What is an interest rate?
Almost every loan — car loan, home loan, business loan and personal loan charges an interest rate (or ‘profit rate’ if it is an Islamic loan).
An interest rate is calculated in the form of a percentage and charged to your principal loan amount.
Interest can be calculated on a fixed rate or floating rate basis.
Some people prefer the former as it will help them budget their monthly expenses, whereas the latter is usually favourable for those earning variable incomes.
Which personal loan in Malaysia has a low-interest rate?
Among the banks in Malaysia, Citibank offers a personal loan with a low interest rate of 5.33% per annum, with a repayment tenure of up to 5 years.
|Bank||Interest/Profit Rate (p.a.)||
||Loan Amount||Loan Tenure (year)|
|Citibank||From 5.33% p.a.||RM4,000||RM5,000 – RM150,000||5 years|
Why do banks charge interest on personal loans?
Money lending is risky because there is no guarantee you can get the money back on time and in full.
Banks will usually charge interest as a “fee” for doing business with you and assuming the risk of default.
A personal loan interest rate can be high or low depending on the risk profile of a borrower.
If you have a poor credit history, you may be charged a higher interest rate than those with a good credit rating because you are considered a high-risk borrower.
What factors drive people to apply for low-interest personal loans?
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 rate is very exciting for borrowers.
A low-interest personal loan gives you room to plan your budget and expenses.
You could be 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.
How to get a low-interest personal loan?
As you know that there are a variety of low-interest personal loans in the market, it is important that you shop around for the benefits and features that you want.
You must also watch out for the product's fine print before agreeing on anything.
Another way to secure low-interest personal loans is by pledging an asset to your loan.
This collateral will be used to cover the remaining loan outstanding in case you are no longer able to meet your repayment.
If you don’t have collateral, you can get a guarantor to co-sign your loan agreement, who will then be responsible for the repayment.
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.
Personal loans with low-interest rates in 2023
Here's a quick browse of the personal loans in Malaysia offering low-interest rates in 2023.
Compare and apply for low-interest rate personal loans online with RinggitPlus!
You can even get loan recommendations with us if you need a head start. Just click on the Apply For Loan button above!
|Bank||Interest / Profit Rate||Minimum Income||Loan Amount||Loan Tenure||Who Can Apply?|
|Bank Islam||4.20% - 5.99% p.a.||RM2,000 / month||RM10,000 - RM300,000||1 - 10 years||Public sector employees|
|HSBC Amanah||4.88% - 10.50% p.a.||RM5,000 / month||RM6,000 - RM250,000||2 - 7 years||All salaried employees|
|Alliance Bank||4.99% - 15.28% p.a.||RM3,000 / month||RM5,000 - RM200,000||1 - 7 years||All salaried employees|
|Citibank||5.33% - 9.80% p.a.||RM4,000 / month||RM5,000 - RM150,000||2 - 5 years||All salaried employees|
|CIMB||6.88% - 14.88% p.a.||RM2,000 / month||RM2,000 - RM100,000||2 - 5 years||All salaried employees|
|Al Rajhi Bank||6.20% - 8.39% p.a.||RM3,500 / month||RM10,000 - RM250,000||
1 - 8 years
||All salaried employees|