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Best Personal Loans in Malaysia

Searching for the low interest personal loan scheme? We have narrowed down a host of personal loan products offered by some of the best banks in Malaysia. Compare, check your eligibility, and apply!
Bankbazaar Best Personal Loans in Malaysia

We found 12 Best Personal Loans in Malaysia
Bank Name
Interest Rate
Loan Tenure
Joining Perks
From 3.99%
1-7 Years
RM50 Tesco Online Voucher BBAZAAR EXCLUSIVE DEAL
What you'll love
What you need
What you need to consider
What it costs
BBazaar Exclusive Deal
From 5.88% p.a. EIR from 10.9% p.a.
2-5 Years
RM50 Tesco Online Voucher BBAZAAR EXCLUSIVE DEAL
What you'll love
What you need
What you need to consider
What it costs
BBazaar Exclusive Deal
From 5.50% p.a.
1-7 Years
RM50 Tesco Online Voucher BBAZAAR EXCLUSIVE DEAL
What you'll love
What you need
What you need to consider
What it costs
BBazaar Exclusive Deal
Profit Rate From 6 % p.a
2-10 Years
Smart Bracelet worth RM200 BBAZAAR EXCLUSIVE DEAL
What you'll love
What you need
What you need to consider
What it costs
BBazaar Exclusive Deal
From 9% p.a. EIR from 12.38% p.a.
1-7 Years
What you'll love
What you need
What you need to consider
What it costs
From 8.20% p.a. EIR from 14.5% p.a.
2-5 Years
What you'll love
What you need
What you need to consider
What it costs
From 8.18% p.a. EIR from 15% p.a.
1-7 years
What you'll love
What you need
What you need to consider
What it costs
From 6.5% p.a.
2-6 Years
What you'll love
What you need
What you need to consider
What it costs
From 6.5% p.a.
2-6 Years
What you'll love
What you need
What you need to consider
What it costs
From 10.5% p.a. EIR from 17.38% p.a.
2-7 Years
What you'll love
What you need
What you need to consider
What it costs
From 9.99% p.a. EIR from 17.96% p.a.
1-5 Years
What you'll love
What you need
What you need to consider
What it costs
From 18% p.a. EIR from 28.88% p.a.
0.6-5 Years
What you'll love
What you need
What you need to consider
What it costs
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  • Personal Loan BYTES FROM OUR KITCHEN

    Compare & get the best personal loan in Malaysia from multiple banks that is best suited for you. Check how much you can borrow and calculate interest rate, monthly loan repayments. We offer you an easy way to find, compare and learn more about personal loans.

    Here are the Best Personal Loans Interest Rates in Malaysia 2018

    Updated on 04th December 2018

    Personal Loan Interest Rate Tenure Min. Income Required Max. Loan Amount

    Standard Chartered Bank Personal Loan

    From 6.99% p.a. 5 years RM2,000 per month RM250,000

    Alliance Bank Personal Loan

    From 8.38% p.a. 1 to 7 years RM3,000 per month RM150,000

    HSBC Personal Loan

    From 5.95% p.a. - - RM5,000,000

    Citibank Personal Loan

    From 5.88% p.a. flat rate 2 to 5 years RM48,000 p.a. RM120,000

    Maybank Personal Loan

    From 6.5% p.a. flat rate 2 to 6 years RM30,000 p.a. RM100,000

    Bank Islam Personal Loan

    From 4.99% p.a. flat rate 6.15% p.a. for floating rate 1 to 10 years RM2,000 per month RM200,000

    Ambank Personal Loan

    From 8% p.a. for fixed rate From 14.13% for floating rate 1 to 5 years RM2,000 per month RM100,000

    AEON Personal Loan

    From 0.8% per month Up to 7 years RM800 per month RM100,000

    BSN Personal Loan

    Flat rate starts from 4.50% p.a. Floating rate is up to 8.95% p.a. Up to 10 years RM800 per month RM200,000

