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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.

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

Student Loan Max. Financing Amount Tenure Profit/Interest rate Min. Income
PTPTN RM26,000 6 months after the completion of your graduation 1.00% RM4,000
OCBC Education Loan RM250,000. up to 7 years Starts at 6.14% p.a. RM7,500
Education Financing-i by Bank Rakyat RM1 million up to 20 years 4.85% p.a. to 9.75% p.a. RM2,000
Skim Prihatin Pendidikan 1Malaysia (SPP1M) by Maybank RM200,000 up to 20.5 years Eff. Rate 6.85% -
RHB Bank Study Loan RM500,000 up to 20 years 1.25% + BLR -
CIMB Bank Study Loan RM100,000 10 years Competitive profit rate -
UOB Study Loan RM150,000 up to 12 years 0.75% + BLR -

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

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:

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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