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Here are some commonly asked questions
Why apply for a Personal Loan?
A personal loan is a type of loan that is offered by lenders like banks, financial institutions and licensed money lending /or credit community companies.
Personal loans are useful if you require short term assistance or extra funds to support your financial needs like consolidating your debts, home renovation, holidays, education, wedding, medical bills, big ticket purchases (like a new mountain bike), unplanned expenditures or even in an emergency situation. For a lot of people, personal loan comes in very handy at times of need.
An instaDuit personal loan can be used for almost anything and gives you the flexibility according to your convenience and needs.
If you’re having difficulty getting approved by traditional banks, don’t worry. At instaDuit, we have made personal financing easy, fast and friendly when you apply online with us. No more long lines at the bank, no more missing work to make important financial decisions, and no more feeling like you’re missing out on all the good things in life because you can’t get access to credit. With instaDuit, we will help you get back on your feet financially and fast.
How to apply for a Personal Loan Online?
First, you will need to apply for a personal loan from a licensed lender like banks, financial institutions and licensed money lending /or credit community companies.
At instaDuit, you can apply for a loan online or online by visiting www.instaduit.com. Applying for a personal loan with instaDuit is easy. First, start with the instaDuit personal loan calculator to select your loan amount and loan duration. Next, you just need to fill in your details in the application form and upload the required documents. Once all the details have been received, you will be contacted regarding the approval status of your application within 24 hours. That was easy right?
If your application is approved and once you agree with the loan terms and conditions, you will receive the full approved loan amount, which is normally transferred directly to your bank account. From then one, you would need to make your monthly repayments to the lender in regular instalments over a fixed period. The monthly repayment amount includes the principal amount plus fees and interest.
Personal loans typically have shorter repayment periods, anything from 1 month to 10 years. Unlike other type of loans, personal loans have fixed interest rates that do not change throughout the loan duration. As long as you service your loan on time and according to schedule, the loan will be paid off at the end of its term.
The repayment method is also very simple. With instaDuit, you can make your installment repayments through online banking, or by using the JomPAY method on any internet banking websites.
At instaDuit, we offer personal loans from 12 to 48 months with amounts starting from RM1,000 to RM10,000.
How is a Personal Loan different from other loans?
Basically, you have the freedom to use the loan amount to spend on anything you desire. Other loans, for example, home and car loans requires you to specifically purchase a property or a vehicle.
Normally, applying for a personal loan is relatively faster than other types of loans (e.g. home and car loans) that requires a lot of paperwork. Approval duration for a personal loan can range from hours up to days.
What are the different types of personal loans in Malaysia?
You will normally hear of two types of personal loans: unsecured and secured personal loans.
Most personal loans in Malaysia are known as an unsecured loan. An unsecured loan is a loan that does not require any type of collateral. This means that you do not have to pledge any collateral or security when you apply for a service like this. Other exampled of unsecured loans include student loans, credit cards and buy now, pay later (BNPL) services. In general, the interest rates for unsecured loan tend to be higher than those of a secured loan.
A secured loan on the other hand, is a loan backed by a collateral, security or financial asset you own, like a house, car or motorbike —that can be used as a form of payment to the lender if you are unable to pay your loan on time. Additionally, the lender has a legal right to take over the collateral you pledged in the event you are unable to repay your loan as listed in the loan agreement. The most common type of secured loans are home loans (mortgage) and car loans (hire-purchase)
In some instances, some lenders may require a guarantor for borrower. A guarantor is someone who agrees to pay your loan on your behalf if you are unable to make your payments. Normally, guarantor can be the immediate friend or family of the borrower.
At instaDuit, we offer unsecured personal loan services and do not require our borrower’s to appoint a guarantor.
How about the difference between a conventional personal and an Islamic personal financing?
For conventional a personal loan, a lender lends you money and in return, you repay the loan with interest.
Islamic personal financing, on the other hand, follows shariah financing principles that avoids interest-based transactions (riba). it is based on the concept of earning through the sale of commodities where the lender will buy the commodity on the borrower’s behalf, and selling it back to him/her at profit. The repayment is deferred, where the borrower will make the repayments back to the lender based on the commodity’s selling price on a deferred basis through monthly payments.
In place of interest (riba), a profit rate is defined in the financing contract.
Where can I get a Personal Loan?
