Easy Payment Plans in Malaysia Explained

Ever wanted to buy something expensive but not fork out a huge chunk of cash instantly? An Easy Payment Plans lets you do just do that and can even save you some money in the process!

What is an Easy Payment Payment Plan?

An Easy Payment Plan or EPP allows you to own that fridge you always wanted without having to pay the whopping RM3,000 price tag that comes along with it. Instead, you have the luxury of spreading the cost of that fridge over the next few months or years at either very low or sometimes 0% interest! EPP is usually offered by most banks' credit cards with repayment periods typically ranging between 3 and 36 months. 

This allows you to buy things with a swipe of your credit card and repay the amount by installments - meaning that you will never have to worry about not being able to settle the full amount owed at the end of the month. Paying your bills late could lead to the bank slamming you with high interest charges (normally 15% to 18% p.a.) on your outstanding balance each month!

You could actually think of EPP as a short term, interest-free personal loan - you can also save the money you would have used upfront to spend by putting it into an interest bearing account.

EPP can actually save you money!

Let's take a look at an example:

Darren wants to buy a new gaming laptop for himself which will cost him RM5,000 - a little costly for the average joe but hey, he's a serious gamer! He has several payment options at his disposal:

Cash or Debit Card

If he makes the purchase using cash, he will definitely get the laptop, but a whopping RM5,000 will be deducted from his bank account instantly.

Credit Card

If he makes the purchase by credit card, the result is similar except that he would have to fork out the RM5,000 when he pays his bill at the end of the month.

EPP

Making the purchase by committing to a 0% EPP with a 12-month tenure, will lead to his debt being spread over the 12-month period and Darren will only need to pay RM5,000/12 months = RM416.67 monthly.

So instead of paying RM5,000 in one go, Darren can put the excessive cash into a savings account to earn some interest; He can get up to 2% p.a. in interest, and if he’s being clever he can do staggered multiple tenure FD deposits and earn well over 3% p.a. !

Things to be aware of

Let's take a look at some of the things you should take note of if you’re planning to use a 0% Easy Payment Plan to make a purchase.

Makes sure it really is "0%"

It is actually fairly common for consumers to be charged an extra fee (normally around 3-4%) by the merchant when opting for a 0% Easy Payment Plan. Most will tell you so, however you should make it a point to ask if such a cost exists.

For example, an extra 4% on the RM5,000 laptop would cost you RM300. It is by no means an amount that can simply be "shrugged off" and this in turn defeats the whole purpose of engaging in a 0% interest repayment plan!

Missed or Late Payments

Banks and merchants rarely advertise this about their 0% EPP but if you miss a payment or pay the installment later than the due dates, the bank will cancel the 0%, and charge you with the normal interest similar to the credit cards instead.

You could put yourself in danger of getting into more debt that you can afford. So, before you engage in this easy payment plan, be sure to have a look on the terms and conditions carefully.

Minimum Spending

Most banks have a minimum spending requirement to qualify for their 0% Easy Payment Plan. For example, the Citibank Flexi Payment Plan imposes a minimum spending of RM500 while others like UOB Instalment Payment Plan has a minimum spend of RM1,000 to qualify for an Easy Payment Plan. Be sure to check with the respective banks regarding their minimum spend before swiping for that purchase, or else you may be stuck with a heavy bill to pay at the end of the month should you fall short of the requirement.

Purchase from a participating merchant

Look for stickers or signs on retail outlets indicating that they offer 0% Easy Payment Plans for your credit cards. Alternatively, look up the websites of your banks for the list of participating merchants offering 0% Easy Payment Plans.

Merchant not on the list? Don't fret, other options are available!

For example, Maybank can loan you the cash you need to make your purchase with their Ezy Cash Plan. Similar to an EPP, you are charged 0% Interest for a period of 6-months. However, the drawback is that you have to pay a 3.88% on time cash advance fee at the start.

0 comments

Agree or disagree with this post? Questions? You also have your word!

  • Edward

    HI, is there any penalty if I make early settlement for Public Bank Easy Payment?

    Reply
    • RinggitPlus

      Hi Edward,

      It really depends on the plan you had taken at that point in time. The bank does change these from time to time.

      Generally, there are early settlement fees for Easy Payment Plans, but there are exceptions.

      It would be best to cross check with the bank if there are any fees involved.

      Thank you.

      Reply
    • Faiz

      Can the amount to be lock for EPP exceed the Credit Card limit ? For example card limit is RM4k but the amount to be locked is RM6k. Can or cannot ?

      Reply
      • RinggitPlus

        Hi Faiz,

        Unfortunately, no you can't :(
        In fact, the amount you lock in for your EPP also decreases your credit limit, as we've explained in our answer to Ricky in this same article.

        Reply
      • sailesh

        Hi,I want to ask in order for an individual to qualify for Ezy Cash Plan, do they need to have specific credit card?
        Next question, how come it will be 0% installment plan if at first they charged the consumer with cash advance fee?

        Reply
        • Ringgitplus

          Hi Sailesh, you will need the credit card from the participating bank in question but it doesn't matter which card. As for your second question, the bank views the advance fee as a separate charge from the interest. The 0% is because you will not be charged any interest on your balance for the period promised. In other circumstances you may need to pay not only the cash advance fee but also the interest. Hope that helps.

          Reply
        • Ricky

          Hi, i would like to know, if i apply for EPP for RM2k example of OCBC credit card, what happen to my credit limit? are the bank going to reduce it or the credit limit of my card will remain the same?

          Reply
          • Ringgitplus

            Hi Ricky, good question! The credit limit of your credit card will be affected by the RM2K EPP. For example, if you have RM5,000 credit limit, the EPP will make it RM3,000. This is the case with almost all banks but we encourage you to check with your own bank to be sure.

            Reply
            • Isfar Faris

              Hi,

              Wanna ask, how to apply this EPP? Is it by just asking the bank? And my case is more of missed out payment / late payment, can I still opted for this plan? Hope you can advice.

              Thank you..

              Reply