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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 comes in handy if you require short term assistance or additional funds to support your financial needs like consolidating your debts, funding your home renovation prohject, going on holidays, education fees, wedding expenses, 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 provides you the flexibility of using the money for your 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.
Understanding Personal Loans
Before taking out a personal loan, it is important to understand the terms and conditions, including the interest rate, repayment period, and fees associated with the loan. The repayment period for a personal loan can range from a few months to several years, and the borrower is required to make regular payments until the loan is fully repaid.
When shopping for a personal loan, it is important to compare the interest rates, repayment terms, and fees offered by different lenders. You can use an online loan comparison tool to easily compare offers from multiple lenders, or you can reach out to several lenders directly to request quotes.It is also important to consider your own creditworthiness when applying for a personal loan. A higher credit score will typically result in a better likelihood to get your loan approved.
Once you have taken out a personal loan, it is important to make timely and consistent payments to avoid damaging your credit score. You can set up automatic payments from your bank account to ensure that your payments are made on time, or you can schedule reminders to make manual payments.
It is also a good idea to create a budget and stick to it, to help you manage your expenses and stay on track with your loan repayment. If you are having trouble making your loan payments, reach out to your lender as soon as possible to discuss potential solutions, such as a loan modification or deferment.
In short, a personal loan can be a useful tool for managing debt or financing a large expense, but it is important to understand the terms and conditions of the loan before applying. By shopping around and comparing offers from multiple lenders, and taking steps to manage your expenses and make timely payments, you can ensure that you find the best personal loan option for your needs.
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?
Upon your application being approved and once you agree with the loan terms and conditions, the approved loan amount will be banked directly into your bank account. From then on, you would need to start making your monthly loan repayments according to the loan schedule over the loan duration or loan period. The monthly repayment amount includes the principal amount plus fees and interest.
Personal loans typically have shorter repayment periods, anything from 1 month all the way up 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.
Credit Card Cash Advance vs Personal Loans, which is better?
There are several reasons why taking a cash advance from a credit card is generally not recommended compared to getting a personal loan:
- Fees: In addition to the high interest rates, credit card companies also typically charge fees for cash advances, such as an upfront fee or a percentage of the amount you withdraw. These fees can add up quickly and make the cash advance even more expensive.
- No Grace Period: Unlike regular credit card purchases, cash advances typically do not come with a grace period, which means that interest starts accruing from the moment you withdraw the money. This can make it even more difficult to pay off the balance and can lead to more debt.
- Lower Credit Limits: Credit card companies often set lower limits for cash advances compared to regular credit card purchases. This means that you may not be able to withdraw as much money as you need, which could be a problem if you are facing a financial emergency.
It is important for consumers to understand the terms of the agreement, including interest rates and one-time fees, before proceeding with these transactions. Your high-interest cash advance loan could stick around for a very long time if you do not manage it appropriately.
On the other hand, personal loans like instaDuit typically come with fixed payments, and longer repayment periods, which can make them a better option for borrowing money. While personal loans may require a credit check and may take longer to obtain than a cash advance, they can ultimately save you money and help you avoid falling into a cycle of debt.
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 type of borrowing that does not require any type of collateral. You do not have to pledge any collateral, asset 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 supported 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?
In conventional personal loans, 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 forbids transactions that are interest-based (riba). it is based on the principles of earning through the selling and purchasing of commodities where the lender will first purchase the commodity on the borrower’s behalf, and then selling it at a profit back to him/her. 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.
So in a nutshell, instead of ‘interest” (riba), a “profit rate” will be defined in the financing agreement or 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.
Online loans and bank personal loans are two common options for borrowing money, but each has its own set of benefits. instaDuit offers several advantages over bank loans, including:
- Convenience: Online loans can be applied for and approved from the comfort of your own home, 24/7. This eliminates the need for trips to the bank and reduces the time it takes to get approved.
- Speed: Online loan applications can be processed much faster than bank loans. instaDuit processes your application in as little as 24 hours, while bank loans can take several days or even weeks to process.
- Flexibility: Online loans often offer more flexible repayment terms than bank loans, making it easier for borrowers to find a payment plan that fits their budget.
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.A personal loan insurance or Takaful plan can provide coverage in case of permanent disability or death, which could leave you unable to repay your loan. This can give you peace of mind, knowing that your loan payments will be covered if you are unable to make them due to a permanent disability, and that your assets will not be used to repay the loan in case of death. The insurance or Takaful fees are normally deducted from the disbursed 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 financial issues in the past and it appears on your credit report – are you still able to apply for a personal loan? The answer is – Maybe.