There are a number of companies that you can get a personal loan from. Typically, there are Banks like Public Bank, CIMB, Maybank, RHB personal loans. Alternatively, for those who prefers not to deal with Banks, there are also KPKT licensed money lenders (or now known as Credit Community) like instaDuit that offers digital personal loan services too. Be sure to do your research before picking the safest and best personal loan.
What is the difference between an instaDuit personal loan vs a Bank’s personal loan?
Making it easier for customers to take out loans online is what makes us different. We make personal financing easy, fast and friendly when you apply for a loan with us. One of our top priorities is to help customers who don’t want to use conventional bank (and unlicensed lenders) while bringing fair and transparent financial services to everyone.
How does a lender decide who to approve or not approve a personal loan?
For an unsecured personal loan, instead of relying on a borrower’s assets as collateral for secured loans, lenders approve unsecured loans based on a borrower’s creditworthiness using your bank statements, salary slips and EPF statements as well as credit reports from Credit Bureau Agencies like CTOS and Experian.
Typically, the approval for a personal loan application depends on the borrower’s financial health and his/her ability to pay, for example your salary, income stability, current financial commitments (e.g. the number of loans you have), employment status and your credit. Some of the factors that the lenders evaluate and affect your loan approval include:
- Your employment status
- The consistency of your salary payments
- The history of your bill and loan payments
- The existing financial commitments that you have (commonly known as Debt Servicing Ratio or DSR)
- The credit utilisation of your credit card(s)
- The recent loan applications that you have applied for
- Any trade refences that has been made against you (example, outstanding loans or bills that you have not settled)
- Any legal action or court cases that has been taken against you
- Your credit score
Based on these criteria, a lender can then decide how much you can borrow, your personal loan terms and interest rate. Depending on the lenders, a borrower’s personal loan may be approved up to five times of his/her monthly salary.
- The minimum salary requirement for a personal loan is determined by the lender and amount that you are looking to borrow. In general, you should have a salary of at least RM2,000 per month before applying for a personal loan.
Do lenders charge up front fees when taking a personal loan?
Some of the common fees and charges of a personal loan are stamp duty fees, processing fees, legal fees, early settlement and late payment charges. The types of fees and amount of fees varies from one lender to another but stamp duty fee (0.5% of the loan amount) is normally mandatory for all lenders.
- You can expect to pay a one time stamp duty fee, in addition to any other bank charges, when you take a personal loan. Additionally, you may have to pay an early settlement fee if you decide to pay off your loan early.
You will not be asked to pay any upfront fees or charges when applying for a personal loan.
Be wary if a lender requests you to pay an upfront fee as this is illegal in Malaysia and is a common practice by scammers to dupe unsuspecting borrowers. Please get in touch with the authorities if you have been asked by anybody to pay such fees.
Do lenders require borrower’s to take up any loan insurance or Takaful plans?
Some lenders may insist on the borrowers taking up a loan insurance or Takaful plan. This is to cover your loan in case an unfortunate incident leads to permanent disablement or death, leaving you unable to pay back your loan. With a cover like this, you won’t have to worry about making loan repayments if a permanent disablement has left you without an income. You’ll also have peace of mind knowing that your assets (e.g. money from your EPF account and other insurances) won’t be used to pay back your loans in case of death. The insurance or Takaful plan is usually deducted from the loan amount.
At instaDuit, we do not require our customers to take up a personal loan insurance or Takaful plan.
What do I have to look out for before signing the loan agreement?
Pay special attention to the following before you sign on the dotted line:
Loan tenure – You may have applied for a 24-month loan, but instead you were offered a loan tenure of 48 months instead. A longer loan period means an extension to the amount of interest to be paid – if you decide to accept the offer.
Loan amount – Depending on your risk level as an applicant in the eyes of the bank, you may not always be granted the full amount of loan you applied for. And if you’re in dire need for funds, you might be forced to seek further financing elsewhere to close the gap.
Monthly repayment – Once you’ve established your loan tenure, loan amount, and interest rate offered, make sure that you are able to make the monthly repayment as scheduled.
Any final advice before I apply for a personal loan?
Personal loans are great for borrows who need cash quickly and do not want to put up any collaterals. But like all debt, personal loans are not to be taken lightly and it can lead to issues if you are unable to control your finances and make your payments on time.
