Personal Loans – Everything You Need To Know

You are browsing this website, or you are reading this article because you are interested to know about personal loans. Maybe you want to borrow money, or you just want to learn more about loans.

In fact, many people still do not know the ins and outs of personal financing. If you want to ask the bank, you will be afraid of the bank’s promotion as well.

If you want to know, it can be said that all Banks will try to tempt you to apply for a loan if you ask about anything related to personal loans.

So before you apply for a loan with a bank, why don’t you read the guide we have provided to make it easier for you to understand what a personal loan is and how to apply so that your application is easily approved by the bank.

Contents

What Is A Personal Loan?

In a nutshell, a personal loan is a money that you ‘borrow’ from a financial institution with an agreed interest rate that you pay over a certain period of time.

Those who apply for personal financing use loan money for many things; marriage capital, buying a car, paying Ptptn debts, travel, and so on.

In short, a personal loan is suitable for all things, except starting a business.

Types of Personal Financing

There are two types of personal financing, namely “secured personal loans” and “unsecured personal loans”. What is the difference between these two types of “personal loans”?

Secured Personal Loan

Ini adalah jenis pinjaman yang memerlukan penjamin atau cagaran. Cagaran yang dimaksudkan adalah bentuk hartanah.

Ini bermaksud sekiranya peminjam gagal menjelaskan bayaran loan, bank boleh merampas cagaran atau memindahkan tanggungjawab kepada penjamin.

Pinjaman jenis “secured personal loans” selalunya digunakan oleh individu yang mempunyai rekod kredit yang lemah. Walau bagaimanapun pinjaman jenis ini juga diminati kerana kadar faedah yang lebih rendah berbanding pinjaman lain.

Pembiayaan Peribadi Tak Bercagar (Unsecured Personal Loans)

Ini adalah pinjaman peribadi yang popular pada masa sekarang. Pinjaman ini juga adalah pinjaman bank yang pihak kami uruskan.

This type of loan does not require a guarantor or any collateral. This type of loan is also faster and easier to be approved by the bank if the applicant meets the minimum requirements set.

But this type of loan has a higher interest rate than other bank loans.

Personal Loan Repayment Period

The repayment period is dependent on the type of personal loan approved, and the borrower can choose the repayment period that suits their financial situation.

It can be said that all banks that offer personal loans have a flexible repayment period – as short as 1 year up to 7 years.

For example, AEON Credit offers a financing period of 1 year to 7 years for AEON cash personal loans. Meanwhile, CIMB offers a payment period from 1 year to 5 years for CIMB Cash Plus & CIMB Xpress Cash.

The repayment value depends on the interest rate charged for the personal loan plan.

Personal Loan Interest Rates

Like the payment period, the personal financing interest rate also depends on the type of bank loan applied for.

Each bank charges a different interest rate for its loan plan.

Currently, most banks in Malaysia offer two types of personal financing plans. The type of loan plan I mean here is not “unsecured personal loan” and “secured personal loan”, but sharia-compliant loans and conventional loans.

Since Malaysia’s official religion is Islam, most banks have started offering Shariah-compliant loans using the Bai Al-Inah concept.

In short, the Bai Al-Inah concept bank personal financing plan has a fixed interest rate compared to the regular personal financing plan.

Loan plans that do not use the Bai Al-Inah concept offer variable interest rates. Often this interest rate depends on the value of the loan approved.

For your convenience, we have prepared a personal loan repayment schedule for bank personal loan plans in Malaysia.

You can visit the bank’s personal loan website to see the repayment schedule of each bank that offers personal financing plans 

How to Choose the Right Loan Plan?

Unfortunately, there is no exact answer how to that question. Choosing a suitable loan plan depends on several factors that you need to consider.

Factors such as your financial status greatly influence the personal financing plan you should choose.

You also need to know the purpose for which you want to get personal financing from the bank. Are you desperate and want an instant loan without a guarantor or collateral.

And are you sure you will be able to repay the loan according to the interest rate set by the bank?

Those are among the factors that influence your decision to get a loan.

Using Personal Financing Wisely

Some individuals who are good at managing their finances will choose to get personal financing to buy items – even if they can afford to get those items in cash.

For example from using savings for motors, you can get personal financing for that purpose – and use your savings for a more profitable investment.

Other Things to Consider Before Applying

In addition to the repayment period and the interest rate charged, there are a few other things you need to pay attention to before applying for a loan.

Among the things and terms you need to be aware of:

Loan Terms & Conditions – who wants to read the terms & conditions right? It’s been a long time, it’s confusing. The easiest way to get an explanation of the terms & conditions of the loan is to contact the bank officer directly. They can explain the terms & conditions of the loan. Or if you use our services, you can ask anything related to the loan to us, we will help you.

Penalties – All banks impose late payment penalties or fines. Usually, this amount is 1% of the loan amount. But there are banks that charge more.

Per annum (pa) – This is a term used for “interest rate” or annual interest rate. The longer you take to repay the loan, the higher the value of the interest rate you have to pay.