-year-old car?
A: Yes, but the tenure will be limited (usually 5 years or less).
Q: How do banks check affordability?
A: They look at your net disposable income (NDI). You need at least RM1,500 to qualify.
Find the Right Car for Your Budget
Once you know your loan eligibility, explore our wide range of vehicles to find the perfect match for your budget. https://intercontinentalmotor.com/vehicles/
About the Author
This guide is brought to you by the team of automotive experts at Intercontinental Motors. With over 30 years of experience, we are committed to providing valuable insights to help you make informed decisions. For more, learn about our story.