    Bank Rakyat Personal Loan

    EIR starting from 6.41% p.a. Up to 10 years RM1,000 per month. RM200,000

    RHB Personal Loan

    EIR starting from 15% p.a. 1 to 5 years RM2,000 per month RM150,000

    Hong Leong Personal Loan

    EIR starting from 12.38% 1 to 7 years RM24,000 p.a. RM100,000

    Bank Muamalat Personal Loan

    From 5.50% p.a. for fixed rate. Floating rate is capped at 11% p.a. Up to 10 years - RM150,000

    CIMB Personal Loan

    From 10.75% Up to 5 years RM2,000 per month RM100,000

    MBSB Personal Loan

    EIR up to 11.10% p.a. 1 to 10 years - RM400,000

    UOB Personal Loan

    From 9.99% p.a. 1 to 5 years RM24,000 p.a. RM100,000

    Alliance Islamic Personal Loan

    From 8.38% p.a. Up to 7 years RM3,000 per month RM150,000

    Personal loans are one of the most sought-after loans due to the convenience and benefits they provide and the ease with which one can apply for them. But what exactly are personal loans? Personal loans are unsecured loans offered by banks and financial institutions. These loans do not require any form of collateral or a guarantor to acquire and as such are an ideal option when in need of extra financing.

    Unlike specialised loans such as home loans, renovation loans, car loans etc. A personal loan can be used for any personal requirement a borrower may have. Be it consolidating credit card dues or buying a new appliance, the personal loan may be used in any way deemed fit by a borrower.

    A personal loan can be your best friend in emergency situations. With a variety of personal loan schemes available in the market, you can apply for a financing plan that matches your requirement. All you need to check is whether you’re eligible for the loan, the interest/profit rates offered, and the tenure.

    If you have a good credit report, you can be assured that banks would easily approve your loan.

    Let’s take a look at some of the best personal loans available in Malaysia currently.

    Bank Islam Personal Loan: Best for Long-Term Loan

    You can get financing with a fixed profit rate, starting as low as 4.20% p.a., with the Bank Islam Personal Loan There is no lock-in period for the loan. You also have the option to add takaful coverage to the loan. The financing scheme comes with promotional rates for teachers and nurses.

    Minimum annual income requirement: RM24,000 p.a.

    Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Processing Fees
    6.15% p.a. to 13.12% p.a. RM10,000. RM200,000. No processing fees.

    Citibank Personal Loan: Best for Short Term Loan

    With the Citibank Personal Loan, you would get a financing of up to 10x of the gross monthly income or RM150,000. You don’t have to pay any early settlement fees if you cross more than half of the tenure. This means that for a loan with a tenure of 4 years, you can settle the loan with no additional charges if the loan tenure has surpassed a minimum of 2 years.

    Minimum annual income needed: RM48,000 p.a. for both salaried and self-employed individuals.

    Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Processing Fees
    10.9% p.a. to 16.9% p.a. RM5,000.
    • RM120,000 (for new customers).
    • RM150,000 (for existing customers).
    No processing fees.

    Alliance CashFirst Personal Loan: Best for Existing Alliance Bank Customers

    The bank allows easy repayment through its internet banking facility, allianceonline. Alliance CashFirst Personal Loan comes with a flexible tenure and a competitive interest rate. The low monthly instalments adds icing on the cake.

    Minimum annual income needed: RM36,000 p.a.

    Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Processing Fees
    14.73% p.a. to 24.37% p.a. RM5,000. RM150,000. No processing fees.

    BSN MyRinggit SKAP(Super Klasik B) Personal Loan: Best for Low Income-Earners

    BSN provides loans for people with a minimum income of RM18,000 p.a. for the Klasik package, while RM30,000 p.a. is the minimum income required for the BSN Super Klasik B package. Contractual or temporary employees can also apply for the loan with the help of a guarantor. With low interest rates, you have the flexibility of choosing a loan tenure of as low as RM2,500. You do not need to pay any advance fees for the loan. You can also apply for an additional BSN Cash Shield for RM318.

    Minimum annual income needed: RM30,000 p.a.

    Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Processing Fees
    4.60%p.a. to 5.30% p.a. RM5,000. RM200,000. -

    RHB Personal Financing: Best Loan for Business Expansion

    Small business owners go for personal loans rather than business loans for a reason. There’s lesser paperwork required and the application process is convenient and hassle-free. All you need to check is whether the loan is flexible or not. RHB Personal Financing comes offers loans for up to 7 years, which can be helpful when you are setting up or expanding your business. The financing amount can be as low as RM2,000. You can also manage your repayments with the internet banking facility. The financing plan also lets you enjoy rebates under Rule 78.

    Minimum annual income needed: RM2,000 p.m.

    Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Processing Fees
    15%p.a. to 24%p.a RM2,000. RM150,000. -

    Standard Chartered CashOne Debt Consolidation Plan: Best Debt Consolidation Loan

    You can consolidate up to 5 unsecured loans from other banks under the Standard Chartered CashOne Debt Consolidation Loan. You can use your credit card for loan transactions. There are no guarantors or collateral that are required for the loan. You can also choose the tenure for the debt consolidation loan, depending on your requirements. The application process is quick and simple. Excess cash would be disbursed into the Standard Chartered CashOne Savings Account once the outstanding balances are paid off.

    Minimum annual income needed:RM36,000 for both salaried & Self-employed.

    Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Processing Fees
    15%p.a. to 24%p.a RM2,000. RM150,000. -

    Features of a Personal Loan

    • Personal loans are usually unsecured and don’t require a guarantor or any form of collateral.
    • Repayment tenures start from 1 year and can go up to a maximum of 10 years.
    • The loan can be acquired in both, Islamic and conventional banking formats.
    • Renowned for their hassle-free application process and quick disbursal times.
    • Choose between a fixed rate of interest and a floating rate of interest.
    • Borrow anywhere between RM1,000 and a maximum of RM400,000.

    Best Reasons to Apply for a Loan, Compare and Apply Instantly on BBazaar.my

    Eligibility

    The eligibility criteria for personal loans are as follows:

    • Nationality: Most banks in Malaysia offer personal loans to Malaysian citizens and permanent residents only. There are a few banks that offer personal loans to foreign applicants as well.
    • Type of applicant: Unlike larger loans such as a home loan, a personal loan is available only to single applicants. The loan can only be acquired by one person who will be responsible for full repayment of the amount.
    • Age of the borrower: The minimum age of a borrower can range from 18 to 21 years and the maximum age of the borrower will depend on the tenure chosen. The maximum age of the borrower must not exceed 65 years by the end of the loan tenure.
    • Minimum income: Most loans require the borrower to earn at least RM2,000 on a monthly basis. This however depends on the bank. Certain banks require a minimum monthly income of RM3,000 or upwards.
    • Nature of employment: The borrower must have a source of income and can either be a salaried applicant or self-employed applicant. For salaried applicants, most loans require that they be in the service of the current employer for a minimum period of 6 consecutive months. Self-employed applicants are required to have been in business for at least a period of 24 months.

