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How to Compare Personal Loans in Malaysia: What to Consider

Are you wondering how to compare personal loans in Malaysia and what crucial factors to consider in your decision-making process? Don’t worry, you’re not alone.

It’s not just about finding a loan; it’s about finding the right one for your unique needs and circumstances.

Whether you’re consolidating debt or need a safety net for emergencies, understanding how to compare personal loans will empower you to make a decision that aligns with your financial goals.

Continue reading to learn more!

What are the Benefits of Knowing How to Compare Personal Loans in Malaysia?

In Malaysia’s dynamic financial landscape, knowing how to compare personal loans is crucial. It can offer several significant advantages, such as:

1. Stay Updated on Current Loan Rates

Other than using online loan comparison platforms, you can request a loan proposal from banks or financial institutions in Malaysia.

Doing so can give you an understanding of the estimated loan amount, interest rate, and loan tenure before signing any application forms.

However, you will have to provide a complete set of your income documentation and will only receive the loan details after one to three days.

What’s more, it is essential you understand that there is no obligation to sign the bank’s application form immediately.

You can acquire all the necessary information about the loan proposal without any commitment.

Once you’ve evaluated offers from various banks, it’s advisable to apply to only one bank at a time and await their response.

This approach prevents multiple hits to your credit score and keeps the process straightforward.

2. Offered a Better Deal

Another benefit of knowing how to compare personal loans in Malaysia is the potential to be offered a better deal.

Banks and financial institutions are aware that their customers are not just passively accepting offers but are actively looking around. This makes them inclined to offer more attractive propositions, including:

  • Lower interest rates.
  • Reduced fees.
  • More flexible repayment terms.

Moreover, by staying informed about the various loan offerings in the market, you put yourself in a better position to negotiate for better rates and terms.

3. Explore Various Loan Options

Banks and financial institutions in Malaysia often offer a diverse range of personal loan products, each tailored to meet various consumer needs and financial situations.

This diversity means that every loan offer comes with its own set of characteristics; some may have flexible repayment plans or the option to make lump-sum payments without penalties.

Others might offer lower processing fees or attractive introductory rates that can lead to significant savings.

By taking the time to compare these options, borrowers are able to align their choices with their financial goals.

Read More: Home Equity Loan vs Personal Loan Malaysia: Which is Better? 

What to Consider When Comparing Personal Loans in Malaysia

1. Interest Rates

Personal loans in Malaysia generally have flat interest rates, which means the interest rate remains the same throughout the loan period, regardless of the remaining balance.

This implies that the effective interest rate you pay is higher than the advertised percentage as you pay interest on the original loan amount rather than the reduced balance.

2. Loan Amount

Before applying, it’s important to have a clear understanding of how much you need to borrow to avoid taking a larger loan than necessary, as it may cause financial strain.

Plus, banks and financial institutions in Malaysia have varying minimum and maximum loan amounts.

As a result, you should ensure that the bank or financial institution you are borrowing from can provide a loan amount that aligns with your needs.

3. Loan Tenure

Your loan tenure is closely tied to your repayment strategy.

For example, opting for a longer tenure might seem attractive due to the lower monthly instalments, but this also means you’ll likely pay more interest over time.

Conversely, shorter loan tenures will demand higher monthly payments, but you’ll save on the interest costs in the long run.

The key is to ensure that whichever tenure you choose, the monthly repayment should fit comfortably within your budget without compromising your financial stability.

4. Fees and Charges

The fees associated with a personal loan should also not be overlooked.

Banks may impose a variety of additional charges, including fees for early repayment. These can significantly affect the total cost of the loan.

Therefore, it’s crucial to thoroughly understand all associated fees and consider them when comparing different loan options.

5. Approval Requirements

Lastly, approval requirements are a crucial component. For instance, banks often set age restrictions, with a specified minimum and maximum age for applicants.

Nationality can also play a role; some banks design their loan products specifically for Malaysian citizens, while others cater to both Malaysians and expatriates.

Additionally, employment status—from salaried individuals to self-employed professionals—can also influence the approval process.

Read More: Applying for Personal Loan Without Payslip: What to Know

How to Compare Personal Loans in Malaysia

When you’re in the market for a personal loan in Malaysia, it’s vital to make a careful and informed comparison among the various options available to you.

To do this effectively, here are a series of steps you can follow:

1. Gather Multiple Quotes

When comparing personal loans in Malaysia, it’s essential to first gather multiple quotes from various banks and financial institutions, as they each have their own criteria for lending.

By collecting a range of offers, you can obtain a more complete picture of what the market has to offer and determine which options you’re eligible for.

