No one is self-sufficient; at one point in time, we’ve all needed financial help either to offload a debt or purchase a new home; even the world’s richest man takes a loan. Taking a personal loan sometimes might be the best move.
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What misconceptions have you heard about a personal loan? Do you want to know how to get a personal loan in Malaysia? Stick to this article to get the right answers.
What is a personal loan? How does it work in Malaysia?
A personal loan is a kind of installment loan that an individual or a business organization takes for several reasons;
banks lend amounts ranging from RM4,000 to RM 500,000.
You and your lender must have devised a way through which you are going to repay the loan.
Most lenders allow you to pay back the loan between 1-7 years, depending on the type of loan and the amount in question.
Within that 1-7 years, there is an agreed percentage of money that you will be required to pay every month;
this money is called installments.
Mind you, some banks or lenders may charge a penalty fee if you missed out on any of those monthly payments.
During the repayment period, you will be given a credit score on the CCRIS database;
if you have a low credit score, you may have difficulty obtaining loans in the future.
Types of personal loan in Malaysia
In Malaysia, we have different types of loans; these loan packages have different interest rates and conditions. Below are some types of personal loans:
• Secured loan
As the name implies, you need collateral like property and other assets before being given this loan.
Also, a guarantor with or without property is required. It all depends on the lender’s condition
• Unsecured loan
In this kind of loan, you don’t need collateral, and if you meet the criteria, the lender may not ask for a guarantor
• Islamic loan
This loan is only given out to the borrower, provided it is used for purposes allowed by the sharia laws.
In this kind of loan, compound interest does not apply if you cannot pay the loan.
• Conventional loan
A conventional loan allows the borrower to access the loan, provided it is intended to be used for purposes permitted by the law.
Here, compound interest accrues if you fail to pay the loan as at when due.
How can you obtain a personal loan in Malaysia?
There are two ways to access a loan in Malaysia; it could be offline or online.
The offline method
• Walk into your lender’s office or bank branch
• Discuss with your loan officer
• Present the necessary documents
• Enter the required details into the application form
The online method
• Go online
• Calculate your credit score with the tools provided
• Work out your loan affordability
• Download the summary of your loan application/statement
Who is eligible to take a loan in Malaysia
Before taking a loan, some banks may ask you to register a savings account with them.
Your credit score, loan history, amidst other factors, will determine if you will be given the loan.
Also, there some basic things that your bank or lender may require examples include:
• Your age should fall between 21-60 years
• You must either be a citizen of Malaysia or a permanent resident in that country
• You must either be self-employed or on a salary payroll
• You must have a known place of residence.
There are various banks with different packages; you must check out their loan package (interest and conditions) before settling for one.
Getting a personal loan is good; it helps you meet your goals;
however, it may become a nightmare if you lack the technical know-how. Take a personal loan, responsibly!