    Top Benefits of Applying for a Personal Loans

    Fast approval loan Fast approval loan
    When you apply for a personal loan, not only is it approved easily, the loan amount is disbursed instantly, usually within 2 to 3 working days.
    Lower interest rates Lower interest rates
    The interest rate charged is much lesser than that of a credit card. While a personal loan is generally offered at 8% p.a. to 11% p.a., credit cards charge 15% p.a. to 18% p.a.
    Hassle-free Hassle-free
    Unlike other loans, you don’t have to submit too many documents when you apply for a personal loan. Moreover, the application process is also smooth and hassle-free.
    Flexibility in use Flexibility in use
    A personal loan can be used in any way deemed fit by the borrower and is not limited in its use to any specific purpose.
    Fixed monthly payments Fixed monthly payments
    Personal loans can be repaid in fixed monthly instalments. So the borrower can plan their expenses in advance and pay off the loan amount easily.
    Debt Consolidation Consolidation
    You can apply for a personal loan and use the amount to consolidate your debt, especially if you have taken a loan or have credit card debt with a high-interest rate.
    Flexible tenures Flexible tenures
    Personal loans come with flexible loan tenures that can even go up to 10 years. The borrower can opt for the tenure they want as per their preference.
    Personal Loan for wedding Planning a wedding
    A personal loan can also provide you with financial support when it comes to planning your dream wedding. You can use the funds received from a personal loan for wedding related expenses.
    Home renovation Home renovation
    With funds available at low interest rates, a personal loan is one of the best financial tools for home renovation and reconstruction.
    Paying for medical expenses Paying for medical expenses
    A personal loan can also be financially helpful during medical emergencies. You can utilise the funds obtained through a personal loan to pay your medical bills.
    Planning a holiday trip Planning a holiday trip
    When you need quick funds for a vacation or a holiday, a personal loan can help you financially. There are multiple loan packages that have processing times going as low as 24 hours.
    Credit score Credit score
    When the borrower pays the monthly instalments on time, it improves their credit score and their overall creditworthiness. This will help them get financial products easily.

    Fees and Charges

    Fee type Fee details
    Processing fee Processing fees may go up to 4% of the total approved loan amount. Some banks don’t charge you any processing fees. The maximum limit for processing fees is RM400.
    Late payment charges (During the tenure) 1% of the total outstanding instalment amount.
    Late payment charges {After the tenure (Only for Islamic banking)} After the maturity of loan facility, the late payment charges are calculated based on IIMM (Islamic Interbank Money Market) rate on a daily basis.
    Wakalah or agency fee Up to RM53.
    Early settlement fee Plenty of banks don’t charge an early settlement fee. In other cases, the maximum amount you need to pay for early settlement of your loan is RM200 or 3% of the total outstanding amount.
    Stamp duty 0.5% of the total amount approved as per the Stamp Duty Act, 1949.
    Takaful or insurance contribution Takaful or insurance contribution depends on the borrower’s age, the approved loan amount, and the loan tenure.
    Advance payment Most banks don’t charge an advance payment. In other cases, you may have to pay an advance fee that’s equivalent to up to 2 months’ instalment amount.
    Will fee (optional) You can get an optional written will or wasiat with your loan. This fee can go up to RM530.
    Interbank GIRO fee An interbank GIRO fee of RM2.12 will be charged per transfer.

    The Lowest Personal Loan Interest Rate in Malaysia

    Personal Loan Interest Rate/Profit Rate
    AmBank Personal Financing-i Starts from 4.30% p.a.
    Bank Rakyat Personal Financing-i Starts from 3.26% p.a.
    Standard Chartered CashOne Personal Loan 0.583% per month
    Alliance CashFirst Personal Loan 8.38% p.a. 
    HSBC Amanah Personal Financing-i Starts from 10.5% p.a. 

    What documents do i need to get a personal loan?

    Salaried Applicants Variable salaried applicants Full commission earners Self-employed applicants
    • A copy of the most recent computerised salary slip of the applicant
    • A copy of the most recent bank statement which can vary from 1 month to the past 3 months depending on the bank
    • A copy of the latest EPF contribution statement
    • A copy of the most recent EA Form or the most recent Form BE with tax receipt
    • A copy of the latest salary slips for the past 3 months
    • A copy of the latest bank statements ranging from the last 3 to 6 months
    • A copy of the latest EPF contribution statement
    • A copy of the most recent EA Form or the most recent Form BE with LHDN payment receipt
    • A copy of the commission statement for the last 6 months
    • A copy of the bank statement showing the crediting of commission earned
    • A copy of the most recent Form B with LHDN payment receipt
    • A copy of the Business Registration Certificate
    • A copy of the latest 6 months’ company bank statement
    • A copy of the latest Form B with LHDN payment receipt

    How to calculate the personal loan monthly repayments?

    Any amount borrowed under a personal loan must be repaid through monthly instalments. Having a vague idea about these instalments prior to applying for a loan is not good enough. When undertaking large financial commitments, it is imperative to get as close to an informed guess as possible as to how much the instalment would amount to.

