Pinjaman sewa beli: 14 bank mula tawar kaedah baki berkurangan

Severe flooding in Malaysia has displaced thousands of residents, with many losing their homes and livelihoods. As the country grapples with the aftermath of the natural disaster, a new banking system aimed at helping borrowers manage their payments is being implemented. Fourteen out of 20 banks across the nation have already begun offering a new method for calculating the early payoff of loan installments, in line with the amendment to the Agreement on Lease Purchase Contracts.

Minister of Trade and People's Welfare, Sara Hidup, stated that six more banks are committed to transitioning from the traditional equal installment method to the new diminishing balance method by the end of this year. Furthermore, 80% of the 429 registered lease purchase service providers are also moving towards the new method, along with effective interest rates. However, 20% of these service providers have until late March 2027 to complete the transition.

All lease purchase service providers are now required to comply with the new legal framework under the amended Lease Purchase Contracts Act. The amendment effectively nullifies the Rule of 78 method used for calculating initial payments, and introduces a new flat interest rate structure for leases. The Rule of 78 method, which allocates a large portion of the interest at the beginning of the loan, often leaves borrowers with a large remaining balance after an early payoff, which does not accurately reflect the true cost of their loan.

The new diminishing balance method, mandated under the new Act, calculates interest based on the outstanding principal amount.