Goodwill discounts for early settlement of existing Hire-Purchase Agreements, to commence upon the effective date of the Hire Purchase (Amendment) Act
In line with the joint media statement by The Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) and the Association of Development Finance Institutions of Malaysia (ADFIM) released on 16 March 2026, Public Bank will be providing goodwill discounts for eligible customer who choose to early settle their existing fixed-rate hire-purchase financing which apply the Rule of 78 method.
The goodwill discount programme will be effective starting from the effective date of the Hire Purchase Amendment Act 2026 (HPAA), which will take effect on 1 June 2026.
Who is eligible?
Individuals and micro or small businesses with fixed-rate hire-purchase agreements and/or which apply the Rule of 78 method:
- Hire purchase agreement was entered into before 1 June 2026 or during the transition period ending 31 March 2027; and
- who choose to settle their hire-purchase financing early i.e. any time before loan or financing maturity.
Eligible criteria?
At the point of early settlement, the customer’s account must not be:
- in arrears exceeding 90 days;
- under legal action or issued with repossession order; or
- under an existing restructuring and rescheduling (R&R) or enrolled in a formal debt management programme.
What is the discount
- The goodwill discount will be calculated based on the features of the existing hire-purchase agreement (such as financing tenure, timing of early settlement and rate structure) and applied to the net balance due. The intention is to offer early settlement treatment that is broadly comparable to the approach under the amended Act.
- The exact discount and details will be given to customer at the point of application for early settlement.
The details of the goodwill discounts and operational mechanism will be notified and implemented after the effective date of the HPAA.