    In order to calculate the instalment amount and figure out if the desired loan amount can be repaid or not, we can make use of a personal loan calculator. These calculators give borrowers an idea of the payments they would be facing by calculating various parameters such as the loan amount, the tenure, the interest rate charged by the bank, and any additional charges imposed by a bank such as processing fees.

    Borrowers must enter the parameters and click on calculate in order to view their monthly instalments.

    How to Apply for a Personal Loan?

    One should apply for the loan only after carrying out thorough research and comparing personal loans offered by various banks. Once a borrower has decided on the personal loan of their choice, they can apply for it through the following ways:

    • Apply Personal Loan Online: Most banks offer an option of applying for a personal loan online. Borrowers can click on the apply option on the bank’s website and will be redirected to an application form which then has to be duly filled and submitted to the bank along with the required supporting documents.
    • Netbanking: When applying for a loan with a bank that a borrower is already a customer with, they can apply for the personal loan by logging on to their netbanking facility.
    • Leaving contact details with the bank: Many bank websites provide borrowers with the option of leaving their contact details with the bank. The bank will then have a representative reach out to the borrower within 1 or 2 working days and initiate the application process.
    • Offline: Borrowers can also choose to visit the nearest branch of the bank they wish to apply the loan from and request for an application.

    Points to consider before applying for a Personal Loan

    Here are a few points to consider before applying for a personal loan.

    • Have a good credit score: This goes without saying but having a good credit score can be the deciding factor in having a loan approved. Late payments on credit card bills and recently acquired lines of credit can hamper one’s score. Borrowers must check their credit score before putting in an application. If the score is in bad shape, further applications will only lower chances of approval. A borrower must ensure they continue making prompt payments on their other open lines of credit and apply for a loan when their score is in a better standing.
    • Income requirements: Borrowers should make sure they meet the required income criteria set forth by respective banks in order to have their loan applications successfully approved. The higher the applicant’s income, the easier it is to repay the loan.
    • Nature of employment: Many banks consider the nature of employment when reviewing a loan application. For self-employed borrowers, the business must be in operation for a prescribed number of years and should be profitable. For salaried applicants, the monthly salary along with the designation and number of years worked in a company can be a deciding factor. Those who constantly change jobs or have recently joined a company might find it harder to have their loan applications approved.
    • Repayment capability: Regardless of the loan amount borrowed, a borrower must first ensure that they have the capability of making the payment. Borrowers should ensure monthly payments are made on time and that they should go in for a loan only after taking into account their current financial limits.
    • Affordability: This includes the interest rates charged by the bank, the fees and charges of the loan, and other commitments of the borrower. If the borrower has other loans or instalments to pay, it reduces the amount of disposable income left to repay a new personal loan. Borrowers who have a high TDSR also have lower chances of new loan applications being approved.
    • Loan amount: One of the contributing factors of affordability, it is important for borrowers to not only settle on a loan amount that they can utilise correctly but also choose an amount that can be paid off as early as possible.
    • Interest rates: A cornerstone of affordability, the interest rates of a loan can decide how affordable a loan is. Personal loans with longer tenures are especially susceptible to higher interest rates. The lower the rates of interest, the more affordable a loan is.
    • Select the right tenure: Selecting the right tenure can not only help with the repayment capability but can also save the borrower a ton of money. Borrowers should aim to pay off their loan as soon as possible. Shorter tenures will result in higher instalments but the total interest paid will be much lower. On the other hand, borrowers who go in for longer tenures will face lower monthly instalments and while the lower amounts can easily be paid, the overall interest paid throughout the tenure will be much higher. Borrowers should take into consideration their financial constraints and other commitments and expenses and choose an appropriate tenure
    • Avoid multiple applications: When looking for a personal loan, borrowers must steer clear of making multiple applications across different banks. Doing so will send a message of being credit hungry but can hamper chances of successful application.
    • Do the research: When going in for a loan, borrowers should shop around. They must carry out research and take into account not just the interest rates charged but other fees and charges of a loan as well. These additional charges can change the affordability of a loan quite drastically especially when two or more loans offer similar rates of interest.

