Malaysian Banks To Offer Goodwill Discount For Early Car Loan Settlement Following Hp Law Reform

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Car loan holders in good standing may qualify for early settlement discounts once the new Hire-Purchase Act abolishes the controversial Rule of 78 interest calculation method. — Picture by Firdaus LatifKUALA LUMPUR, Dec 2 — Malaysian banks will offer a “goodwill discount” to customers with existing fixed-rate car loans who choose to settle their financing early, in a collective move to align with the country’s new, fairer Hire-Purchase Act.
The initiative was announced today by the nation’s main banking associations following the passing of the Hire-Purchase (Amendment) Bill, which will abolish the controversial “Rule of 78” interest calculation method for new loans.
The new law will require all future hire-purchase agreements to use a fairer “reducing balance” method for interest calculation. 
The goodwill discount is the banking industry’s proactive measure to ensure that existing customers, whose loans are still under the old Rule of 78 system, receive comparable treatment if they decide to pay off their loan ahead of schedule.
“Our priority is to ensure every customer feels supported and valued during this change,” the associations said in a joint statement.
Am I eligible for the discount?
You may be eligible for the goodwill discount if you meet three main criteria:
Your loan is a fixed-rate hire-purchase agreement that uses the Rule of 78 method.You choose to settle your loan early, before its original maturity date.Your account is in good standing (e.g., not in arrears for more than 90 days and not under legal action).What do I need to do?
If you wish to settle your hire-purchase financing early, you should contact your respective bank to inquire about your eligibility for the goodwill discount and the application procedure. 
The exact calculation and amount of the discount may vary by bank and will be explained to you upon application.
If you plan to continue your monthly payments as scheduled until the end of your loan tenure, you do not need to take any action.
When does this start?
The goodwill discount programme will begin from the effective date of the new Hire-Purchase (Amendment) Act, which is expected in the first quarter of 2026. 
Banks will notify customers once the new law has officially come into effect. - malaymail

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