Personal loans are among the most sought after financial offerings in the realm of banking and rightly so. The personal loans form an integral part of a bank’s portfolio of products and services. The main reason for the popularity of personal loans is that it provides the borrower with the much needed additional financing required.
Unlike Home loans or car loans, loan amounts availed under a personal loan does not require any specific purpose to be disbursed. The money availed can be used in any way deemed fit by the borrower. This makes financing an urgent medical expense or funding a child’s higher education or even consolidating outstanding credit card debts an easy and hassle free process.
To appeal to prospective borrowers, personal loans come in a variety of packages. They may offer competitive interest rates or flexible payment terms or faster approvals. The personal loans available in the market today cater to a wide range of consumers who have different financial needs. Maximum loan amounts, tenures and payment options are some of the distinguishing among personal loans that are aimed to acquire more customers. Certain banks even offer promotions on the personal loans such as lower interest rates or specific tenures to attract new customers. Customers can even avail personal finance schemes offered by Islamic Banking institutions if they wish to avail a product that is Shariah compliant. The below table compares the personal loans offered by various banking institutions in Malaysia.
Compare Personal Loan Interest Rates in Malaysia
|Bank||Bank Personal Loan||Interest Rate||Tenure||Processing Fees||Minimum Income Required||Max Loan Amount|
|Bank Rakyat Personal Loan||3.87%||10 Years||Nil||RM1,000||RM200,000|
|CIMB Personal Loan||4.85%||5 Years||Nil||NA||RM100,000|
|RHB Personal Loan||8.18%||7 Years||Nil||RM 2000||RM150,000|
|Maybank Personal Loan||1. 8% (RM5,000 to RM20,000) |
2. 7% (RM20,001 to RM50,000)
3. 6.5% (RM50,001 to RM100,000)
|Bank Islam Personal Loan||7.85%||5 Years||Nil||RM 1,500||RM 150,000|
|HSBC Personal Loan||10.5%||7 Years||Nil||RM3,000||RM150,000|
|BSN Personal Loan||1. 8% (RM3,000-RM5,000) |
2. 6.50% (> RM5,000 – RM10,000)
|10 Years||NA||RM 3000||RM200,000|
|Ambank Personal Loan||8.00% to 11.99%||8 Years||Nil||NA||RM100,000|
|HSBC Amanah Personal Loan||10.5%||7 Years||Nil||RM 3000||RM150,000|
|MBSB Personal Loan||3.40%||10 Years||NA||NA||RM250,000|
Personal Loan Rates in Malaysia
Personal loan rates in Malaysia vary with respect to the loan scheme and with respect to the bank that offers it. In general, loans that are offered to customers from specific sectors like government sector or some prominent corporate houses, come at a cheaper rate of interest than standard personal loans.
Generally, the rate of interest for personal loans in Malaysia ranges anywhere between 4.49% to 13.75%. The higher the flexibility of personal loan amount and loan tenure, the higher is the rate of interest charged. Rates also differed for loans that offer flat interest and for those that offer a compounding rate of interest.
Personal Loan Guarantor
Most banks in Malaysia do not require a guarantor to sign the loan document since most personal loan schemes are unsecured in nature. However, certain loan schemes do look for guarantors who would sign the application. As a guarantor of personal loan the responsibility of paying off the loan and all related matters lies with you in case the loan borrower defaults.
Since the role of loan guarantor is quite a tricky one, care should be taken to act as loan guarantors only for people who you know very closely. However, applicants with guarantor fetch faster personal finance than others.
Personal Loan eligibility
Different banks have different eligibility criteria to be fulfilled in order to obtain personal loan. However, some generic eligibility guidelines that are applicable to almost all banks are listed below.
- Must be a Malaysian citizen, aged 21 years or above. Certain banks have provisions for non-citizens as well.
- A regular monthly salary that is deemed adequate by the lending bank. Usually it is a minimum income of RM 3000 per month but different banks have different income requirement.
- Proof of steady employment in an organization that is listed under the Bank’s approved list. Self-employed individuals must satisfy specific conditions in order to qualify for personal loan.
- Proof of identity and address (residential address must be in use for a specified duration to be eligible).
- If and wherever needed, a collateral, guarantor or both.
