Things You Should Know Before Applying For a Personal Loan

When you are short on money, one of the options available is to get a personal loan. Did you know some of the top reasons Malaysians apply for a personal loan are for home renovations, medical expenses, and planning for dream weddings?

It may seem to be the solution to many problems; however, there are many things you should consider before getting a loan.

Are you qualified for a personal loan?

To apply for a loan, make sure that you are eligible for one. Some of the basic requirements include:

  • being a Malaysian citizen or person with a permanent residence status
  • being 21 years old and above
  • having a working bank account
  • having a regular salary or being a self-employed person

Do note that requirements differ from bank to bank. For example, some banks accept applicants that are 18 years old and older, and conditions might be different if you are a government servant.

personal loan rhb

What are the interest rates?

In Malaysia, personal loans usually come with a flat interest rate. Essentially, it is the interest charged on the amount of money you borrowed, and you’ll have to pay for the amount that’s calculated at the beginning of the tenure for each year.

For example, you took out an RM10,000 loan at a flat interest rate of 10% per annum. Every year, the interest charges would be RM1,000 until you settle the entire loan.

How does tenure periods affect monthly installments?

Ten years is the maximum tenure, but banks usually offer two to eight years for a loan term. The longer your tenure period, the lower the monthly repayments and higher the interest rate.

Before applying for a loan, make sure you can afford to pay off the monthly repayments. A more extended tenure period might be more suitable if you can’t fork up enough money in a short amount of time.

Early and late repayment fees

There should be an agreement between you and your lenders on time needed to repay your monthly installments.

If you wish to repay your personal loan earlier than the agreed term, there’s usually a fee charged around two to three percent of the outstanding loan balance at the time of the full repayment.

You may also be charged if you can’t afford to repay your loan in time. The bank can also deduct your credit balance from your account, take legal action against you, or repossess the asset you set as collateral if you applied for a secured loan.


A personal loan might be a tempting choice when you’re short on cash, but be sure to be responsible and consider all the points before applying for a loan.

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