Here are some of the tips on how to apply for a personal loan. The first part of the article will explain on steps to apply for a personal loan in general. The second part will highlight some additional tips on how to apply and choose the suitable personal loan packages in Malaysia.
The first thing to do when applying for a personal loan is to check your credit. Usually, the make and break of a personal loan approval depend on your credit worthiness, whether you qualify or do not qualify. The bank will also offer you an interest rate based on this credit worthiness.
The second step is to research well before you commit to applying for a personal loan package. Therefore, it is good to select and apply for personal loans that have a higher chance of getting approved. It can affect your credit score if the bank or financial institution reject your personal loan application.
The third step is to collect the relevant documents that you need for the loan application. By having these documents ready, you can speed up the process of the personal loan application, whether it is online or in person.
The last general step is to look for local banks and financial institutions that offer personal loan packages in your home country or the country that you are currently residing in. Another alternative is to make an appointment with the loan officer to discuss the options available to you so that you do not mess up.
When applying for a personal loan in Malaysia, it is essential to first understand the purpose of applying for the personal loan. As banks and financial institutions imposed higher interest rates on personal loans as compared to other types of loans due to no guarantor and collateral, you have to review the reason behind your need of the personal loan in the first place. It is advisable to go for a specific type of loan if you are looking to buy an asset. For example, try to apply for a home equity loan if you are planning to buy a house. Due to the fact that specific loans are usually secured by using a guarantor or collateral, they tend to carry lower interest rates. Only choose personal loans if you are left with no other choices.
The second tip is to choose the existing bank you are in as a customer. Put whatever relationship that you have made with your bank all these years into good use. Typically, your regular banker already has an idea on the big picture of your financial history and your current financial situation so this makes it easier for them to approve your personal loan. For example, if you applied for a credit card with the bank previously and making full repayments every month to maintain a good credit history, you are more likely to get the bank to quickly approve your personal loan application and give you good and lower interest rates as well.
If you do not have that good of a relationship with your existing bank or the bank do not give you good and lower rates, the third tip is to shop around for different options. Do not hastily commit to applying for a personal loan package immediately. There are plenty of local banks and financial institutions that offer different types of personal loans in Malaysia and all of them are fiercely competing against each other to acquire more customers. Shop around, ask around, and there is a chance for you to get better terms with a larger loan amount and lower interest rates.
To accurately calculate the monthly repayment based on your loan amount, use online loan calculators that are typically available on most of the local banks’ websites. In addition, certain banks’ websites can also help you to calculate the loan amount that you are eligible for based on your current income and existing debts.
The last tip is to make full use of loan comparators. The process to compare a personal loan package with another personal loan package is time-consuming and troublesome. On top of that, it is possible to make an error in the calculations. Look for third-party websites that offer loan comparators that allow you to compare different personal loan packages from different banks based on the tenure of the loan, interest rates, monthly repayment amount, and etc.
Example of Personal Loan Package in Malaysia
An example of a personal loan package looks like the following:
Maybank Personal Loan
- Hassle free
- Fast approval
- No guarantor and collateral
- Fixed monthly repayment
- Minimum loan amount of RM5000 and maximum loan amount of RM100000
- Minimum loan tenure of 2 years and maximum loan tenure of 6 years
- Interest rates start from as low as 8% fixed rate per annum for loan amount between RM5000 and RM20000, 7% fixed rate per annum for loan amount between RM20001 and RM50000, and 6.5% fixed rate per annum for loan amount between RM50001 and RM100000
- Monthly repayment amount starts from as low as only RM102.78 per month
- No documents stamping
- Fast approval
- Personal Care Insurance Protection
- Malaysian citizen aged between 21 years and 60 years and must not exceed 60 years at the end of loan tenure
- Minimum gross income of RM30000 per annum
- A photocopy of NRIC or MyKad for front and back
- Latest BE form with official tax receipt
- Latest 3 months’ salary slips
- Latest 6 months’ bank savings or current account statements
- A photocopy of Business Registration if you are self-employed
Fees & Charges:
- 1% per annum on loan amount for late repayments
- RM 200 or 3% of outstanding loan amount for early settlements if the loan is settled within first half of the loan tenure