Personal Loan

6 Personal Loans Facts You Must Know

There are often a lot of questions when it comes to personal loans. In this article, we will cover a few facts that people are curious about for your reference.

1. How much you can borrow depends on the bank.

The quantity of money you can borrow from a bank for personal financing is determined by a variety of factors. Your salary, occupation, living costs will be considered by the bank when compiling their credit report.

Keep in mind that many banks prefer to lend money to those who are already their customers. Before you start applying to all the banks in Malaysia, check the personal loan interest rates. Look into more details about the bank that administers your current account or savings account.

In a nutshell, the bank makes the final choice. Despite the abundance of conditions, the truth is that approval is contingent on how well an applicant is. Even if you make a lot of money, if you have a lot of unpaid debts and bills, you could be deemed a credit risk.

2. There are personal loans for low income people.

Personal loans for low income people are hard to find. It’s important to note that these loans also have high interest rates. For instance, RHB’s Easy Pinjaman Express and CIMB’s Express Cash Financing both have low salary criteria.

Minimum income thresholds exist to ensure that you can afford to live and repay the money you’ve borrowed. Hence, make sure you consider all of your alternatives. It’s difficult to repay after tax and EPF deductions and budget for living expenses if your income is low.

3. You can choose the term duration to pay off a loan.

The maximum term for personal loan repayment has been established at ten years by Bank Negara. If you have a bad credit history, many commercial banks will not allow you to take out a loan for this long. The average length of time is 7-8 years. However, because personal interest rates are often rather high, it is always preferable to pay off your loan as soon as possible.

It’s a good idea to consider the amount of interest you’ll pay over the course of the loan when deciding how much money you want to borrow from the bank. Make sure your decision isn’t only focused on the amount of money you can afford to repay each month.

4. The amount you get might not be the same as the amount you asked.

The loan amount you are approved for depends on the outcome of your credit check. Basically the bank will decide whether you are a high or low risk customer and make a loan offer based on its decision.

It usually depends on a few factors including mortgage payments you have, extra fees such as processing or administrative fees, and risk assessments. If you are a high risk customer, you will be given a lower amount of loan that the amount you asked. Hence, you can accept the results and the loan or try to find other places for the loan.

5. You can pay your debt using a new loan.

Note that you can take out a loan to settle my existing loans or credit card debt.Consolidation personal loans exist and exist to assist you combine your debts into one payment, despite the fact that only a few banks provide them. This allows you to keep a larger amount of your money for everyday expenses while also making repayment easier.

6. You can still try to apply for a loan if you are on the blacklist of CCRIS.

You can always submit an application, whether or not you are approved for a loan is still up to the bank. It is quite unlikely that you’ll get accepted if you have a terrible credit history with CCRIS or any other credit reporting agency. In reality, seeking for a loan at every bank in Malaysia could harm your agency’s credit rating.

If you’re having financial difficulties, the first thing you should do is notify your bank. They would rather work out terms with you so that you can pay off your existing debts than take extreme measures against you. If you’re facing bankruptcy, reach out to AKPK for assistance.

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