Making timely payments is the first thing you can do; set up payment instructions with your bank, and even calendar reminders if it helps you toe the line
And finally – borrow responsibly by planning your budget and make sure you have the means, always make your payments on time and make your payments in full – and enjoy the benefits and freedom a personal loan can bring.
What is the Best Personal Loan for me?
The instaDuit Personal Loan, of course. For the best online personal loan in Malaysia, just #instaduit it by starting your application here. We guarantee the best personal loan lending experience compared to any other banks or lenders in the market. What are you waiting for? Just #instaduit.
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Can you get a personal loan if you are ‘blacklisted’ or have a low credit score?
If you have had money troubles in the past and it shows on your credit profile – can you still take out a personal loan? The answer is – Maybe.
First off, credit (reports) is neither good nor bad. It all depends on how the lender will interpret the information they see. Many lenders might take factors like late payments, loan defaults or more than three highly utilised credit cards as a sign of poor money management. And this might then lead them to deem you as having ‘bad credit’.
But still, different lenders have different ways of evaluating one’s credit profile. Thus, even if you have been rejected at one lender, it does not mean that all lenders will do the same. You might be approved for a loan albeit at higher rates. So in this sense, bad credit is subjective.
What is a bad credit score?
Your credit score is the one measurable number that stands between you and the lender when you are applying for a loan. The better your score, the better your chances are at getting your loan approved.
In Malaysia, the two most influential sources to get your credit reports are CCRIS and CTOS. CCRIS falls under the purview of Bank Negara Malaysia whereas CTOS is a private CRA (Credit Reporting Agency) under the Credit Reporting Agencies Act 2010. While CCRIS draws information about you from financial institutions, CTOS relies on related information from the likes of JPN (National Registration Department), SSM (Companies Commission of Malaysia), and even from the Insolvency Department.
In laymen terms, banks and lenders can be spooked by the following poor impression you give them such as:
- High DSR (Debt Servicing Ratio) – A DSR effectively calculates how well you can make your repayments based on your net income against monthly financial commitments.; to stay on the safe side, you need to keep a DSR of below 60% to avoid being flagged up
- Missed, late, or defaulted on repayments – Missing out on your credit card statement and hence last month’s payment? Not only will you be charged interest on top of the outstanding amount plus a late fee by the credit card provider, your CCRIS banking history would show you to be behind for a month. By the way, your PTPTN loan status will also be reflected in CCRIS. A loan is a loan – and you still need to pay it back.
- Special Attention Account – If your CCRIS report shows “Special Attention Account”, financial institutions will not be allowed to lend you. This usually means that a bank or financial institution is monitoring the situation closely while in the process of recovering a loan – or even in the midst of taking legal action.
- Numerous credit applications within a time frame – You can come across as desperate – or a high-risk applicant – to banks and lenders if you’ve made multiple applications for loans and even credit cards especially in a short time span.
- Yes, you might have a chance of securing a loan, even with ‘bad credit’. But this depends on if you can convince a lender that you can promptly repay the loan. You might be able to do this by showing a strong income stream, engaging permanent employment with a major corporation and perhaps even producing a form of collateral (e.g. property you own), a co-signer or guarantor. Still, even with a guarantor, you aren’t guaranteed a personal loan; the decision ultimately lies with the lender.
Will taking a personal loan affect my credit score?
A credit score is a 3-digit number that that indicates borrowers’ credit worthiness. Is based on the borrower’s credit history, financial commitments as well as other factors like legal actions and trade references. A good credit score can increase a borrower’s chances of getting a loan approved and is favoured by the lenders. A low credit score, however, may not be be favourable or get rejected.
Strictly speaking, taking out a personal loan will not affect your credit score. However, it is what you do with your monthly repayments that will. If you make prompt payments to your monthly commitments, a personal loan can actually help you improve your credit score. However, if your miss or make irregular repayments, this may actually hurt your credit score.
How do I up my chances for a personal loan?
Here’s what you can do to improve your chances of successfully getting the financing you need:
- Check your Credit Report
For instance, a lender may have reported that you are not making timely payments. When in fact, you had paid up what you owed! Mistakes like these do happen and it’s one of the reasons why you should really take a look at your credit report periodically.
