Key Takeaways
- Personal loan late payment charges are fees imposed by banks when borrowers fail to make timely repayments, adding to the overall cost of borrowing.
- Late payment charges can be of two types: fixed fees and interest-based penalties, and both types involve different methods of calculating late payment charges.
Navigating personal loan late payment charges is essential for borrowers in Malaysia to avoid financial penalties and maintain a healthy credit standing.
Understanding the intricacies of these charges empowers borrowers to manage their finances effectively and prioritise timely repayments.
What are Personal Loan Late Payment Charges?
They are fees levied by banks when borrowers fail to make their loan repayments on time, adding to the overall cost of borrowing.
It’s crucial for borrowers to comprehend the various types of late payment charges so that they can manage their finances and avoid unnecessary penalties.
Conventional vs Islamic Personal Loan Late Payment Charges
1. Conventional Personal Loan Late Payment Charges
In conventional banking systems in Malaysia, late payment charges are imposed when a borrower misses a scheduled payment after the due date.
These charges are typically calculated as a percentage of the outstanding loan amount.
The late payment charge may compound over time if the borrower fails to settle the overdue amount promptly.
2. Islamic Personal Loan Late Payment Charges
Islamic personal loans operate under Shariah principles, which prohibit the charging or earning of interest (riba). As such, Islamic banks do not impose compounding late payment interest charges. Instead, late payment charges for Islamic loans are usually based on the current outstanding balance without additional interest accrual.
Common Personal Loan Late Payment Charges in Malaysia
Here are the common personal loan late payment charges for several major banks and financial institutions in Malaysia:
1. Maybank
- 1% per annum on the amount in arrears calculated from the overdue date till the date of full monthly repayment.
2. Citibank
- Mortgage Loans (Residential & Commercial Properties): 1% p.a. on the amount past due multiplied by (number of days past due/365 days) for term loans or financing on a monthly basis.
- Corporate Loans: 1%
3. Bank Islam
Late payment charges for all loans are based on the Ta’widh (compensation) principle:
- Before Maturity of Facility: 1% per annum on overdue installments until the date of full settlement.
- After Maturity of Facility: Equivalent to the prevailing daily overnight Islamic Interbank Money Market (IIMM) rate on the outstanding balance.
- Post Judgement Debt: Equivalent to the prevailing daily overnight Islamic IIMM rate on basic judgment sum calculated from judgment date until the date of full settlement.
4. AEON Credit Service
Also based on the Ta’widh principle, it is calculated at the rate of 1% per annum on outstanding payments from the overdue date until the date of full payment during the tenure or until judgment date (whichever is earlier).
Read More: What You Need to Know About Personal Loan Terms in Malaysia
Bluebricks’ Loan and Consultancy Services
Being aware of personal loan late payment charges is crucial for borrowers to stay financially responsible and avoid unnecessary costs.
As a trusted bank loan and debt consolidation agency in Malaysia, Bluebricks helps borrowers understand personal loan late payment charges. Our comprehensive financial services include the following:
- Personal loan services
- SME loan services
- Mortgage loan services (for buying a new home, refinancing and cashback purposes)
- Collateral loan services
Moreover, we provide tailored consultancy services by considering factors such as:
- The specific required loan amount.
- How urgent the loan amount is.
- Whether a property has been held by you or your parents for over ten years.
- Your income level.
- Your CTOS score (such as your credit score and credit history).
Why Bluebricks
1. One of the Top 10 Leading Loan Agencies in Malaysia
Our loan agents represent both individuals and businesses, offering technical and financial advice to help secure loan approvals. Even if banks have previously rejected you, we provide access to a broad spectrum of loan options. Our aim is to enhance the success rate of your loan applications and minimise rejections.
2. Over 10 Years of Experience
With over a decade of experience and current banking knowledge, we excel in securing personal, business, mortgage, and collateral loans, navigating challenges like CTOS/CCRIS, and guiding clients confidently towards successful loan approvals.
3. One-Stop Solution
We provide a one-stop loan service, compiling various options from banks and credit institutions for you. Simply submit your income statement, assets, liabilities, employment record, and credit history, and we’ll handle the collateral and documentation to streamline your loan approval process.
4. Full Financing with 100% Bank Loans
We ensure 100% bank loan availability to provide full financial support, making it easier to achieve your goals and build a positive credit history.
5. No Upfront Payment Required
Our no upfront payment policy is designed to ease your financial journey, allowing you to start your investment without initial costs, reducing immediate burden and demonstrating our commitment to your satisfaction and trust.
