What Is An Interest Rate?
An interest rate is calculated in percentage and charged to your main amount you borrow, known as the principal loan amount. Think of it as the small charge you pay for the convenience of borrowing money from the bank. You'll find that almost every type of loan – whether it's for a car, a home, or a personal loan – includes an interest rate. If it's an Islamic loan, this charge is often called a 'profit rate' instead.
These interest rates are sometimes also referred to as the Annual Percentage Rate (APR). They typically come in two main types: fixed rate or floating rate. A fixed-rate loan means your interest payment stays the same throughout your entire loan period, which can be wonderful for budgeting your monthly expenses. On the other hand, a floating-rate can change with the market, offering flexibility and sometimes benefiting those whose incomes might vary.
Which bank offer the best personal loan with a lowest interest rate in Malaysia?
Alliance Bank offers a low-interest loan starting from 4.99% p.a. with up to RM200,000 financing over loan tenures of up to 7 years.
| Bank | Interest/Profit Rate (p.a.) |
Minimum Income
|
Loan Amount | Loan Tenure |
|---|---|---|---|---|
| RinggitPlus.com | ||||
| Alliance Bank | From 4.99% p.a. | RM3,000 | RM5,000 – RM200,000 | 1 - 7 years |
Why do banks charge personal loan with interest rate?
The interest serves as a “fee” for doing business with you and assuming the risk of default. When a bank lends money, there's always a chance that the funds might not be repaid fully or on time, and that makes it a risky business for them. A personal loan interest rate can be high or low depending on the risk profile of a borrower. If your credit history shows a few bumps, you might be seen as a higher-risk borrower, and therefore charged a slightly higher interest rate to cover that increased risk. On the other hand, borrowers with a strong, consistent credit rating are often seen as less risky, which can lead to more favorable, lower interest rates.
Why should I apply for a personal loan with lowest interest rate?
Most people will go after personal loans with low-interest rates because it is manageable. In truth, nobody likes to pay interest. So anything close to zero interest is exciting for borrowers. Ultimately, a lower interest rate means more of your hard-earned money stays right in your pocket.
Choosing a low-interest personal loan making it much easier to plan your budget and manage other monthly expenses effectively. This can be a real game-changer for various needs, whether you're looking into consolidating all debts with a low-interest loan, financing funeral expenses, footing large medical bills, or paying for wedding expenses or school fees. A lower interest rate truly offers greater financial flexibility and valuable peace of mind.
How to get a low interest personal loan in Malaysia?
As you know, there are a variety of low-interest loans in the market. You must "shop around" diligently and compare various options! Don't just grab the first offer; truly check out all the benefits and features each loan provides. Remember to always dive into the terms and conditions before you agree to anything.
Consider Secured Options With Collateral or a Guarantor
Another smart strategy to potentially secure loans with even lower interest rates is by offering some form of security to the bank. You might be able to pledge an asset, like a fixed deposit or property, which is known as collateral; this acts as a valuable backup for the bank if, for any reason, you're unable to meet your repayments. If you don't have collateral, getting a trusted guarantor to co-sign your loan agreement is another excellent option, meaning they'll step in to be responsible for repayment if you can't.
Boost Your Credit Score for Better Rates
Unfortunately, personal loans with low interest will not be given to borrowers with poor credit ratings. Therefore, take your time to improve your credit score by building a solid financial standing. A strong credit score truly opens more doors, leading to better loan opportunities and more favorable terms in the long run.
Which bank offers low interest rate on personal loans in 2025?
Here's a quick loan comparison in Malaysia offering low interest rates.
| Bank | Interest/Profit Rate | Minimum Monthly Income | Loan Amount | Loan Period | Who Can Apply? |
| Bank Islam | 4.50% - 7.50% p.a. | RM4,000 | RM10,000 - RM300,000 | 1 - 10 years | Public sector employees |
| HSBC Amanah | 4.88% - 10.50% p.a. | RM3,000 | RM6,000 - RM250,000 | 2 - 7 years | All salaried employees |
|
Alliance Bank |
4.99% - 16.68% p.a. | RM3,000 | RM5,000 - RM200,000 | 1 - 7 years | All salaried employees |
| CIMB | 4.38% - 19.88% p.a. | RM2,000 | RM2,000 - RM100,000 | 2 - 5 years | All salaried employees |
| Al Rajhi Bank | 5.27% - 14.83% p.a. | RM3,000 | RM10,000 - RM250,000 |
1 - 8 years
|
All salaried employees |
| Bank Muamalat | 6.99% - 10.99% p.a. | RM2,000 | RM10,000 - RM250,000 | 2 - 7 years | All salaried employees |
| AEON Bank | 6.88% p.a. (flat) | RM2,500 | RM1,000 - RM50,000 | 3 months - 4 years | All salaried employees |
How to apply for low interest personal loan with RinggitPlus?
Compare personal loan rates and find one that suits your preference and financial background. Afterwards, you can apply online for low-interest rate loans via our RinggitPlus WhatsApp chatbot.
You can even get loan recommendations with us if you need a head start. Just click on the Apply For Loan button above!
