A personal loan is a loan that can be availed without much trouble. It can be approved within 24 hours here in Malaysia. When you are applying for personal loan, you don’t have to specify the purpose; you can take the cash and use it for any of your needs such as debt recovery, car maintenance, college fees, etc.
Personal loans generally come with a flat interest rate. The amount of your loan and eligibility will be determined by your salary. You need to have a general review regarding why you need a loan. You also need to assess the prospective interest rates. You can choose a personal loan over a credit card as it comes with a lower interest.
When you are applying for a personal loan, you need to be aware of the different kinds of personal loans.
Here are a few types of loans:
- Variable loan:
This form of loan has an interest rate that is not constant and changes regularly. This will make your repayment challenging as the loan amount can increase and decrease due to various factors.
- Fixed loan:
In this type of loan, the interest rate remains fixed and hence, you don’t have to be worried about a change in your repayment amounts. This will allow you to plan your finances efficiently.
- Secured loan:
Under this type of loan, you need to give a certain asset as a security in order to get a loan. This is done so that the lender can retain your asset in case you fail to make repayments as per the agreement.
- Unsecured loan:
Under this kind of loan, you don’t have to give a security to obtain a loan and so it is offered at a higher interest rate.
Conventional financing and Islamic financing
You can also see if you want to go for a conventional financing method or an Islamic financing method. In a conventional financing method, loans are given so that the lender can earn money from the interest. In an Islamic financing method, transactions done through interest are non-existent.
Loan application process in Malaysia
In Malaysia, you can apply for a loan from a bank or from a licensed moneylender. Banks offer loans at lower interest rates. The entire loan process from application to repayment will be conducted through legal methods. If you are not eligible to get a loan from a bank, you can approach a licensed moneylender for funds. Licensed moneylenders and pawnbrokers are controlled by the Ministry of Urban Wellbeing, Housing and Local Government.
Loans for employees in government and government-linked companies
There are extraordinary loans created particularly for individuals working with the government or in a government-linked company that come with low rates of interest. The loan repayment happens through salary deductions.
Use an online Personal loan calculator offered by several banks to get details about interest rates and repayment amounts for different personal loan packages. The calculator will show a variety of loan options and you can select the most appropriate one depending on how much you can afford.
Checklist for loan application process
You can also create a checklist before you apply for a loan. You need to first determine the purpose of your loan and your loan amount. Next, you need to assess how much you can repay every month by checking your monthly income and expenditures. Then you should decide if you will make your repayment on a monthly, weekly or fortnightly basis. Lastly, keep all the documents and certificates ready that you need to submit to make your loan approval process smooth.
Make certain you find out about charges such as early settlement fees, penalties, documentation fees, etc. Stay away from loans offered by unlicensed financial lenders as they will most likely be loan scams.
Always remember to take a personal loan only after considering all these significant points and you will be safe!