Personal Loan for Low Income Earners in Malaysia

Ever dreamed of achieving financial stability but have a low income? Here’s the good news: a personal loan for low income earners is available.

In this article, we explore personal loans for low income earners in Malaysia, the important considerations before applying for one, eligibility criteria and more.

Read on to discover the possibilities of personal loans for low income individuals, regardless of whether you’re looking to overcome a financial hurdle or seize an opportunity for personal growth.

What is a Personal Loan for Low Income Earners in Malaysia?

Firstly, securing a personal loan can be a lifeboat for those facing financial challenges. And while low income personal loans share similarities with standard personal loans, there are key distinctions to note:

1. Typically are unsecured loans

Unlike traditional personal loans, a personal loan for a low income earner is usually unsecured.

This means borrowers are not required to put up collateral, making them accessible to people who don’t own assets such as properties or cars.

2. Catered to low income earners

Moreover, personal loans for low-income earners often have a specific income threshold as a qualification criterion. In Malaysia, individuals with a monthly income of less than RM5,000 are the target audience.

This threshold is set to ensure that those who genuinely need financial assistance due to limited income are the ones benefiting from these loans.

What to Consider When Applying for a Personal Loan for Low Income

Before embarking on your journey to secure a personal loan for a low income earner, it’s essential to consider several crucial factors:

1. Your Current Financial Situation

Firstly, it’s imperative to take stock of your current financial situation. For example, analyse your monthly income, expenses, and any savings you may have to determine your repayment capacity.

Then, you can create a detailed budget to give you a clearer picture of how much you can realistically afford to repay each month.

Additionally, don’t forget to account for unexpected emergencies or unforeseen expenses that might impact your ability to meet your loan obligations.

2. The Loan Terms

When applying for a personal loan for low income earners in Malaysia, research is your best ally in securing a personal loan with favourable terms.

Firstly, start by comparing interest rates, fees, and conditions offered by various lenders, including traditional banks and online lending platforms.

It’s also important to note that personal loan rates can vary significantly between different financial institutions, with several factors determining the final interest rate for your personal loan.

For example:

• Your loan size: In many cases, borrowers may find that larger loan amounts come with more favourable interest rates.
• Your risk factor: If your profile is deemed high risk, lenders may charge higher interest rates to compensate for the perceived threat.
• Your age: Some financial institutions may have age-related policies that affect the cost of borrowing.

Moreover, it’s essential to approach advertised interest rates with caution. Often, the attractive rates lenders advertise, such as ‘3% per annum’, are part of their marketing campaigns.

As a result, to determine the actual interest rate you’ll receive, it’s essential to take into account the lender’s internal systems.

That’s why requesting personalised quotes from banks and thoroughly reviewing the terms and conditions before making a decision is of utmost importance.

3. The Financial Institution

What’s more, be vigilant about uncovering any hidden fees or charges that may come with the loan and ensure that you are not charged any upfront fees.

Doing so enables you to have a complete understanding of the financial commitment you’re entering into, allowing you to make informed decisions that align with your financial goals.

Furthermore, it’s beneficial to seek out lenders who specialise in catering to low income individuals, as they often provide more tailored and flexible loan options.

4. Your Current Employment Sector

Your current employment sector can also be a critical factor in determining your loan options.

For example, both private employees and government or government-linked company (GLC) employees often have access to personal loans tailored to their needs.

Several banks in the market recognise the stability of these individuals’ income sources and thus offer them personal loans with competitive interest rates.

Plus, what’s notable about these loans is that they typically do not require a guarantor or collateral and even offer incentives such as rebates for early settlement.

5. Your Credit Score Status

Additionally, it’s important to access your credit report and assess your creditworthiness. This is because a higher credit score can open paths to better loan terms, including lower interest rates.

It’s also crucial to review your credit report for any inaccuracies or discrepancies and rectify them promptly before applying for any loans.

6. Your Loan Tenure

When considering a personal loan for low income earners in Malaysia, choosing between a shorter or longer loan tenure is vital in shaping your financial strategy.

