Personal loans are a great tool to bridge the gap between your finances and your expenses. it serves a multitude of purposes from financing your wedding to consolidating your debt. But the cost or overall affordability of a personal loan doesn’t start and end with the interest/profit rates charged on the personal loan.
You need to take into consideration, the fees and charges associated with personal loans as they can drive up the cost and affect the affordability of the loan.
Common Personal Loan Fees and Charges
- Processing fee: It is a fee that you need to pay to the bank or issuer for processing your loan application. The fee amount can vary from bank to bank and it is non-refundable. Usually, processing fee is a small percentage of your loan amount that a bank may or may not impose on you.
- Early repayment charges: Early payment charges are the charges you will have to pay to the bank when you choose to settle your loan earlier than the chosen tenure of the loan. Some banks may charge a flat amount as early payment fees while some may charge a percentage of the financing amount. Early settlement penalty can range anywhere between 2-5% of your outstanding amount.
- Late payment fees: If you fail to pay the monthly instalment amount on or before the due date, you will have to pay late payment charges on your loan. This fee is usually charged as a fixed percentage of the overdue amount.
- Stamp duty charges: It is a fee that you need to pay to the Malaysian government for stamping the loan agreement between you and the bank or financing institution. Typically, normal stamp duty charges are about 0.5% of the total loaned amount. The charges are imposed as per the Stamp Duty Act 1949.
Fees and Charges of Top Banks in Malaysia
|Personal Loan||Stamp Duty Charges||Early Settlement Fee||Late Payment Charges|
|Maybank Personal Loan||For ASB/ASB2 Financing = RM10 for offer letter For Personal Loan = No fee charged||RM200 when loan settled in first half of the tenure, no fee charged if settled after half the tenure is completed For ASB/ASB2 Financing = No fee charged||1% p.a. on the overdue amount|
|AmBank Personal Financing||RM10||Nil||1% p.a. on the amount in arrears or any other rate as stipulated by Bank Negara Malaysia or as per Islamic Interbank Money Market (IIMM) Rate|
|Bank Islam Personal Financing||As per Stamp Duty Act 1949 (Revised in 1989)||Equivalent to Deferred Profit at the time of settlement||1% p.a. of the overdue amount or as per Islamic Interbank Money Market Rate if you pay after the completion of the tenure|
|RHB Personal Loan||As per Stamp Duty Act 1949 (Revised in 1989)||RM100 or 1% of outstanding loan amount, whichever is higher, if loan is settled within lock-in period||1% p.a. on amount in arrears until arrears have been repaid fully (charged on daily basis)|
|Bank Rakyat Personal Loan||0.5% of the amount financed as per the Stamp Duty Act 1949||Nil||1% p.a. of the overdue amount (during the financing tenure) or as per Islamic Interbank Money Market Rate if you pay after the completion of the tenure|
|CIMB Personal Loan||RM10 (for each letter of offer (not inclusive of GST) and ASB Financing/Term Financing-i secured by ASB certificate) 0.5% of approved financing amount (for Xpress Cash Financing-i) 0.4% of the principal loan amount (for SPF-i ESOS and SPF-i IPO)||Nil||1% of the outstanding amount (for Xpress Cash Financing-i and Cash Plus Personal Loan)|
|UOB Personal Loan||As per Stamp Duty Act 1949||Whichever is higher between 3% of the outstanding balance and RM300||1% p.a. on the total outstanding amount|
|Alliance Bank Personal Loan||0.5% of the approved financing amount||Nil||1% p.a. on the instalment overdue amount|
|Hong Leong Bank Personal Loan||0.50% of the processed loan amount||Nil||1% of the outstanding amount|
|Citibank Personal Loan||0.5% of the total loan amount approved and RM0.15/cheque (for cheque issuance)||3% of the outstanding amount or RM200, whichever is higher (if settled within first two years or within first half of the tenure, whichever is earlier)||1% p.a. until the due is fully settled (calculated on a daily basis)|
The fees and charges associated with personal loans can play a crucial factor in determining the overall affordability of the loan. When opting for a personal loan, make sure you compare the respective fees and charges imposed on the loan and not just the interest rate charged.