Bear in mind that it’s not just bank borrowings that colour your credit report, your CTOS file also shows if any legal action has been brought against you. This could even include unpaid utility bills where your telco or internet provider files a suit to collect dues owed by you. If you want to dispute a claim made against you, do request a data review with the credit bureau agency.
- Clear all arrears
If you are late with credit card payments, home or car loan instalment – make sure you pay them off immediately.
Remember that your credit score is one major way to indicate your abilities as a good (or not-so-good) paymaster. And it’s hard to get a loan when you are showing that you have trouble covering your dues as it is.
- Wait it out
When you do pay off all your dues and balances, it will take approximately 12 months before it is cleared from your record. So sometimes, your only option is to play the waiting game.
- Build good credit
This option may or may not be doable for everyone due to the time factor. But if time is on your side, working to improve your credit is one of the best things you can do! This is because with good credit comes higher approvals and lower interest rates.
Improving your credit profile involves paying all your bills on time, keeping your credit utilisation under 20% to 30% (the lower the better) on your credit cards, cultivating strong savings and ensuring that none of your accounts are dormant, among others.
- Apply for a smaller loan amount
Although, you may want a large loan, the lender might be more comfortable to loan you a smaller sum. Now if you successfully repay this lighter loan, you’ll be improving your credit profile and your chances, the next time you apply.
- Support your loan application
Even though personal loans are mostly unsecured, when you have poor credit, you may need to present a type of guarantee to the bank to help your application along.
It may not always work but it is certainly worth a try. As mentioned above, a guarantor, consignor or collateral is one way to go, but you can also pledge financial assets too.
- Consider a longer tenure
When your earnings are low, you’ll need to keep your monthly installments low as well. With a longer tenure (and lower interests), you can stretch out repayments to make it more affordable in the long run. However, do note that the longer the tenure, the higher the interest costs overall.
However, if your applications are denied everywhere, it’s time to seriously look into your finances. We don’t mean to scare you, but it could be a red flag that you aren’t managing your money well enough.
Borrowing from an Ah Long or Loan Shark vs a licensed moneylender
“Ah Long”, Loan Sharks and Moneylenders are often mixed up as the same category. Well, “Ah Long” and Loan Sharks are typically used to described unscrupulous lenders who charges unreasonably high interest rates and would threaten their customers if they do not pay up on time.
Licensed moneylenders in Malaysia, or known today as Credit Communities, are not the same as Loan Sharks. They are regulated by Kementerian Perumahan dan Kerajaan Tempatan (KPKT) with strict guidelines bound by the Money Lending Act 1951. According this act, licensed moneylenders can only charge a maximum of 12% interest per year for secured loans and 18% interest a year for unsecured ones. If you come across any moneylenders that charges higher than that, beware!
Beware when taking a loan from the “Ah Longs”
“Ah Long” and Loan Sharks normally operates illegaly and in the shadows. Many resort to threatening their customers like shaming their borrowers publicly and vandalising their properties like splashing paints on their cars or home entrance. It can be a very distressing situation.
Here are some clues that you can look out for to spot and avoid the “Ah Longs” or Loan Sharks:
- Advertisements – Have you ever seen those posters on lamp posts, pillars that says “Easy Loan, Fast Approval, Call this number”? They are likely to be loan sharks. KPKT requires that all licensed money lenders display their lending license number visibly, together with their address, contact details and website information.
- Unsuspecting messages – Many of these loan sharks send unsolicited WhatsApp or SMS messages offering loans. Ignore them.
- They may appear friendly at the beginning but becomes aggressive if you can’t meet your payments
- Extremely high interest rates
- Asks for upfront payments before approving your loan and impose all sorts of hidden fees when you sign up
- May approve your loan without asking you for your financial information like pay slips and bank statements
- Does not offer any loan contract, or contracts that are poorly written with unclear loan terms
- Harasses the borrowers, sometimes with violence and initimdating friends, families and neighbours to pressure the borrowers to pay up
As they often operate illegally, they will do whatever it takes to pressure you into settling your debt. There are many horror stories who fall prey into these loan sharks, do a quick google search and you’ll be able to find many articles on such cases online.
What is a money lender and how can you be sure if they are legit?
