Cash woes? A personal loan to the rescue!

    Personal Loan for Tax Payments

    A personal loan is appreciated for its usability in all possible situations. But, did you know that you could get a personal loan to pay income tax?

    You can take a personal loan to pay income tax to the Internal Revenue Service (IRS) before the due date and escape from late payment penalty.

    Is it Legit to Borrow a Loan for Tax Payment?

    It is legitimate for you to borrow a personal loan to pay your taxes. Like any other personal loan, you need to have a good credit score as a mandatory factor to get through the application process.

    The loan amount will be determined based on your debt service ratio. This ratio verifies if you can afford to pay the monthly instalments along with the other commitments you have.

    Is Tax Applicable on a Personal Loan?

    If you consider a personal loan as a form of income, then you are wrong. A personal loan is a sum you are borrowing and you will be re-paying in monthly instalments to clear the loan, in addition to a percentage of interest. So, it is not considered as an income and is not applicable to calculate your income tax.

    In a particular situation, where the money lender doesn’t want you to repay the loan, you will have to pay the tax for the borrowed amount. However, this may be a rare case.

    Types of Income Accountable to Pay Tax

    • Employment.
    • Business.
    • Discount.
    • Dividend.
    • Interest.
    • Royalty.
    • Rent.
    • Pension.
    • Annuity.
    • Premium.
    • Other sources.

    Compare Best Personal Loans for Tax Payment

    Bank Personal Loan Interest Rate/Profit rate Tenure Processing Fees Minimum Income Required Max Loan Amount More Info.
    Maybank personal loan From 6.5% p.a 2 to 6 years Nil RM30,000 p.a. RM100,000
    Bank Islam personal loan From 4.99% p.a 1 to 10 years Nil RM2,000 per month RM200,000
    Ambank personal loan 8% p.a. to 11.99% p.a.  1 to 5 years Nil RM2,000 per month RM100,000
    RHB personal loan From 8.18% p.a. 1 to 5 years Nil RM2,000 per month RM150,000
    AEON personal loan from 0.8% p.m. Up to 7 years Up to 4% of the financing amount RM800 per month RM100,000
    Bank Rakyat personal loan from 5.09% p.a. Up to 10 years Nil RM1,000 per month. RM200,000
    Hong Leong bank personal loan From 9% p.a. 1 to 7 years Nil RM24,000 p.a. RM100,000
    CIMB personal loan From 10.75% p.a. Up to 5 years Nil RM2,000 per month RM100,000

    Hassle-free e-Filing Process

    Now that your question on personal loan is solved, it’s time for you to move ahead and know how to file income tax in a hassle-free way. Instead of complicating things with a paper and a pen, Malaysian government offers you a facility to file your income tax online. This makes the process simple especially to those who are filing their taxes for the first time.

    1. Register Online: If you are filing your taxes for the first time, then you must register yourself online as a taxpayer on the IRS website. You need to enter details, such as your MyKad number and other personal details. On successful registration, you will be given an income tax number. This number will be helpful for the government to keep track of your financial transactions.
    2. Choose the Form: When you log in to your account you can choose the type of application form applicable to you i.e., there are different forms for individuals and for businesses.
    3. Declare your Income: Fill the application form without excluding any of your income details. You can find the necessary details in the EA Form provided by your employer.
    4. Include Details on Tax Relief and Exemptions: If your income includes any tax reliefs and exemptions, specify them in the form. Make use of the leeway offered by IRS. Enter the details accurately so you don’t have to pay tax unnecessarily.
    5. Verify the Total Tax Amount: Check for inconsistencies and verify if the total tax you have to pay as shown on the website is equal to what you have calculated. If there are any discrepancies, you must check all the income you have declared again to make sure you are on the same page with the system.
    6. Declare: Once you are sure that every single detail has been entered in the online form, you can declare that all the information is true, approve of the form using the e-Signature feature, and send it to IRS for further processing.
    7. Tax Payment: The final step is to pay the amount you have agreed upon with IRS in your e-filing. Payment can be as simple as swiping your credit card. You can also pay the tax via ATM, collection agent, or online funds transfer based on your convenience.

    The crucial part about tax payments is the accurate calculation. When you are sure how much tax you will be paying for the year, you can gauge the amount you can afford from your pocket and the amount you are falling short of. The amount you are short of can be arranged via a personal loan.

    Just don’t forget to check for all the available options from different banks. Choose the right bank which offers the amount you are looking for at a low-interest rate and a sufficiently long repayment tenure. Otherwise, you will be burdened with an unaffordable monthly instalment.

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