Cash woes? A personal loan to the rescue!

    Student Loan

    A student loan or a study loan is a type of loan that is designed to assist students to pay for their studies and academic expenses such as tuition, study materials, as well as staying (hostel, food etc.) expenses. The study loans are commonly given for post-secondary learning courses. At times, government programs also assist a student to get a student or study loan. Most of the banks and financial organisations offer student loans in Malaysia. A student loan covers academic courses ranging from undergraduate programs, degrees to higher education courses. Banks or financial service institutes operating on conventional or Islamic concepts of banking offer the student loans to the eligible candidates.

    Features and benefits of a Student Loan

    • Applicants can opt for a study loan or a student loan for courses that they are pursuing in any private and government affiliated educational institutes.
    • A student loan can be a secured or an unsecured personal loan scheme. Depending on the structure that an applicant has opted for, he/she needs to provide a collateral or guarantor to obtain the loan.
    • Most Malaysian banks provide student loans under the personal loan facility.
    • A student can ease the financial burden on himself or his family through a student loan or study loan as it allows him/her to complete the studies and pay off the loaned sum later when he/she starts earning.
    • The tenures offered for a student loan span up to 15 years.
    • Banks or financing institutes offer a cover of up to 50% or more, on the educational expenses of a student.

    Interest rates for a Student Loan

    The interest rates are dependent on the amount financed and tenures involved. The interest rates offered by different lenders in Malaysia range from a minimum of 1% up to 8%. Some student loan schemes like UTAR Student Loan come with no interest rates involved.

    Loan Amount Loan Tenure Interest Rate
    Up to RM200,000 Up to 20 years Up to 8 - 9% p.a.

    Eligibility Criteria for a Student Loan

    An applicant of a student loan should fulfil the following eligibility criteria to acquire the loan:

    • Nationality criteria: Malaysian citizen
    • Age criteria: Not more than 45 years old (For most of the student loan schemes)
    • Not sponsored by any educational scholarships (if applicable)
    • Certain loan schemes require a student to have a good academic score

    Documents required to Apply for a Student Loan

    Following set of documents is required at the time to obtaining a student loan:

    • A copy of valid identity card (NRIC)
    • Valid copy of University/College acceptance letter
    • A copy of course fees schedule
    • Latest 3 to 6 months’ salary slips (if applicable)
    • Any other documents and certificates (as requested)
    • Latest Borang B and payment receipt (if applicable)
    • Business registration certificate for a self-employed applicant (if applicable)

    Student Loans offered by banks in Malaysia

    Various banks and financial service institutions offer different educational loan schemes to their applicants. Here are some of the popular student loans in the country:

    • PTPTN:

      It is one of the most popular student loans in Malaysia offered by the National Higher Education Fund Corporation (PTPTN). The student loan scheme under the National Higher Education Fund Act 1997 (Act 566) was established for the students who are willing to pursue higher education. A student/applicant applying for the loan scheme must have an offer letter from the private/public college/institute. As per the household income criterion, the loan is categorised as:

    A: Household income below RM4,000 and BR1M recipient

    B: Household income below RM8,000, but above RM4,000 (75% of maximum amount)

    C: Household income above RM8,000 (50% of maximum amount)

    • OCBC Earn and Learn Education Loan:

      The bank offers a secured study loan for a tenure spanning up to 10 years. An applicant needs to pledge a fixed deposit worth RM50,000 to earn a RM100,000 worth of education/student loan. A candidate can get up to RM500,000 worth of study loan through this scheme. No legal fees are incurred with this study loan scheme which is offered to the individuals between 23 to 60 years of age.

    • Education Financing-i by Bank Rakyat:

      This is a study loan scheme by the Bank Rakyat that comes with a competitive profit rate. Applicants with a minimum monthly income of RM2,000 and between 18 to 60 years of age can apply for this education loan scheme. Financing up to RM1 million is provided for a flexible tenure of up to 20 years. A grace period is also offered to an applicant on his/her study period which can extend up to 4 years.

    • Skim Prihatin Pendidikan 1Malaysia (SPP1M) by Maybank:

      This top-up scheme caters as a supplementary financial aid for students who are qualified to pursue their studies for bachelors’ degree or masters’ degree courses at select universities in the country. The bank offers this financing package for the applicants who are above 18 years of age and less than 35 years old. He/she also needs to be a full time student to qualify for this scheme. The maximum financing amount is RM200,000 and the tenure lasts up to 20.5 years including the study course duration.

    • RHB Bank Study Loan:

      It is a loan scheme offered for full-time or part-time programmes both locally as well as internationally. The applicants’ courses should be approved by the Ministry of Education and Jabatan Perkhidmatan Awam to qualify for this loan. A loan amount of RM500,000 can be granted under this scheme to an eligible applicant.

    • CIMB Bank Study Loan:

      This loan scheme is also offered for local and international courses that are conducted on a full-time or part-time basis. Maximum financing worth RM100,000 can be offered under this scheme for a tenure of 10 years. A joint applicant or co-borrower is required when a candidate is applying for a full-time course. For part-time course students, presenting a guarantor is necessary.

    • UOB Study Loan:

      Financing of worth RM15,000 to RM150,000 is provided to full-time undergraduate and postgraduate students. Financing is provided to the applicants aged between 18 years to 25 years with a co-borrower or guarantor. The loan scheme can provide up to 100% financing for tuition fees. The financing tenure offered can run up to 12 years depending upon the type of the academic programme.

    Student Loan FAQs

    Q. How does an education loan or student loan work in Malaysia?

    A. A student loan can many times fall under a personal loan category. Like any common loan type, once approved, a study loan or a student loan needs to be repaid through regular monthly instalments. The monthly repayment sum consists of the principal amount along with fees and interest. The interest rate is charged as per the loan tenure and credit history of the applicant.

    Q. Do educational personal loans get an exemption from tax?

    A. Yes, as personal loans are not counted as taxable income, you do not have to include it in your annual tax returns.

    Q. Can I get a study loan if I am less than 18 years old?

    A. Certain banks provide students loans for the candidates less than 18 years old with a co-borrower or a guarantor. The guarantor needs to be your close relative such as your guardian, parent, spouse or sibling.

    Q. How quickly can I get a study loan in Malaysia?

    A. Depending upon the bank and the financial institution, a student loan can be approved within 24 hours. Generally, a student loan can get approval within a couple of days if all the necessary documents are in place.

    Q. I am a Malaysian citizen and I want to go to the United States for completing my higher education. Can I obtain a study loan from any local bank?

    A. Yes, many local banks offer education loan for local as well as international courses. Depending upon your eligibility and course type, you can find a suitable study loan for your programme that covers most of your expenses.  

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