Are you applying for a personal loan? If yes, do you know what is the maximum personal loan you can get in Malaysia?
Understanding these factors and how they influence your borrowing capacity is crucial if you’re considering taking out a personal loan.
Here, we’ll delve into the key elements determining the maximum personal loan amount you can get in Malaysia and offer insights on how to qualify for a larger loan.
What is the Maximum Personal Loan Amount You Can Get in Malaysia?
The maximum personal loan amount you can obtain in Malaysia is not fixed and can differ among various banks and financial institutions.
These institutions set their own minimum and maximum loan amounts based on their respective loan packages.
Typically, borrowers who meet or exceed the minimum eligibility criteria are more likely to secure higher personal loan amounts.
What are the Factors Influencing the Amount You Can Borrow
When applying for a personal loan, you can’t just hope for the best. There are several key factors at play when determining your maximum loan amount.
By understanding and proactively addressing these factors, you can help you secure a larger personal loan in Malaysia:
1. Bank Selection
Different banks and financial institutions in Malaysia offer personal loans with varying terms and conditions.
Each sets its own minimum and maximum loan amounts based on their specific loan products.
Building a good relationship with your chosen bank can also lead to them offering better rates and higher loan limits as an incentive for customer loyalty.
2. Credit Score and Eligibility
Banks and financial institutions will assess your credit score and credit history to determine your creditworthiness.
Borrowers with a history of minimal debts, consistent income, and a high credit score are more likely to qualify for a higher personal loan amount due to being perceived as low-risk borrowers.
In addition, your credit score will also influence the interest rates you’re offered, with higher scores often resulting in lower rates.
3. Debit Service Ratio (DSR)
The Debt Service Ratio (DSR) is a crucial factor considered by financial institutions and banks when evaluating your loan application.
It helps them gauge your capacity to make monthly loan repayments. DSR is calculated using the formula below:
DSR = (Total monthly commitment) / (Total monthly income) x 100%
Different banks and financial institutions may have varying maximum DSR thresholds.
As a rule of thumb, a lower DSR is more favourable, indicating that you have a greater capacity to manage additional debt.
4. Employment Status
Banks and financial institutions are more likely to approve a higher personal loan amount to borrowers with steady income.
Reliable employment status and a stable source of income make you a more attractive candidate for a larger loan.
Read More: Personal Loan for Freelancer in Malaysia: How to Apply
How to Qualify for a Larger Personal Loan Amount
Securing a larger personal loan amount in Malaysia is a goal for many borrowers, as it can provide the financial flexibility needed to address various needs and goals.
To qualify for a more substantial loan amount, consider the following strategies and factors:
1. Opt for a Longer Loan Term
Choosing a longer loan term can lead to lower monthly repayments, making it more feasible to qualify for a larger loan amount.
However, it’s crucial to keep in mind that a longer loan term also means paying more interest over time.
Carefully weigh the trade-offs between lower monthly payments and the overall cost of borrowing.
2. Refinance Your Mortgage Loan
To qualify for a larger personal loan amount in Malaysia, homeowners can leverage the equity in their homes through refinancing options.
Refinancing a mortgage loan allows individuals to renegotiate the terms of their existing mortgage, potentially securing a better interest rate or extracting a portion of their home’s equity as cash.
This is particularly beneficial for those who own properties that are fully paid off or have been maintained for over a decade, as the equity can serve as substantial collateral.
By tapping into this equity, clients can obtain the desired cash in hand to address other financial obligations, such as consolidating and paying off credit card debt.
3. Settle Existing Debt
Paying off any existing debts can significantly improve your DSR. Banks and financial institutions calculate DSR to assess your capacity to make monthly loan repayments.
A lower DSR indicates a better financial position and increases your eligibility for a larger personal loan amount.
Before applying for a personal loan, consider working on paying off existing debts.
4. Increase Credit Score
In addition to settling existing debt, monitor your credit report to ensure it is accurate and free from errors.
A vital tip to keep in mind is to avoid applying for new loans frequently, as each loan application can have a negative impact on your credit score.
Any mistakes on your credit report, such as missed payments, may negatively impact your credit score and result in bad credit.
Correcting these errors can boost your creditworthiness and improve your eligibility.
5. Increase Income Earned
If you require a larger personal loan amount, consider exploring opportunities to increase your income.
This might involve seeking a higher-paying job, taking on a side hustle, or exploring new income-generating opportunities.
A higher income demonstrates your ability to meet loan repayments and enhances your eligibility for a larger loan.
Read More: A Guide to Personal Loan for Self-Employed in Malaysia
How Bluebricks Can Help You
Whether you have immediate financial needs, want to invest in a business opportunity, or are planning a major purchase, knowing how to qualify for a larger personal loan amount can make a substantial difference.
Bluebricks is your trusted partner in navigating the complexities of personal loans in Malaysia. As a specialised bank loan and debt consolidation agency, we offer services such as:
- Personal loan services
- SME loan rejected services
- Mortgage loan rejected services (for buying a new home, refinancing and cashback purposes)
- Collateral loan services
Tailored Loan Consultancy Services
It’s pertinent to assess your financial situation, needs, and repayment capacity carefully before taking on a larger loan to ensure it aligns with your financial goals and responsibilities.
As such, our experts are here to help you improve your chances of qualifying for a more substantial personal loan amount in Malaysia, which includes:
- 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).
What is the Maximum Personal Loan You Can Get – FAQs
In this dedicated FAQ section, we have compiled frequently asked questions about the maximum personal loan you can get, complete with comprehensive answers.
The maximum personal loan amount you can obtain is influenced by various factors, including your chosen bank, creditworthiness, employment status, and the loan term.
Different banks and financial institutions may have their respective minimum and maximum loan amounts.
Yes, you can improve your eligibility for a larger loan amount by maintaining a good credit score, reducing existing debts or increasing your income.
DSR is a measure banks use to assess your ability to make monthly loan repayments. A lower DSR indicates a better financial position and improves your eligibility for a larger loan.
To boost your credit score, settle existing debts, check your credit report for errors, and make timely payments on your existing obligations. A higher credit score increases your eligibility and leads to better interest rates.
To choose the right bank, you must consider interest rates, loan terms, eligibility criteria, and your specific financial needs.
Bluebricks offers comprehensive loan consultancy services to help you select the most suitable loan product based on your unique circumstances.