    How to Apply For a Personal Loan on BBazaar.my?

    Applying for a personal loan scheme on www.bbazaar.my involves a few simple steps:

    Step 1: Visit the official website of BBazaar. (www.bbazaar.my)

    Step 2: Click on the ‘Personal Loans’ tab.

    Step 3: You will find plans offered by multiple banks on this page. Choose any suitable plan and click on ‘Check Eligibility’.

    Step 4: Insert all required personal details to check your eligibility online for the scheme.

    Step 5: You’ll need to provide your monthly income here.

    Step 6: In this step, you’ll need to mention if you have a credit card or a loan with any bank. Click on ‘None’ if you do not have any other credit accounts.

    Step 7: Give the amount of your outstanding debt on existing loans/cards if applicable here. You can also choose to skip this step.

    Step 8: Provide your personal details (optional) to view various exciting offers from different banks.

    Step 9: Apply directly for the scheme of your choice with our partnering bank. You will have to submit your contact number, personal information, and loan details here. Click on ‘Save and Validate’ to apply.

    Currently, BBazaar accepts applications for personal loan offers from Citibank, Standard Chartered Bank, and Alliance Bank.

    FAQs

    Q. Does a personal loan require any form of collateral?

    A. No. A personal loan is an unsecured product and as such does not require the borrower to put down any form of collateral or have the loan co-signed by a guarantor. Some banks do however provide the borrower with the option of doing so in case the loan amount requested is much higher than the available amount offered by the bank.

    Q. Are there any restrictions on the use of a personal loan?

    A. No. Unlike home loans meant specifically for a home, car loans for purchasing a car and education loans meant for pursuing further studies, a personal loan does not require any specific purpose and can be used in any way deemed fit by a borrower. If the borrower meets all the requirements and credit checks set forth by a bank, they are free to use the loan amount anyway way they please, whether it is to consolidate credit card debt or whether it is for more frivolous pursuits.

    Q. How to apply for the loan of my choice?

    A. Once you have selected the loan you want to apply for, you can choose any of the following options:

    • Online: You can log on to the bank website, and select the loan of your choice. Enter the details of your application on the loan, and click on ‘Submit’. A representative from the bank shall get in touch with you and take the process forward.
    • Offline: You can visit any bank branch and request to apply for the loan. It would help if you have all the documents ready for making the application. A bank representative would help you in carrying forward the application process.

    Q. Do I need a credit report to apply for the loan?

    A. When you apply for a loan at a bank, it shall evaluate your credit report before approval. Your performance on the credit report impacts the chances of approval. You can get a credit report online. You can take your time to improve the credit score as required.

    Q. What if I fail to make repayments on time?

    A. The bank would usually charge a late payment fee if your payments are late. The fee may be in the form of a percentage amount of the loan. The bank also has a right to set off the loan, if there are a large number of defaults on the loan. Legal action may be taken if reminder notices are not taken seriously. Lastly, debt collection maybe outsourced to another agency who would have the right to sell non-performing loans to third parties.

    Q. Do I always need a guarantor or collateral for a loan?

    A. It depends mostly on the bank. Not all loans need a guarantor or collateral. Generally, if the minimum income of the applicant is lower than the one required, a guarantor or collateral is require. Read the product disclosure sheet or terms and conditions carefully before applying for the loan.

    Q. Do I need to inform the bank if there is a change in address?

    A. You should inform the bank immediately when there is a change in the contact address. All correspondence and notifications on the loan are sent to the mailing address. Hence, it would be helpful if you inform the bank when you change the address. You can intimate the bank by mail or visiting your nearby branch.

    Q. What are the income requirements for a personal loan?

    A. Most personal loans come with an income requirement of RM2,000 per month or RM24,000 annually. The annual income requirements can change depending on the bank the applicant is borrowing from.

