Islamic Personal Loan

    Islamic Personal Loan is based on Shariah concept of Tawarruq. The Personal loan facility provides the individuals with funds according to their financial needs at a competitive range of profit rates. Among many other banks and financial institutions offering Islamic personal financing, Bank Rakyat, Bank Muamalat, BSN Bank, and Bank Islam are some of the most popular ones.

    Best Islamic Personal Loans in Malaysia

    Let’s look at some of the examples of the Best Islamic Personal Loan with the profit rates associated to them:

    Personal Loan Maximum Loan Amount Profit Rate For More Info.
    Bank Rakyat Personal Financing-i Private Sector RM150,000 6.16% p.a.
    BSN MyRinggit-i Eksekutif-1 Personal Financing RM200,000 6.00% p.a.
    Bank Islam Personal Financing-i Non Package RM150,000 6.00% p.a.
    MBSB Personal Financing Afdhal-i RM400,000 4.40% p.a. (Flat rate)
    Alliance Bank CashVantage Personal Financing-i RM150,000 8.38% p.a. (Flat rate)

    Profit Rates

    The profit rates for islamic personal loan will defer from bank to bank.

    How Does an Islamic Personal Loan Operate?

    The Islamic personal loans are based on Shariah concept of Tawarruq. Tawarruq is a concept in Islamic banking where a consumer purchases an easily saleable asset from an Islamic bank or a financial institution at a marked up price and he/she chooses to pay for it on a later date, and then sells the assets to raise money. The Islamic Personal Loans are governed by Islamic law as well as the financial industry’s tight regulations.

    Benefits & Features

    Let’s look at the benefits and features of Islamic Personal financing facility:

    • The Islamic Personal Loans come with a high range of financing amounts with up to RM400,000. The maximum loan amount depends upon your monthly income.
    • The application process for the Islamic Personal Loans is hassle-free and has quick.
    • It comes with a flexible range of tenures.
    • You can earn rebate on the unutilised amount if you decide to settle the loan amount before its maturity date.
    • The Islamic Personal Loans may or may not require a collateral for the process depending upon your employment type.
    • It is always recommended to opt for the takaful coverage with your Islamic Personal Loan as it covers your debt in case any unfortunate event should befall you during the loan period leaving you incapable of repaying the loan.

    Fees and charges

    The major fees and charges associated to the Islamic Personal Loan are mentioned in the table below:

    Fee type Fee details
    Processing fee Processing fee can vary from bank to bank.
    Late Payment charges (Before the maturity date) The late payment charges during the loan period are generally 1% p.a. of the overdue instalment amount.
    Late Payment charges (After the maturity date) After the loan period ends, the late payment charges are calculated as per IIMM rates (Islamic Interbank Money Market) on the outstanding principal.
    Early Termination Fee Early termination fee may or may not be charged and it varies from bank to bank.
    Stamp Duty As per the Stamp Duty Act 1949.
    Will Fee or Wasiat A written will is an optional service with your loan and the fee varies from bank to bank.
    Takaful contribution coverage The takaful contribution coverage charges depend on the age of the applicant, tenure, and the financing amount approved under the loan.

    Eligibility Criteria

    The following are the eligibility criteria for the Islamic Personal Loan:

    • For the applicants:
      • The applicants should be Malaysian citizens.
      • The applicants must not exceed their retirement age before the loan facility matures.
      • The Islamic Personal Loan may require an employment criterion as well as an income criterion to be met for the applicants to get the loan.
    • For the guarantor (if required):
      • The guarantor must be a Malaysian citizen.
      • The guarantor must not be older than his/her retirement age before the end of the loan facility period.
      • The guarantor must need to fulfil the employment and income criterion required under a specific bank’s Islamic Personal Loan.

    What documents do I need to prepare ?

    The required documents in order to get the Islamic Personal Loan approved are as follows:

    • The applicants may require to present some or all of the following documents at the time of application:
      • A copy of both sides of NRIC or an ID.
      • Latest 1-6 months’ salary slips.
      • Confirmation letter from the employer stating Name and NRIC No. of the applicant, date of joining, designation of the applicant, monthly salary, and the date of retirement.
    • In cases where there is a requirement of a guarantor, the guarantor needs to be present at the time of application with some or all of the following documents:
      • Copies of both sides of NRIC or ID.
      • Latest 1-6 months’ salary slips.
      • Confirmation letter from the employer that has the following information about the guarantor: Name and NRIC number, monthly salary, date of joining, the designation of the guarantor.

    How to apply for Islamic Personal Loan?

    • Offline application: The Islamic Personal Loan process can be completed at the nearest branch of the particular bank or the financial institution. You must submit the required documents and need to be accompanied with a guarantor (if required) and fill up the application form with necessary details. You can also put in your request through the bank or the financial institution’s hotline numbers.
    • Islamic Personal Loan Online Application: You can also opt to apply for the Islamic Personal Loan online at the desired bank’s website. You need to fill up the application form with necessary details and upload the supporting documents.
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