Are you always tight for cash? Do you struggle to make ends meet every month, living by the month-end salary with is never enough? Are you always calculating how much you need and how much you have to spend and always it seemed to be insufficient? Would a large chunk of money get you on your feet and make things better?
Personal Loans in Malaysia
Wouldn’t it be nice if you have more money than you usually have, at least for a month or two? That’s what people do when they apply for a personal loan. In most cases, a personal loan is used to clear up the financial tightness so that you can free up some cash flow and which will then makes it easier for you on a monthly basis.
Where to apply for personal loans?
If you are planning to apply for a personal loan, there are various places to start looking. Here are some of your options.
- Banks – You can actually get personal loans from most banks. This means that you can literally walk into any bank or call them and ask them about what personal loans they offer. A few banks do not fancy offering such packages like Public Bank while there are some others that encourages a lot of their customers to apply like Bank Rakyat and CIMB Bank.
- Financial Institutions – Besides the banks, there are certain financial institutions that offer personal loans like MBSB which fundamentally is not a bank. However, they do offer quite competitive personal loan packages with very good interest rates while offering very flexible repayment options.
- Licensed Moneylenders – This might not be everyone’s cup of tea as many has the misconception that they might be unscrupulous loan sharks. Take note that they are actually legitimate companies which are registered with the Ministry of Urban Wellbeing, Local Government and Housing. You need to check and validate before borrowing.
What to look out for?
When you apply for a personal loan, there are several factors that you need to consider.
- Interest rate – This is surely the most important factor that you should consider. Most banks offer similar interest rates because it is very competitive. It should usually be around 4-5% per month.
- Repayment period – Consider how long you would want to take the loan for. In most cases, you can take between 3 and 10 years. You will by now be aware that banks would usually want to keep you for a longer period of time because that is where they make recurring income
- Moneylender – It is crucial to select the right moneylender for your personal loan. When you approach a licensed moneylender, it is usually considered as a personal loan because you will be applying for it on your own capacity. Going through a bank is more formal and discussions might not be encouraged. It is either you are eligible or you are not.
- Convenience – You need to look at how you will repay the loan. Most moneylenders require you to do a direct debit so that they are assured of payback. Online banking would be the most common method for convenience while some need you to have a SI or Standard Instruction to bank in monthly
- Affordability – Your monthly repayment amount will be very important as it is usually calculated based on your income. You should not be paying more than one-third of what you have to spend. In addition to that, the moneylender might be paying off some of your current debts like your credit card outstanding balance from other banks, personal loans or other commitments.