    Q. Can one apply for a personal loan when they do not meet the income requirements?

    A. The income requirements for a personal loan are a major factor in the success of approval of the loan application. These requirements are set forth by banks to ensure that a borrower can repay the loan amount. When a borrower does not meet the income requirements, they will either have their loan application rejected or based on how much they actually earn, will receive a loan with a lower loan amount and a higher interest rate.

    Q. Is there a limit to how much one can borrow?

    A. Yes. Depending on which bank is offering the personal loan, there are maximum and minimum loan amounts that one can borrow. These limits are based on a number of factors such as the salary of an applicant, the occupation, and other factors of their credit score such as repayment history and existing debt.

    Q. What factors decide the approval of a loan application?

    A. There are a myriad of factors that go into the approval or rejection of a loan application. Even with a very high salary, an applicant can stand to have their applications rejected solely based on the fact that they have a high number of existing debts or a poor payment record. Instances of late payments on credit cards can tarnish an applicant’s payment record. The credit utilisation of an applicant can also decide whether an application is approved or not.

    Even multiple applications for a personal loan or credit card can hamper chances of having the application approved as it sends out a message that the applicant is credit hungry and can result in the application being treated as a risk. Chances of approval are higher when borrowers apply for a loan from a bank where they are already a customer.

    Q. Upon successful approval, will a borrower receive the loan amount they requested?

    A. Not necessarily. When an application is approved, a bank has rated the borrower either as a high-risk or a low-risk candidate. The loan amount approved will be based off this rating. Assume an applicant who is an existing customer of a bank applies for a loan and has the application approved. If this applicant has maintained a good record of making payments on credit cards or other lines of credit, meets the income requirements, and has applied for and successfully repaid loans from the same bank numerous times in the past, then the chances of the requested loan amount being granted are quite high.

    On the other hand, if the same applicant applies for a loan from the bank but has an ongoing long-term loan such as a mortgage loan with the bank, then the applicant might only be granted 80% of the desired loan amount as opposed to 100%. Even though the applicant might meet income requirements and has a decent credit score and a good record of repayments, the bank would have deemed the applicant as slightly riskier since a portion of the applicant’s income will go towards servicing existing loans.

    And if the applicant is deemed as high risk then an even lower sum of say, 50% of the requested loan amount might be offered.

    Q. What is the maximum tenure of a personal loan?

    A. Personal loans have a limit of 10 years. However, many banks offer personal loans with tenures ranging from 1 year up to 7 to 8 years. As a good rule of practice, a borrower must aim to repay the loan amount as quickly as possible. This will not only allow them to get over the commitment or burden of debt but can also help them save a lot on interest charges.

    Longer tenures can result in lower monthly instalments but it also means that by the end of the tenure, the borrower would have ended paying a much higher amount due to the interest rate charged. Thus, it is important for a borrower to also take into consideration the affordability of a loan rather than just focus on their repayment capability

    Q. Can one apply for a personal loan if they have been blacklisted by the CCRIS?

    A. Chances of having loan applications approved are quite difficult. Depending on the nature of the blacklist, an application may or may not be approved. If the applicant was blacklisted for having defaulted on a loan a long time ago but has since made significant improvements on their score, the chances of having an application approved are slightly higher. But if the applicant has been blacklisted or filed for bankruptcy recently then it is highly unlikely that their application will be approved. Making multiple applications across different banks can further damage the chances of approval.

    Q. How long will it take for the loan amount to be disbursed?

    A. Disbursal times range from bank to bank. Approval of an application take anywhere between 2 to 5 working days and the loan amount will be disbursed within one working day from date of approval. There are loans that offer faster approval times as well.

    Q. How many personal loans can a borrower have?

    A. While there is no limit to the number of loans one can have, the chances of having new loan applications approved when a borrower already has an open personal loan are quite low. This is because until the loan has been fully repaid, the borrower’s debt servicing ratio will be quite high. Taking on a loan at such times might signal a bank that the borrower is credit hungry and is a high risk candidate.

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