To do this effectively, you can either research online or visit banks and other financial institutions in person.

2. Avoid Hard Credit Checks

While you’re shopping around for the right loan, ensure that lenders do not perform ‘hard credit checks’ until you’re sure about your choice.

Hard credit checks are carried out to assess your creditworthiness, but they can negatively impact your credit score as well.

Instead, ask for quotes or pre-approvals based on ‘soft inquiries’, which give lenders a look at your creditworthiness without doing any damage.

3. Consistency in Terms

When you’re comparing loan offers, it’s vital that you’re looking at loans that are alike in their terms.

Specify the details you’re interested in — like a 3-year loan or a fixed interest rate — and ensure that each quote you receive matches those terms.

This direct comparison will prevent any confusion and help you make a clear-cut decision.

4. Evaluate Overall Costs

Don’t just look at the monthly payment or the interest rate; calculate the total cost of the loan, including all fees over the entire term.

Examples include origination fees, processing fees, and any other costs that could make a loan with a lower interest rate more expensive in the long run.

Additionally, consider the total interest you’ll pay, which can be affected by your payment timeline as well as by how often your interest compounds.

5. Check the Details

Lastly, always read the loan agreement or contract thoroughly. Look out for clauses about late payment fees, prepayment penalties, and adjustments to interest rates or loan terms under certain conditions.

If at any point you encounter terms or jargon that is unclear, it’s best to approach your bank or financial institution for clarification or consult with a financial advisor.

By following these steps, you will be well on your way to finding a personal loan in Malaysia that suits your financial circumstances and saves you from potential pitfalls.

Read More: Term Loan vs Flexi Loan Malaysia: Know the Difference

How Bluebricks Can Help You Understand How to Compare Personal Loans

With a variety of personal loan options available in Malaysia, how do you determine which one is the best fit for your financial situation? This is where Bluebricks can help.

As a trusted bank loan and debt consolidation agency, we offer numerous solutions designed to facilitate your financial aspirations. They include:

Trusted Personal Loan Consultancy Services

Understanding that the one-size-fits-all approach is ineffective in the nuanced domain of personal finance, we also pride ourselves on our bespoke loan consultancy service.

Our financial experts consider various crucial factors to find the right loan for you, such as:

  • The specific loan amount you require.
  • The urgency with which the loan amount is needed.
  • Whether you or your parents own a property that has been held for over ten years.
  • Your income level.
  • Your CTOS score (such as your credit score and credit history).

How to Compare Personal Loans – FAQs

In this comprehensive FAQ guide, we help you better understand how to compare personal loans, clarify common doubts, and provide expert tips to help you make an informed decision.

How to compare personal loans in Malaysia to know which is better for me?

To find the most suitable personal loan, it’s crucial to evaluate not just the interest rate but the Annual Percentage Rate (APR) as well.

While interest rates are a significant factor, the APR provides a more comprehensive picture as it includes additional costs associated with the loan.

How to compare secured and unsecured personal loan interest rates in Malaysia?

When comparing interest rates for secured and unsecured personal loans in Malaysia, it is advisable to use a personal loan calculator.

By inputting the loan amount, loan term, and interest rate for various loan types, you can calculate the monthly repayments and the total amount payable over the life of the loan.

Is it possible to ask my bank to reduce the interest rate on my personal loan?

Yes, it’s possible to ask your bank for a reduced interest rate on your personal loan.

However, you should first reduce your overall debt burden by organising your debts by interest rate and prioritise settling the ones with the highest rates.

Demonstrating this financial discipline can give you leverage in discussions for lower rates.

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Picture of Wilson Wai Kit

Wilson Wai Kit

Senior Consultant

With extensive banking experience, notably as a mortgage sales officer at UOB Bank, Wilson leverages his understanding of loan applications and approvals to offer financial insights and support to empower individuals to make informed decisions regarding their financial futures.

Feel free to contact him for assistance with your financial needs!

I want to know about bank loans
Picture of Wilson Wai Kit

Wilson Wai Kit

Senior Consultant

With extensive banking experience, notably as a mortgage sales officer at UOB Bank, Wilson leverages his understanding of loan applications and approvals to offer financial insights and support to empower individuals to make informed decisions regarding their financial futures.

Feel free to contact him for assistance with your financial needs!

I want to know about bank loans



About Bluebricks

BlueBricks Holding is one of the top ten leading loan agency companies in Malaysia in terms of loan approval rates. As a leading loan agency company, we have extensive knowledge and experience in mortgage, personal loans, and business loans, and this enables us to help our customers to get the deal that is best suitable to them.

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