Top 5 things you need to know about personal loans

Thinking of applying for a personal loan? Here are the most important questions to ask before doing so.

Personal loans are a good way to get cash on the double for whatever you may need it for. But for many, the need may come at a time where they are simply too hard-pressed to pay much attention to terms and conditions.

The good thing about personal loan products is that they seldom differ. For almost every personal loan; there are only five salient questions you need ask yourself and the bank in question to get the information you need to make a decision.

#1: Is a personal loan necessary?

Personal loans can come with quite a few fees, charges and some high interest rates. Consider if there is no other option besides a personal loan at present. If it is not an emergency; consider saving up over a period of time or if that isn’t an option; refinancing property could provide additional cash at a lower interest rate (but you will still be charged legal fees for a new loan agreement!).

Credit cards may have a higher interest rate but there is the added flexibility of repaying everything within a shorter period without a penalty fee.

Before even considering the technicalities of a personal loan, ask yourself if you’ve truly exhausted every other way to obtain the money.

#2: Do I need security/particular relationship with the bank to qualify?

For some personal loan products; loans are only given to those with a fixed deposit, investment fund, unit trust or some other account (such as a savings or credit card) with the bank in question. Sometimes it isn’t so much a pre-requisite for approval but a way to get a loan with a lower interest rate.There are also loans specially for civil servants or government-linked company workers. Find the best loan for you.

#3: How much interest will I be paying?

For most people, loan tenures are unlikely to be just a year and thus, it will be important to consider how much interest you will be paying for the whole duration of the loan.

New Bank Negara guidelines have reduced tenures of personal loan financing to 10 years. However, most loans to non-government sector employees are not affected as tenures are usually capped at 7-8 years. Even at this number; the level of interest paid for a 6 year loan can be extremely high.

Typically, a loan amount of RM10,000 with a 9% p.a. interest rate will cost you the following amount in interest depending on 2, 4 or 6 tenure.


Loan amount

24 months
48 months
72 months
Principal repayment

Interest payment

Monthly repayment amount

Total interest paid
  RM1800 RM3600 RM5400

For each year, the interest rate will be calculated based on the opening amount and not the remaining balance for most personal loans[1]. As such, you will be charged the same amount of interest every year no matter how much of the principal you’ve repaid. As illustrated above; a six year tenure for an RM10,000 loan is charged interest up to more than half the borrowed amount. However, the repayment monthly only differs by a small amount. Paying off your loan in two years saves you RM3600[2]. Stretching out your loan for a longer tenure can make the monthly payments more affordable but total cost of the loan goes up significantly.

Here’s a graphical look at the reduction of monthly repayment versus the increased interest rate:

#4: How much can I afford to repay every month?

Looking at the interest charged above; if you can afford to repay your loan quickly, it would be advisable to do so. Consider all commitments. However, if the minimum is all you can afford to repay; it will be inevitable to choose the longer repayment schedule: paying more interest but with a lower risk of defaulting.

#5: What other fees and charges will I incur?

Many are shocked to find that the disbursed loan amount is lower than what they had applied for after deducting the banks ‘fees and charges’. If you were to apply for a loan at exactly the amount you require; the shortfall may cause some inconvenience. There may also be penalties for early settlement or late payment. Some banks even require that you take out Takaful insurance on the loan and this will cost you in insurance premiums. Always check the bank terms for one or more of these most common fees and charges:

1.  Processing fee

2.  Stamp duty

3.  Early termination fee

4.  Late payment penalty fee

5.  Insurance fees

Personal loans can become an even bigger burden than any other loan product because of late payment fees and high interest rates. Always consider these four vital points before signing on the dotted line.

[1] Very few personal loans work on a reducing balance method. Do check with the bank of choice which method they would employ to calculate your interest.

[2] Based on a comparison with a six year loan.


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

  • christina Sumai

    hi may I know email address to email my app form and documents.

    • RinggitPlus

      Hi Christina,

      If you would like to apply for a personal loan head on down to the link below.

      Check out the many offers we have and click "Apply Now". Fill in your details and we will get in touch with you soon.


    • yani

      saya nk buat pinjaman express.. tap gaji kasar sye 1390. bole ke sye buat pnjaman dekat easy rhb ?

      • RinggitPlus

        Hi Yani,

        Gaji minima untuk Easy by RHB mesti RM18,000 setahun (RM1,500 sebulan).

        Terima kasih.

      • jeeva

        hi im jeeva i have personal loan 10000 from alliance but ineed extra loan i f can

        • RinggitPlus

          Hi Jeeva,

          If you're eligible and you get approval, why not? We recommend trying for a bank other than the same bank you already have a loan with to spread out the risk in case you default.
          Borrow responsibly!

        • chung ket leong

          Yes, if i need. How to apply it..

        • Kaamatchii a/p Mark Jacob



          Im interested to apply personal loan

          Please advice me tq.

        • mohd syahar

          Untuk tambah modal

          • dean

            what about under AKPK?
            still can apply?

            • Ringgitplus

              Hi Dean, approval will be up to the bank. Usually, AKPK cases are unlikely to be approved until their debt under AKPK is settled.

              If you'd like to try, you can apply here:

            • indradevi

              I want improve my bussiness.please. Help me.

              • suryanie bte muhidin

                I want to create a revolving loan for my business

                • nizam

                  How can i apply it. Im low salary
                  Email or call me

                • Gayatry

                  Hai i would like to apply for personal loan for my housing renovation.
                  Kindly pls advice me on it .

                • Shirley

                  sorry for disturb ,
                  i'm interest for apply personal loan .
                  im low salary , i need it urgently
                  Kindly let me know the detail .

                • Seew

                  I need for new business!

                • mieza

                  hai i very interested for apply personal loan because i want settle CTOS. Please help me i'm work with shipping company in sector swasta.
                  i hope have somebody cant help me for apply personal loan.

                  • Ringgitplus

                    Hi Mieza, it will be hard for people with CTOS bad history to apply for personal loan. Sorry. If you'd like to try anyway, you can find the available loans here:

                  • Vikram

                    I am a foreigner, So which banks offers personnel loan for me

                    • lilian

                      HOW TO APPLY ...PLS

                      • Aliff

                        Hi RinggitPlus, let say we comply with all of the requirements for personal loans, usually how long would it takes to wait for bank's approval?

                        • RinggitPlus

                          Hi Alif, varies from bank to bank. Fast approval personal loans, such as Easy by RHB, can be approved within ten minutes if you walk into the branch. Note that you might pay a higher interest rate for some loans that offer that kind of express service. On the whole you should expect a bank to take up to two weeks to process a loan application.

                        • byebyebye

                          how can define pre-approved personal loan from bank? they told me i got the loan and waiting my document to complete the the the amount they told me is guarantee amount i can get? please adviced

                          • RinggitPlus

                            Hi, you will need to check with the bank in question what this means as it can be different for each bank depending also if you have other loans/credit cards/accounts with that bank. Usually, if you have not submitted your income documents, there is no guarantee you will get the amount you have asked. The bank will consider your application, all your other loans and then decide if they will approve your loan and if so - for how much.

                          • Rajan

                            Hi, Im working one of the private company seance 1 year plus with no deduction of EPF.. and my previous company was deduct.. now im having some pending payment from some banks. almost bad record. i would like to apply 100k.. is it plan want to clear my CTOS and make in one payment... kindly advice