Early Settlement Fees
|Bank||Loan||Early settlement Fee|
|HSBC Amanah||Personal Financing-i
Any Time Money
|None but requires the borrower to give in a 3 month notice prior to settlement
None but requires the borrower to give in a 3 month notice prior to settlement
|UOB||Personal Loan||3% of the outstanding loan or RM 300, whichever is higher|
|Bank Rakyat||Personal Financing-i Private||No fee charged but Ibra will be given|
|Mach by Hong Leong Bank||I.O.U Personal Loan||None|
|Hong Leong Islamic Bank||Personal Financing-i||No fee charged but Ibra will be given|
|Hong Leong Bank||Personal Loan||No but requires three months of notice. If not given, 3 months f interest is charged and a rebate is charged on the remaining interest.|
|Bank Islam||Personal Cash Line-i||No fee charged but Ibra given as per policy of the bank|
|Maybank Islamic||Personal Financing-i||None|
|Maybank||Personal Loan||3% of the outstanding loan or RM 200, whichever is higher|
|Al Rajhi Bank||Personal Financing-i||No fee charged but Ibra given on the date of early settlement|
|Alliance Bank||CashFirst Personal Loan||None|
|Alliance Islamic||CashVantage Personal Financing-i||None|
Quick Cash EDGE
|Standard Chartered Saadiq||Personal Financing-i||None|
|Citibank||Instalment Loan||3% of the outstanding loan or RM 200, whichever is higher|
|AEON||iCash Personal Financing||None|
|RHB||Personal Financing-i for Private
1% of the outstanding loan or RM 100, whichever is higher
|Easy by RHB||Easy-Pinjaman Ekspres||RM 200 when loan is settled within first 6 months|
|CIMB Bank||Cash Plus Personal Loan||1% of the outstanding loan or RM 200, whichever is higher|
|CIMB Islamic||Xpress Cash Financing-i||No fee charged but Ibra given is based on the remaining balance owed to the bank|
Personal Loan Documentation Required
Here is a list of documents that need to be submitted by customers to avail personal finance from a bank in Malaysia.
For Salaried Applicants
- Identity Card Photocopy
- Latest BE form and tax receipts
- Last 3 months salary slip
- Last 6 months saving accounts transactions
For Self Employed Applicants
- Identity Card photocopy
- Latest BE form and tax receipts
- Copy of business registration
- Latest 6 months saving accounts transactions
Personal Loan Installment Calculator
Online calculators are available that help calculate the monthly loan installment. These calculators are easy to use and help in simplifying installment calculation. Users need to simply feed in the require personal loan amount, the applicable rate of interest, the tenure of the loan and the corresponding loan processing charges. The calculator then processes all this data to yield monthly installment as output. Personal Loan Installment Calculator Personal loan installment calculators are extremely useful because they let you know your expected monthly installment even before you have availed personal loan and as such help in better financial planning.
Features of Personal Loans
Personal finance schemes have a lot of unique features and benefits that make them the most preferred financial product in times of urgent financial need.
Personal loans offer various features that are unique to this financial instrument. Listed below are some of the most striking features of unsecured loans.
- Simple and convenient loan application process:
Personal loans have an easy and simple application process. Customers are not required to visit the branch of lending bank frequently. These loans are also available through online application and can be conveniently availed.
- Quick turn-around time:
Banks offer quick and speedy sanctioning of personal loans. These loan applications are processed fast and sometimes even under 24 hours. This makes personal loans an extremely useful financial tool in times of urgent financial needs.
- Generally, higher rates of interest as compared to other secured loans:
Since personal loans do not require collateral to be submitted, these loans are offered at a higher rate of interest than other standard loans. The interest rate on these loans is also dependent upon the monthly income of the loan applicant.
- Nil collateral:
Customers are not required to submit any collateral as security in order to avail personal finance from banks in Malaysia. However, there may be cases where banks offer lower rates of interest if collateral is provided by customer.
- Higher the income, more the personal loan amount:
The personal loan amount any bank offers to a loan applicant is directly proportional to the monthly income of the applicant. Higher monthly incomes generally garner higher loan amounts as compared to customers with low income per month.
- Minimum documentation:
Personal loans require least documentation which makes these loans truly hassle-free and quick to avail. This also makes them an ideal financial instrument in times of urgent financial need.
- Online Application of personal loan:
Many banks in Malaysia offer an option to apply for personal loan, online. This makes availing credit even easier and faster. Some of the top banks which offer this facility are RHB, Citibank, CIMB etc.
Best Personal Loans in Malaysia
The best personal loans in Malaysia not only have the regular features and benefits of ordinary personal finance products offered by Malaysian banks but more. The banks mentioned in this list are based on their turn around time for application process, interest rates, popularity and convenience & availability of payment.
Top Personal Loans in Malaysia
- Bank Rakyat Personal Loan: Bank Rakyat Personal Loan helps borrowers to cater to any immediate and unprepared financial expenses. Since there is no need to put up any security or collateral to get the personal loan, the interest rate ranges reasonably from 7.3% to 8.34% based on the amount and tenure of the loan. Also, personal financing is an ideal option for those individuals who do not have a house ownership or any other property to use as collateral.