A longer loan tenure can be advantageous for low income individuals, as it allows you to keep your monthly instalments at a manageable level, thus sustaining your current standard of living.

However, it does come with a significant drawback – you end up paying a larger total amount in interest over time. This is where the Debt Service Ratio (DSR) becomes crucial.

For instance, you have a monthly income of RM5,000 and your existing financial commitments amount to RM2,500.

If you’re seeking a new loan commitment of RM1,000, your total financial commitment after the new loan approval would be RM3,500.

However, when calculating your DSR (capped at 60% of your income), you’d find that you’ve exceeded the limit, with a DSR of RM3,000 of your RM5,000 income.

In such a scenario, it’s essential to reassess your options. You can:

• Lower the loan amount you’re applying for.
• Explore banks or lenders that offer longer loan tenures to reduce your monthly instalments.
• Seek advice from loan agencies specialising in financial planning.

In conclusion, taking the time to assess your choices is paramount. Selecting a loan tenure that matches your financial objectives is a practical approach that also ensures your financial well-being remains intact.

Read More: Understanding the Loan Disbursement Process in Malaysia

Best Low Income Personal Loans for the Private Sector in Malaysia

Now that you know what to look for, here are some of the popular low income personal loans suitable for employees in the private sector in Malaysia.

1. CIMB Xpress Cash Financing-i

CIMB Xpress Cash Financing-i is a fast and flexible personal loan offered to low income individuals with a minimum monthly income of RM800. What’s more, it allows them to borrow up to eight times their gross monthly income.

• Features
  • Minimum financing amount of RM3,000.
  • Maximum financing amount of up to RM50,000 financing or 8% of gross monthly income (whichever is lower).
  • Flexible tenure of up to 5 years (minimum tenure is 6 months).
  • No guarantor required.
  • Profit rate of 18%-24% p.a. (per annum), depending on financing amount and period.

• Eligibility
  • Malaysian citizen.
  • Salaried employee or self-employed.
  • Individuals aged 21 to 60 years old (maximum 65 years upon maturity of financing tenure).
  • Minimum gross monthly income of RM800.
  • At least 6 months of employment or business establishment.

2. Hong Leong Personal Financing-i

Hong Leong Personal Financing-i is a Shariah-compliant personal loan for low income earners in Malaysia.

• Features
  • Financing amount of RM5,000 up to RM250,000.
  • No early termination fee.
  • 20% cashback on profit.
  • Approval within 48 hours.
  • Low monthly instalments.
  • No guarantor or collateral required.
  • Profit rate of 9% to 12.5% p.a. (per annum).
  • Flexible payment period.

• Eligibility
  • Malaysian citizen.
  • Individuals aged 21 to 60 years old.
  • Minimum income of RM24,000 per annum.

3. RHB Personal Financing

RHB Personal Financing is a personal loan for low income earners in Malaysia with a minimum monthly income of RM1,500, with fast approval and disbursement of 10 minutes.

• Features
  • Financing amount of RM2,000 up to RM150,000.
  • Low monthly instalments.
  • Lock-in period of six months.
  • Early termination fee of RM100 or 1% of the approved loan amount (whichever is higher).
  • No guarantor or collateral required.
  • Flexible tenure of up to seven years.
  • Profit rate of as low as 13.25% p.a. (equivalent to flat rate of 7.19%).
  • Monthly repayment (auto-debit).

• Eligibility
  • Malaysian citizen.
  • Private sector (salaried employee).
  • Individuals aged 21 to 55 years old.
  • Minimum income of RM18,000 per annum.

Read More: Medical Fees Malaysia: How to Prevent & Overcome Serious Medical Debt

Popular Low Income Personal Loans for the Government Sector in Malaysia

Low income personal loans catered to government employees or individuals employed in statutory bodies or government-linked companies (GLCs) also also available. For example:

1. Bank Rakyat Personal Financing-i Public Sector

Bank Rakyat Personal Financing-i Public Sector is a personal loan for low income earners in Malaysia’s public sector employees, which adopts the Tawarruq concept.

