Malaysia enacts Hire Purchase (Amendment) Act 2026
Change
Malaysia's Hire Purchase (Amendment) Act 2026 comes into force on June 1, 2026.
Why it matters
The Act was gazetted on Jan 30, 2026 and takes effect on June 1, 2026. The amendments abolish the flat interest‑rate method and the Rule of 78 interest‑allocation method for hire‑purchase agreements. The changes align hire‑purchase requirements with the Consumer Credit Act 2025. A transition period may be given to providers that require time to adjust systems, documentation and processes, while providers ready may begin offering agreements under the new amendments from the effective date.
Implications
- • Update interest‑calculation modules, billing schedules and loan amortisation logic to replace flat‑rate and Rule‑of‑78 methods.
- • Revise contract templates, disclosures and compliance documentation to align with Consumer Credit Act 2025 requirements.
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