Licensed money lenders or credit communities, as they are known today, are regulated by Kementerian Perumahan dan Kerajaan Tempatan (KPKT). They are issued with a money lending license that has to be renewed by the lending company every two years. This license are governed by strict guidelines from the Money Lending Act 1951, which outlines a number of key ‘can dos’ and ‘can’t dos’, these include: –
- The maximum interest rate for secured personal loan is capped at 12% per annum or 1% per month
- The maximum interest rate for unsecured personal loan is capped at 18% per annum or 1.5% per month
- They are not allowed to approve and disburse loans remotely — physical face-to-face verification of borrowers’ identity is required
- They have to assess the borrowers’ financial standing
- They have to go through loan terms in person after approving borrowers’ loan application
- Signing the loan agreement must be done in person at the licensed moneylender’s registered business address
- They are not allowed to use compound interest or increase the interest amount when you don’t pay on time.
- If the borrower misses their payments, they may send you reminders and engage a debt collecting agency or law firm to contact you
You can verify the legitimacy of the moneylender by checking the company’s registration number (SSM) on www.mydata-ssm.com.my and check on the Ministry of Urban Wellbeing, Housing and Local Government (KPKT) website on https://www.kpkt.gov.my/. If the company name is not there, this raises a red flag.
How to differentiate a licensed moneylender from a loan shark
Sometimes, it might be hard to differentiate a licensed moneylender from the loan sharks. And this often gives licensed moneylenders a bad name.
It is actually not that hard to find out if a moneylender is legit or not. Here are a couple of tips: –
A legitimate money lending company will be more than happy to share their details like their KPKT money lending license number, SSM registration number, their office address, website and contact details. On top of this, they would also be transparent to explain to you how the business operates and what the loan terms and conditions are. So don’t be shy to ask more details if you are in doubt.
Loan sharks on the other hand, may fumble if you ask them for such details or may just give you all sorts of excuses to divert your questions elsewhere. Many a time, they will also become impatient and might even start raising their voice. If they do, then you should hang up the phone or stop communicating with them.
Loan sharks or Ah Longs, may also first appear friendly and approves a borrower’s loan quickly. However, the telling signs start when they, start to ask for upfront fees often up in the hundreds of ringgit. When you show hesitance or turn down the offer, they might get verbally abusive and coerce potential customers to sign up for their loan.
If you are in need of some fast cash, you should try and get some help from your friends and families first. If you do not want to deal with a bank and are considering getting taking a personal loan from either loan sharks or licensed moneylenders, it is obvious which one is the wiser choice. Ask them the right questions, do your research and if the moneylender you are dealing with makes you uncomfortable, the possibility of who you are dealing with is likely to be a Loan Shark.
Beware of money lending scammers
There are many scammer syndicates out there that poses as legit money lenders to lure unsuspecting applicants. If you suspect you have been approached by a scammer, please read on for more details.
This is normally how a scammer cheats their victims: –
- They will use a fake website or social media account to advertise their personal loan services. We have identified these fake sites that posed as instaDuit or BB Capital, they are: www.bbcapital.info and https://www.facebook.com/BB-Capital-Sdn-Bhd-108555301573303
- Once the victims have provided their info, they will contact them claiming to be from ‘BB Capital Sdn Bhd’
- They will only communicate with you via Whatsapp and voice notes, they would not answer any voice calls
- Upon ‘approval’, they will ask the victims to pay for insurance coverage which in normally in the hundreds of ringgit
- After that, the victims will be asked to transfer another sum of money to their account as pre-payment to proceed with the loan
- These accounts are normally in the names of individuals instead of a company account. These are known as “mule” accounts that is used to receive and transfer funds acquired illegally on behalf others. If you suspect that these scammers are operating with a mule account, you can check this portal of the Commercial Crime Investigation Department of the Royal Malaysia Police.
- They will intimidate and pressure the victims if they do not transfer the money. For example, they will threaten to blackmail the victims to disclose their information to the authorities although the victims have no wrongdoing.
- Once the money is transferred, the scammers will disappear
There has been many victims who have been duped by such scammers and lost a lot of money.
As a licensed credit community, we do not request for any upfront payments nor request our customers to transfer any money to third party bank accounts. Additionally, instaDuit or BB Capital Sdn Bhd currently only serves customers in KL & Selangor.
If you are still unsure, please contact or whatsapp us at 017 215 9500 or click here for us to assist you.
If you suspect that you have been scammed, we suggest that you head to your nearest police station to make a police report.