Best Low Interest Personal Loans in Malaysia 2026

Interest rate is what you pay to borrow money, calculated as a percentage of your loan amount. Malaysian banks also call this the Annual Percentage Rate (APR). Islamic loans use the term profit rate instead.

Personal loans come with either fixed rates (stays the same throughout) or floating rates (changes with market conditions).

Now that you understand what interest rates are, let's answer the most important question: what's the absolute lowest rate you can get in Malaysia right now?

What is the lowest interest rate for a personal loan in Malaysia?

The lowest interest rate for a personal loan in Malaysia is 3.45% per annum offered by Co-opbank Pertama Lestari Personal Financing-i for private sector employees. GX FlexiCredit also offers the lowest rate at 3.78% per annum for borrowers earning RM1,500 and above. AEON Bank Personal Financing-i comes close at 3.88% per annum for government employees through Biro Angkasa salary deduction.

These are the cheapest personal loans you can get in Malaysia right now. The difference between 3.78% and average bank rates at 8% to 10% saves you thousands of ringgit over your loan tenure.

How do banks determine your personal loan interest rate in Malaysia?

Have you ever wondered why one person get a personal loan at a low interest rate while another is offered a much higher one? The interest rate you receive isn't random. It’s a carefully calculated figure based on several key factors. Understanding these can help you improve your financial profile and secure a better deal on your next loan.

Here’s a breakdown of the primary factors Malaysian banks consider when setting your personal loan interest rate.

Your Credit Score and History

This is arguably the most critical factor. Your credit score, as reported by agencies like CCRIS and CTOS, is a numerical representation of your creditworthiness. It tells lenders how responsibly you have managed past debts.

• A High Credit Score (Good Credit History): Indicates that you have a history of paying your debts on time. This makes you a low-risk borrower, and banks are more willing to offer you a lower interest rate as an incentive.
• A Low Credit Score (Poor Credit History): Suggests a history of late or missed payments, defaults, or high credit card utilization. This makes you a high-risk borrower. To compensate for this risk, banks will charge a higher interest rate, if they approve the loan at all.

Your Income and Debt-Service Ratio (DSR)

Your income proves you have the capacity to repay the loan, and your Debt-Service Ratio (DSR) shows how much of that income is already committed to other debts.

• Stable and Sufficient Income: Banks look for a consistent and verifiable income source that meets their minimum requirements.
• Low DSR: A low DSR means a small portion of your income is used for existing loan repayments. This signals that you have a lot of financial flexibility and can comfortably take on a new loan, making you eligible for a more competitive rate.

The Loan Amount and Tenure

The amount of money you borrow and the length of time you take to repay it also play a role.

• Loan Amount: Some banks offer tiered interest rates. For example, borrowing a larger sum might qualify you for a slightly lower rate compared to a smaller loan, as the bank's administrative costs become a smaller percentage of the total loan amount.
• Loan Tenure: A longer tenure means you have more time to pay back the loan, which increases the bank's risk. Consequently, longer-tenure loans often come with a higher interest rate compared to shorter-tenure ones.

The Bank's Standardised Base Rate (SBR)

In Malaysia, the Standardised Base Rate (SBR) is the benchmark interest rate set by Bank Negara Malaysia (BNM). It is the reference rate for all new retail floating-rate loans.

• How it Works: The interest rate you are offered is determined by the bank adding a "spread" or margin on top of the SBR. For example, if the SBR is 3.00% and the bank's spread is 2.00%, your interest rate will be 5.00%. The "spread" is what allows the bank to adjust the rate based on your individual risk profile.

Current Market Conditions

Broader economic factors can also influence interest rates. BNM's decisions on the Overnight Policy Rate (OPR) and changes in inflation can prompt banks to adjust their SBR and, by extension, their loan interest rates. While you can't control these factors, being aware of them helps you understand why rates might change over time.

By focusing on these five key areas, you can take control of your financial profile and position yourself to secure the lowest possible personal loan interest rate.

Understanding how banks set rates is one thing. Knowing exactly which banks offer the lowest rates is another. Here are the top 5 cheapest personal loans in Malaysia right now

Top 5 lowest interest rate personal loans in Malaysia 2026

Below are the banks that are offering the lowest interest rates right now:

1. Co-opbank Pertama Lestari Personal Financing-i: 3.45% p.a. :This cooperative bank offers the absolute lowest rate but you must be a member first. Membership is open to private sector employees. The rate applies to their Lestari Personal Financing-i product with loan amounts from RM5,000 to RM200,000 over 2 to 10 years.

2. GX FlexiCredit - 3.78% p.a. :GXBank is a digital bank that offers Malaysia's lowest personal loan rate for non-cooperative members. You can borrow RM1,000 to RM150,000 with minimum RM1,500 monthly income. The application is fully online through the GXBank app. Approval takes 1 day and money reaches your account within hours.

3. AEON Bank Personal Financing-i - 3.88% p.a. :AEON Bank offers this special rate for government employees, GLC staff, and civil servants under salary deduction schemes. You need minimum RM2,500 monthly income. Loan amounts range from RM1,000 to RM100,000 over 3 months to 7 years. Private sector employees pay higher rates starting from 7.92%.

