If you rely on Buy Now Pay Later to stretch your salary to month end, the approval process may soon feel less automatic. From 1 March 2026, the Consumer Credit Act 2025 is in force, bringing BNPL providers and several other non bank credit players under a single federal framework.

The law was gazetted on 31 December 2025. It establishes the Consumer Credit Commission, which will regulate selected segments of the consumer credit industry that were previously governed under separate or lighter frameworks.

A Safety Net For Consumer Credit Activities

Banks remain regulated by Bank Negara Malaysia. Licensed moneylenders continue to fall under the Moneylenders Act, administered by the Ministry of Housing and Local Government.

The Consumer Credit Act 2025 introduces a new framework for other segments of the non bank consumer credit industry. This includes Buy Now Pay Later providers, leasing and factoring companies, debt collection agencies, impaired loan purchasers, and debt counselling and debt management agencies.

Under the Act, credit providers covered by this framework must obtain a licence from the Consumer Credit Commission. Credit service providers, such as debt collectors and debt management agencies, are required to register.

The licensing and registration requirements take effect on 1 June 2026. A six month transitional period is provided for affected companies to submit their applications. During this period, existing operators may continue business operations while regularising their status.

The law does not invalidate existing instalment plans or alter agreed repayment terms. Its immediate impact is supervisory and compliance related rather than a change to current pricing or repayment obligations.

Affordability Assessments Formalised In Law

Under the Act, licensed credit providers must assess a borrower’s creditworthiness and affordability before approving new credit.

In practical terms, this affects applications for new BNPL plans, leasing facilities, or other covered products. Providers are required to evaluate whether your existing commitments leave enough room for additional repayments.

If you already have multiple instalment plans or high monthly commitments, you may face lower approved limits or be declined for additional facilities. The impact is on approval of new credit, not on repayments you are already making.

Affordability assessments typically consider your Debt Service Ratio, which measures how much of your income goes towards debt repayments. If you are unsure where you stand, you can estimate your ratio using RinggitPlus’ Debt Service Ratio calculator. 

This gives you a clearer picture of whether taking on another instalment plan is likely to be approved.

Conduct Standards For Fees And Debt Collection

The Act introduces authorisation and conduct standards governing contracts, fee disclosures, and debt collection practices.

Credit agreements must meet prescribed standards. Debt collection agencies and companies that acquire impaired loans must register with the commission and comply with its requirements.

For borrowers who fall into arrears, the debt itself remains payable. What changes is the regulatory oversight over how collection activities are carried out and who is permitted to carry them out.

The Act does not, by itself, set blanket price caps on BNPL charges or automatically reduce late fees. Any pricing adjustments would depend on subsequent regulations or market response.

Gradual Changes Rather Than Immediate Disruption

In the short term, most consumers will not see immediate changes to existing instalment plans.

Over the next one to three years, the more visible effects are likely to be procedural. Expect clearer disclosures, more consistent documentation, and potentially more standardised approval processes across providers that fall under the Act.

Some smaller operators may reassess whether to meet licensing requirements. Larger players are likely to adapt within the new framework. Access to short term instalment credit remains available, but it will operate within tighter compliance and reporting obligations.

For borrowers, the key shift is not in what you owe today, but in how future credit is assessed and how disputes or collection practices are supervised under federal law.

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