- CIMB Personal Loan: CIMB Personal Loan offerings present customers with flexibility, competitive interest rates and variety coupled with great customer service in the form of quick processing, approvals and disbursals. There are attractive offerings for those looking to raise funds quickly and economically. CIMB Personal Loan CIMB bank personal loan products are Cash Plus Personal Loan,ASB Financing and Credit Line Secured Overdraft.
- RHB Personal Loan: RHB Personal Financing offers unsecured personal loans which feature zero processing fees. They can be obtained without a guarantor. This loan is a convenient way to ease financial burdens by obtaining much-needed funds, quickly. The interest rate ranges between 13.45% - 8.18% (again depending on the amount disbursed).
- Bank Islam Personal Loan: The personal loan provided by the Bank Islam offers highest margin of finance that goes up to 100%. The highly uniform policy of the bank which has been kept as hassle free as possible gives the customers a chance to finance their expenses as per their requirements and preferences.
- Maybank Personal Loan: This Maybank Personal Loan personal loan by Maybank is an easy and quick loan which does not require a guarantor and does not charge a processing fee. Any amount up to a maximum of RM1,00,000 can be borrowed for a tenure of 6 years at the most. The monthly installments are low and fixed at an interest rate that varies from 6.5% - 8%.
- BSN Personal Loan: BSN offers its customer personal loans under different schemes to suit its wide customer base. The personal loans are available under different schemes depending on the purpose of the loan. For instance, the ASB Personal Loan is available for customers wanting to buy SB unit trusts. The SCOP Personal loans are available for customers belonging to the Royal Malaysian Police Force.
- Ambank personal Loan: The bank has partnerships with several financial institutions of international stature like ANZ Bank, Metlife and the insurance Australia Group. Currently, AmBank caters to around 6 million customers across the country and has 175 branches. The bank offers services over the weekend which makes it the most accessible bank in Malaysia. Hence, you have a personal loan that comes with great service.
News About Personal Loan
Personal loans tenure restricted to 10 years, while Credit card minimum annual income set at RM 24,000
Datuk Chua Tee Yong, Malaysia’s Deputy Finance Minister made a statement that Bank Negara Malaysia has come to a decision to set the maximum repayment period for 10 year for personal with the intention to protect the interest of consumers. Earlier the repayment preiod for personal loans could go to a maximum of up to 20 years. The Finance minister also said that this has benn done to make sure that the common man is not trapped in debt for a long time paying high rate of interest. It has also been noted that personal loan products have fallen by 20% in the years 2012, 2013, 2014 and 2015.
The Finance minister all informed people that an extra effort to avoid bankrupcy through credit card bills is being done by ensuring that the minimum income requirement for cards are met at RM 24,000 is met.
31st May 2016
Businesswomen rank low on loan defaults in Malaysia at 1.4%
The Malayan government is encouraging loans to business women given their steady track record in repaying loans. The default rate among this borrower category stands at just 1.4% as . This indicated higher financial discipline among businesswomen as opposed to their male counterparts who default rate is 10 times higher.
The Deputy International Trade and Industry Minister further encouraged more women to avail loans such as those offered by Amanah Ikhtiar Malaysia (AIM) as it would help business expansion, mostly small and medium enterprises. AIM has funded over 330,000 women in this respect so far, the total loan value of which amounts to billions of Ringgits. He also indicated hopes for local businesses to become export-oriented.
11th September 2015
RCE Continuous Focus on Quality Loans, with Cautious Sentiments
Loh Kam Chuin, Chief Executive Officer, RCE Capital Bhd, said that the company will continue to keep their focus on loans. The company reported a net profit increase by 37.25% in Q1 net earning results that ended on June 30, 2015.
RCE Capital is a non-bank financial institution, providing people with personal finance solutions to to Malaysian government servants, however stays weary despite achieving a 37.25% rise in net profit to RM 9.44 million and growth in revenue by 23.27% to RM37.49 million in first quarter.
Loh also added, “With regard to the business as a whole, we have to be cautious in the present environment. Definitely the focus is not so much on growing the business but more on ensuring that we continue to have good quality loans.”
He mentioned that the largest contribution of almost 100% was made by consumer financing for its business. Loh added saying, “In terms of our commercial (financing) side, we are not really pushing for it right now. It is a high-risk business. That’s why the focus is more on the consumer financing side,”
The group’s total loan base currently is at RM1.2 billion against last year’s which was was hovering around RM1 billion.
7th September 2015