REGULATORY · COMPETITIVE · MALAYSIA
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.
- • Coordinate IT, accounting and sales teams to implement system, process and training changes before or on the effective date.
Who is affected
- • Hire‑purchase providers and lenders
- • Legal and compliance teams at finance companies
- • IT, accounting and operations teams managing instalment‑payment systems
What to watch
- • June 1, 2026 effective date
Source
Topics
Law & Public Safety Regulatory Actions Compliance Finance & Banking Financial Services