Loans are an invaluable asset that can help tide over expenses and bridge financial gaps. There are numerous loans available, both in Islamic and conventional banking formats. Loans offered range not just in terms of purpose but also only in terms of loan amount available, tenure offered or profit/interest rates charged.
Let’s have a look at the pointers below to know more about the loan or financing facilities offered in Malaysia:
A personal loan is a financing product that helps in fulfilling your personal monetary needs. A personal loan can be obtained for miscellaneous reasons that can include vacations/holidays, medical expenses, marriage, or any other event/affair that requires funding. Through Islamic banking, you can get a personal financing plan based on the Shariah-compliant concepts such as Tawarruq. In Malaysia, a number of top banks offer personal financing by Islamic guidelines.
Depending on a bank, the interest/profit rates involved in a personal loan facility range from 4% p.a. to 14% p.a. and the tenure can go up to 5 or 7 years. As per your eligibility, you may or may not require a guarantor to obtain this type of loan.
Home loans are among the most popular products in the country as they provide borrowers with the required financing to purchase their dream home. A home loan is offered with a fixed or floating interest rate and you can get a financing tenure of up to 35 years, in Malaysia. Most of the top banks including, Citibank, CIMB, AmBank, Maybank, etc. offer a home financing facility with competitive interest rates that can range from 4.45% p.a. (AmBank) to 10.50% p.a. (Bank Muamalat). The facility may come with a lock-in period of up to 5 years, however, some banks also offer a waiver on the lock-in period. Offering a loan tenure up to 35 years or until the borrower attains the age of 70 years, a standard home loan plan can offer a margin of finance (MOF) of up to 100%.
Car Loan/Hire Purchase
A car loan or a hire purchase facility in Malaysia provides you with the funds required to buy a personal or commercial vehicle. You can obtain a brand new car or a used vehicle through this type of financing. Interest/profit rate charged against a car loan can either be fixed or floating wherein the rate is pegged to the Base Rate (BR) offered by a bank. You can acquire a hire purchase facility on a flat or floating rate basis ranging from 2.53% p.a. (BSN) to 12% p.a. (RHB).
A mortgage loan can fulfil your dream of owning a property. Offered with fixed rate as well as flexi rate financing approaches, you can also obtain a mortgage loan offered by Islamic principles by various top banks in the country. In a mortgage loan facility, you have to keep an asset (e.g. a house, a piece of land etc.) as a collateral to a bank or financing institution to get a loan against it. If you fail to make the repayments for that loan, the bank can seize your pledged property and sell it off to recover the losses.
UTAR Loan facility contains a range of educational loan schemes for students pursuing different learning programs. This is an interest-free loan facility. The UTAR scheme is offered by the Universiti Tunku Abdul Rahman (UTAR) to aspiring students who are looking for financial funding for their education and to apprentices who are pursuing programs such as foundation and undergraduate degree courses. Three different types of UTAR loans are offered to the Malaysian citizens: UTAR Student Loan, UTAR Student Bridging Loan, and UTAR Toh Kim Eng Student Loan. You can get a loan amount of up to RM15,000 for every educational year, under this facility. The loan facility can be reviewed each academic year.
A student loan is offered to assist students in paying for their studies and academic expenses. In Malaysia, you can get a student loan through banks, financial institutions, or via government aided programmes.
You can get financial tenures of up to 20 years for a student loan facility with a margin of financing of up to 50% of your academic expenses. A student loan can be a secured or unsecured type of loan and depending upon a bank’s policies, you may or may not need to provide a guarantor for it. Interest rate can range up to 9% p.a. for these schemes. PTPTN (Perbadanan Tabung Pendidikan Tinggi Nasional), OCBC Earn and Learn Education Loan, Education Financing-i by Bank Rakyat, RHB Bank Study Loan, CIMB Bank Study Loan, Skim Prihatin Pendidikan 1Malaysia (SPP1M) by Maybank, UOB Study Loan etc. are some of the top student loan schemes offered in Malaysia.
Fast Approval Personal Loans
In comparison to personal loans, fast approval personal loans are approved and disbursed in a short span of time provided the borrower meets the required eligibility criteria. Some loan schemes, such as RHB Easy-Pinjaman Ekspres can be approved and disbursed within 10 minutes of making an application. These types of loans require lesser documentation work and most of the plans do not ask for any collateral. Based on your credit score, you can get up to RM150,000 through a fast approval personal loan scheme.
Loans for Bad Credit
Credit score is one of the major criterias that is responsible for approval or rejection of a personal loan application. It is very difficult to get a loan if you have a bad/negative credit score. However, some banks or financing institutions do offer loans in this situation. If you have a bad credit score, a bank can also ask for a guarantor while providing you the loan facility. You can also consider a secure credit loan or payday loan to satisfy your monetary requirements.
Loans approved for bad credit may come with higher interest rates and lower financing amounts.
Islamic Housing Loan
Islamic housing loans or financing schemes in Malaysia are based on Shariah compliant concepts of Murabahah, Bai Bithaman Ajil (BBA; which is a sell and buy agreement), and Diminishing Musharakah. Like conventional financing, profit rate charged through an Islamic home financing scheme can be a fixed rate of a floating rate. The Islamic home financing options also provide refinancing services and allows you to refinance conventional loans into Islamic loans as well. You can obtain an Islamic home financing plan irrespective of your religion.
Q. Can I get a student loan if I am below 18 years old?
A. Few banks provide student loan plans for the candidates who are below 18 years of age. In this case, the bank may ask you to provide a guarantor. The guarantor must be your guardian, parent, spouse, or a sibling.
Q. What is the age criteria to apply for a home loan facility in Malaysia?
A. You must be minimum 18 years old while applying for a home loan scheme and your maximum age should not exceed 75 years at the end of the financing tenure.
Q. While getting a home financing facility, can I choose to have more than one joint applicants?
A. Yes, you can apply for a scheme that offers more than one joint applicants on your home loan facility.
Q. What concept is an Islamic car loan/hire purchase offered on?
A. Islamic car loan schemes operate on Islamic banking principles like tawarruq and AITAB (Al Ijarah Thumma Al Bai’). The profit rates of such schemes are dependent on base lending and base financing rates of the lending institution.
Q. Is it compulsory to have a savings or current account with the bank from which you are getting a car loan?
A. No, it is not a mandate to have a savings or current account with the bank to which you are applying for a car loan/hire purchase facility.
Q. What is the car loan or hire purchase variable rate based on?
A. The variable interest rate is based on the Base Lending Rate (BLR) and any fluctuation (increase or decrease) in the BLR, will affect the monthly instalment or the tenure of your car loan.
Q. What is the last date of application for a UTAR loan scheme?
A. You need to submit the application form within two weeks after the commencement of a new trimester. By this time, you must complete the whole procedure and also need to submit all mandatory documents.
Q. Can I use a personal loan to settle my credit card debts?
A. Yes. A personal loan does not require you to use the financing amount for any specific purpose and can be used for a wide variety of purposes.
Q. Can I obtain an Islamic home loan scheme if I am not a Muslim?
A. Yes, you can obtain a home financing scheme that functions as per Islamic principles of banking if you are not a Muslim.