• Features
  • Up to RM400,000 financing.
  • Tenure up to 10 years.
  • Takaful coverage is optional.
  • No guarantor required.
  • Profit rate is fixed or floating.

• Eligibility
  • Malaysian citizen.
  • Individuals aged 18 to 60 years old.
  • Minimum gross monthly income of RM1,600.
  • Employed in the public sector, GLC companies and GLC subsidiaries.
  • At least three months of employment.

2. Ambank Islamic Personal Financing-i

Ambank Islamic Personal Financing-i is another Shariah-compliant personal loan for low income Government employees in Malaysia, with repayment starting on the fourth month from loan disbursement.

• Features
  • Up to RM200,000 financing.
  • Tenure up to 10 years.
  • Up to three months deferment for repayments.
  • Takaful coverage is optional.
  • No guarantor or collateral required.
  • Profit rate of 3.35% -8.5% p.a. (per annum).

• Eligibility
  • Malaysian citizen.
  • Individuals aged 18 to 60 years old.
  • Minimum monthly income of RM1,500.
  • Employed in the government sector, GLC companies and selected private sector employees.

3. RHB Personal Financing-i for Civil Sector

RHB Personal Financing-i for Civil Sector is a personal loan offered specifically for government employees that adopts the concept of Commodity Murabahah via Tawarruq arrangement and Wakalah.

• Features
  • A Shariah-compliant personal financing product.
  • Up to RM300,000 financing.
  • Tenure up to 10 years.
  • Flexible financial management with a variable profit rate.
  • No guarantor or collateral required.
  • Profit rate as low as 5.65% p.a. (equivalent to flat rate 2.98% p.a.).
  • Flexible payment period.
  • Monthly payment via salary deduction.

• Eligibility
  • Malaysian citizen.
  • Individuals aged 18 to 58 years old.
  • Minimum monthly income of RM2,000.
  • Employed in the federal government, state government and GLCs.

4. RHB Personal Financing-i for Pensioners

RHB Personal Financing-i for Pensioners is also a low income personal loan exclusively for Government or army pensioners in Malaysia.

• Features
  • Up to RM150,000 financing.
  • Tenure up to 10 years.
  • Flexible financial management with a variable profit rate.
  • No guarantor or collateral required.
  • No early settlement fee.
  • Profit rate as low as 7.05% p.a. (equivalent to flat rate 3.75% p.a.).
  • Flexible payment period.
  • Monthly payment available via auto-debit.

• Eligibility
  • Malaysian citizen.
  • Minimum age of 40 years old.
  • Government or army pensioners.

Read More: Saving for Retirement Malaysia: How Refinancing Your Mortgage Can Help

How Bluebricks Can Help with Personal Loans for Low Income Earners

Depending on your needs and repayment ability, we help you navigate personal loans for low income to make informed and smart financial decisions.

Moreover, by comparing and understanding the eligibility criteria and loan features, we guide individuals in choosing the right personal loan for their various needs without adding more financial burden.

Bluebricks is a reputable company in the financial industry in Malaysia. With over a decade of experience, we remain committed to your financial well-being and strive to foster lasting partnerships with our clients.

Whether you are looking for a personal loan to cover unexpected expenses or consolidate debt, Bluebricks supports you along your financial journey. We offer a variety of loan solutions, such as:

• Personal loan rejected services
• SME loan rejected services
• Mortgage loan rejected services (for buying a new home, refinancing and cashback purposes)
• Collateral loan services

Personal Loan for Low Income Earners Services

Additionally, we aim to empower individuals, including low income earners, to achieve improved financial stability, security and independence.

Bluebricks is equipped with the necessary knowledge, tools and resources you need to steer your financial future no matter your circumstances, 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).

Personal Loan for Low Income – FAQs

What’s more, we have compiled some FAQs to provide you with additional information and tips that may clarify some doubts you may have about personal loans for low income in Malaysia.

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