There are various types of Personal Loans offered Malaysian banks. Private Sector Personal Loans are one among them that is offered to the private sector employees. Several banks offer such loans with vying interest rates.
Features and Benefits of Private Sector Personal Loan
The features and benefits
- The financing amount starts from a quantum as low as RM2,000 and can go up to RM300,000.
- Banks provide a repayment period of 1 to 10 years. Sometimes the repayment period depends on the loan amount and the gross salary of the individual.
- A few banks do not require a guarantor to approve the loan.
- There is no need of a collateral for loan approval.
- Takaful Coverage can be optional in a few banks. Other banks would require the applicant to buy Takaful plans as a mandatory procedure.
- When Takaful Coverage is bought, the bank deducts the first year’s premium from the loan amount.
- The financing amount mainly depends on the individual’s salary.
- Private Sector Personal Loan can also take the form of an Overdraft Loan where the applicant will have access to standby credit.
- An applicant is supposed to secure the Overdraft with a Fixed Deposit account.
- A Personal Overdraft scheme may provide the applicant with a limit of up to 100% of the deposit amount. For example, if an applicant deposits RM10,000 in the Fixed Deposit account, he/she can access up to RM10,000 as credit from the overdraft.
- In this case, interest is charged only on the amount utilised and the money repaid can be withdrawn again.
The interest rate for Private Sector Personal Loan can be fixed or floating. In addition, the interest rates vary based on the mode of loan transactions. Depending on the banks, the fixed flat interest rate may start from 6.4% p.a. and may go up to 12.5% p.a. The floating interest rates are pegged to individual banks’ base interest rate. MBSB offers a floating interest rate of ECOF-i + 4.10% where ECOF-i stands for Effective Cost of Fund-i.
Fees and Charges
Given below is the general fees and charges that are applicable to obtain a Private Sector Personal Loan:
|Stamp Charges||0.5% of the total financing amount; adhering to the Stamp Duty Act 1949|
|Late Fees||1% p.a. on monthly outstanding due|
|Early Termination Fees||1% to 3% of the loan amount|
The following are a few eligibility criteria one has to fulfil in order to qualify for Private Sector Personal Loan:
- The applicant must be an employee in one of the private sector companies, government-linked companies, multinational companies or education sector companies as listed by each bank.
- The applicant can also be self-employed.
- Minimum age to apply for a Private Sector Personal Loan is 18 years.
- Maximum age of the applicant by the end of loan tenure must be 60 years or less.
- A few banks provide such loans to Malaysian citizens only.
What documents do I need to prepare for Private Sector Personal Loan
Applicants must ensure to provide the following documents to apply for a Private Sector Personal Loan:
- A copy of MyKad/NRIC
- Copies of recent 3 months’ salary slip
- A copy of recent 3 months’ bank statement
- A copy of EPF statement
- A copy of the confirmation letter from the employer
- EA Form
- A copy of MyKad/NRIC
- A copy of recent 6 months’ bank statement
- Form 9, 24, 49 or Business Registration
How to Apply for Private Sector Personal Loan?
An individual can apply for Private Sector Personal Loan by following one of the two procedures given below:
- Offline Application: An individual can visit the bank’s branch and request for the loan application form. The individual will have to submit the duly filled application form with the required documents for approval process to begin.
- Online Application: One can apply for Private Sector Personal Loan by clicking on the ‘Apply Now’ button under the loan page on the official website of the bank. The necessary documents are required to be uploaded on the website based on the bank’s requirements. Representatives from the bank will contact the applicant within 2 to 3 business days to carry the procedure forward.
Personal Loan Calculator
Loan aspirants can find out the monthly instalment through personal loan calculators available on bank websites. Applicants will have to fill required fields of data such as financing amount in RM, profit rate and the loan tenure. Though the profit rates vary with different banks, one can have an estimate of the monthly payable loan instalment. Sometimes, a bank’s website can also list estimated payment schedules and the deductions that can be done over a period of time.
Q. I have joined a private company 2 months ago. Am I eligible for Private Sector Personal Loan?
A. Yes. You are eligible for Private Sector Personal Loan based on the salary you draw. Also, you must provide the Letter of Confirmation from your employer. Banks like Bank Rakyat considers both permanent employees and contract employees.
Q. I am self-employed since 3 years. Can I borrow the Private Sector Personal Loan?
A. A few banks like MBSB consider self-employed citizens eligible for Private Sector Personal Loan. The minimum requirement in such cases is that the individual must have established the business for at least 2 years.
Q. What would be my monthly instalment if I take a loan of RM100,000?
A. Your monthly instalment for a loan amount of RM100,000 varies based on the interest rate applicable and the bank. You can make use of the calculator, if provided on the bank’s official website, to have a fair idea on the monthly instalment amount.
Q. Is it mandatory to opt for Takaful Coverage when I take a Private Sector Personal Loan?
A. Some banks like Bank Rakyat keeps the Takaful Coverage as an option. However, other banks may make it mandatory and specify the vendors from where Takaful Coverage has to be bought. Check your loan terms and conditions to find out if takaful cover is a requirement
Q. What is the minimum financing amount that I can borrow from the bank?
A. Usually, the minimum loan amount that can be borrowed differs from bank to bank and can start as low as RM2,000. Bank Rakyat has a minimum loan amount of RM5,000.
Q. Is there a lock-in period applicable for Private Sector Personal Loan?
A. Yes. Usually, banks have a lock-in period for the loan depending on the loan tenure. The lock-in period can be a minimum of 6 months and range up to half the period of the loan tenure. If you would like to clear the loan within the lock-in period, you will have to pay an Early Termination Fee.