The Hire-Purchase (Amendment) Bill 2025 has been passed, introducing digital signatures and reforming interest calculations for consumer loans.
KUALA LUMPUR: The Dewan Negara has passed the Hire-Purchase (Amendment) Bill 2025.
The bill aims to modernise the legal framework by incorporating digital technology into formal agreements.
Deputy Minister of Domestic Trade and Cost of Living Datuk Dr Fuziah Salleh said the amendments to the Hire-Purchase Act 1967 include 22 new clauses.
These clauses recognise digital signatures, electronic documents and digital verification methods as legally valid.
She added that while new electronic methods will be allowed, traditional physical procedures will remain an option for users.
A key reform is the repeal of Regulation 78 for fixed-rate hire-purchase loans.
This change will calculate interest based on the outstanding loan balance instead.
“The savings will be greater if users choose to settle the hire-purchase contract early, as Regulation 78 previously caused higher interest payments at the start of the loan,” Fuziah said.
She explained this allows borrowers to better understand the breakdown of their monthly instalments.
The bill was approved by a majority vote following debates by 11 senators.