4. CIMB Cash Plus Personal Loan - 4.38% p.a. :CIMB offers competitive rates for existing customers, especially those with CIMB salary accounts. You need minimum RM2,000 monthly income. Borrow RM2,000 to RM100,000 over 2 to 5 years. CIMB customers with good banking relationships get better rate offers.

5. Bank Islam Personal Financing-i Non-Package - 4.50% p.a. :Bank Islam offers this rate specifically for public sector employees. You need minimum RM4,000 monthly income. Loan amounts range from RM10,000 to RM300,000 over 1 to 10 years. This Islamic personal financing follows Shariah principles with fixed profit rates.

Why do banks charge personal loans with an interest rate?

When you take out a personal loan, the interest rate is essentially the “fee” that banks charge for lending you money and taking on the risk associated with that loan. Banks are running a business, and lending money always carries some level of risk. There’s no guarantee that borrowers will repay the loan in full, or on time. This uncertainty is why banks need to charge interest—it helps cover potential losses and the costs of providing the loan service.

The exact interest rate you’re charged depends largely on your risk profile as a borrower. For example:

• If your credit history is clean, with consistent payments and a good credit score, the bank sees you as a low-risk borrower. This means you’re more likely to repay the loan on time, so the bank rewards you with a lower interest rate.
• On the other hand, if your credit report shows missed payments, defaults, or other financial “bumps,” the bank considers you a higher-risk borrower. To compensate for this added risk, you may be charged a higher interest rate.

In essence, interest rates help banks balance their risks and ensure they can continue offering loans sustainably. But before you apply for any personal loans, do your research on the actual costs beyond interest rates.

Why should I apply for a personal loans with lowest interest rate?

It’s no surprise that most people look for personal loans with the lowest possible interest rates, after all, who wants to pay more than necessary? The lower the interest rate, the less extra money you pay on top of the loan principal, meaning more of your hard-earned cash stays in your pocket.

Choosing a low-interest personal loan directly improves your financial health by making monthly budgeting more predictable and reducing the stress of managing essential expenses. 

By securing a lower rate, you save a significant amount of money over the total life of the debt, ensuring that less of your hard-earned income goes toward interest payments. This creates immediate financial flexibility, allowing you to redirect those funds into savings, emergency reserves, or other personal priorities. Ultimately, an affordable repayment plan provides the peace of mind necessary to stay focused on your long-term goals without the weight of unnecessary financial anxiety.

Whether you’re consolidating multiple debts into one manageable loan, covering unexpected medical bills, funding a wedding, or paying school fees, a loan with a low interest rate can make a big difference in how comfortably you can handle your finances.

How to get a low interest rate for personal loans 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.

Lowest Interest Rate Personal Loan in Malaysia (Bank Comparison 2026)

Here's a quick personal loans comparison in Malaysia offering low interest rates.

Frequently Asked Questions (FAQ) About Low Interest Personal Loans in Malaysia

What's the lowest personal loan rate in Malaysia right now?

The lowest personal loan rates in Malaysia start from 3.78% p.a. from GX Bank's FlexiCredit and 3.88% p.a. from AEON Bank Personal Financing-i. For your information, the rate you actually get depends on your credit score, income, and existing debts but most borrowers receive rates between 5% to 10% p.a.

Can I get a low interest personal loan with bad credit?

Getting a low interest personal loan with bad credit is difficult since banks reserve their best rates for borrowers with clean credit histories. If your CCRIS or CTOS shows missed payments, you'll face higher rates of 12% to 16% p.a. or outright rejection.

You can improve your chances by applying with banks where you're already a customer, offering collateral like fixed deposits, or getting a guarantor with good credit. Better yet, spend 6-12 months improving your credit score by paying debts on time and reducing credit card balances before applying for a personal loan.

How much can I save by choosing a 5% personal loan rate instead of 8%?

On a RM30,000 personal loan over 5 years, you save RM2,520 by choosing 5% instead of 8%. On a RM50,000 loan, you save RM4,200. The longer your tenure, the bigger your savings.

Do low interest personal loans have hidden fees?

Most personal loans include processing fees (0.5% to 2%), stamp duty (0.5%), early settlement penalties (3% to 5%), and late payment charges. Always compare the Annual Percentage Rate across banks since a 5% loan with high fees might cost more than a 6% loan with low fees.

Can I negotiate personal loan interest rates with banks?

You can negotiate if you have strong bargaining power like high income, good credit scores, or are borrowing above RM100,000. Show competing bank quotations and talk directly to the bank manager for better leverage.

What happens if I miss a personal loan payment?

Missing a payment costs RM50 to RM100 in late fees. After 30 days, your bank reports it to CCRIS and this could be damaging your credit score. After 6 months of non-payment, banks can take legal action and the default stays on your credit report for 7 years.

Can foreigners get low interest personal loans in Malaysia?

Foreigners can apply but face stricter requirements like an Employment Pass, PR status, or MM2H visa, plus minimum income of RM5,000 to RM8,000. Expect to pay 1% to 3% higher rates than Malaysian citizens.

Is it better to get a personal loan or use credit card balance transfer?

Personal loans give you actual cash with fixed monthly payments and rates from 3.78% to 6% p.a., while balance transfers only pay off existing card debt with 0% promotions for 6 to 12 months. Use balance transfers if you can clear debt quickly during the promo period; otherwise, get a personal loan for predictable payments and larger amounts.

RinggitPlus Personal Loans: Compare & Apply for the Best Low Interest Rates

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!