Different lenders interpret and evaluate the information in various ways. Typically, lenders take into consideration factors like your payment history (e.g. number of late or missed payments), your utilisation of your credit cards, loans that you have defaulted etc. These can be indications of poor money management which might eventually give them the impression that you have a bad credit.
However, if you have been rejected at one lender, it does not necessarily mean that the other lenders will turn down your application too. Some lenders might approve your application, albeit at a lower loan amount, longer tenure or even higher interest rates. Therefore, it is safe to say that it is subjective if your credit score is bad,
My credit score is bad, what does it mean?
Your credit score is a crucial factor that lenders consider when evaluating your loan application. A high credit score can increase your chances of getting your loan approved but a low credit score can turn out otherwise.
In Malaysia, the two of most prominent providers to obtain your credit profile or reports are CTOS and CCRIS. CCRIS is under the jurisdiction of Bank Negara Malaysia, while CTOS is a private credit reporting agency that operates under the Credit Reporting Agencies Act 2010. CCRIS collects information about individuals from financial institutions, whereas CTOS gathers information from various sources, such as the National Registration Department, the Companies Commission of Malaysia, and the Insolvency Department.
Financial institutions and lenders are not favorable of applications who show the following financial behaviours:
- High Debt Servicing Ration or DSR – As the definition shows, Debt Servicing Ratio measures the amount of borrowings you have over your net income i.e. how much your monthly financial commitments is relative to how much you earn; A healthy DSR (monthly financial commitment/income) would be one that is below 60%.
- Missing or not paying your loan repayments – If you miss, are frequently late with, or default on your loan payments, your loan provider will charge you interest on the outstanding amount, and most likely a late fee. Your loan provider’s actions will be reflected in your CCRIS credit history, showing that you were behind on your payments. Payments that will flag up in CCRIS includes those from personal loans, home loans, car loans, credit cards as well as your PTPTN loans. A loan is a loan – and you still need to pay it back.
- If your CCRIS report shows that you have a “Special Attention Account”, financial institutions will not be allowed to lend you money. This typically indicates that a financial institution or a bank is closely monitoring your financial situation and may be in the process of recovering a loan, or even taking legal action against you.
- Multiple loan applications within a short period – You will be flagged as a high risk applicant by the financial institution or bank as you may be perceived as being desperate financially.
So back to the question, do you stand a chance to get a loan with bad credit score? You may still stand a chance of getting a loan approved. However, this is highly dependent on how you can demonstrate to the lender that you can pay your loan repayments on time. You can convince them by showing them that you have a strong and stable monthly income, having a permanent job with a large company. Saying this, the final decision will still lie with the institution that you are applying to.
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 improve my chances to get a personal loan approval?
Here’s what you can do to improve your chances of successfully getting the financing you need:
- Check your Credit Report
A mistake like this can happen, where a lender may report that you are not making timely payments when in fact you have paid what you owe. This is why it’s important to regularly check your credit report.
Keep in mind that your credit report isn’t just affected by bank borrowings. Your CTOS bereau report also shows if any legal action has been taken against you, such as a suit filed by a telco or utility company to collect unpaid bills. If you want to dispute a claim made against you, you can request a data review with the credit bureau agency.
- Clear all outstanding payments
If you have been late in your payments with your credit card bills, car or home loan repayments – please make sure you settle them as soon as possible.
Remember that your credit score is a major way that lenders determine whether or not you are a good paymaster. If you have a low credit score, it can be difficult to get a loan. This is because lenders may see you as a higher risk borrower who may have trouble making payments.
- Be patient
When you pay off your debts and balances, it will typically take about 12 months for that information to be cleared from your record. In some cases, your only option may be to wait for that to happen.
- Rebuild your credit standings
If you have the time and ability to do so, improving your credit profile is one of the best things you can do. This can involve paying your bills on time, keeping your credit utilization low, building up savings, and ensuring that your accounts are active. Doing this can lead to higher approval rates and lower interest rates on loans and credit cards.
To improve your credit profile, you should make sure to pay your bills on time, keep your credit utilization low (ideally below 20% to 30%), build up your savings, and ensure that your accounts are active. These are just some of the steps you can take to improve your credit.
- Apply for a lower loan amount
Even if you want a large loan, the lender might be more comfortable lending you a smaller amount. If you are able to successfully repay this smaller loan, you will improve your credit profile and increase your chances of being approved for a larger loan in the future.
- Strengthen your personal loan application
Personal loans are typically unsecured, but if you have poor credit, you may need to provide some sort of guarantee to the bank to improve your chances of being approved for a loan. This could include finding a guarantor, consignor, or providing collateral. You may also be able to pledge financial assets. While this may not always work, it’s worth trying if you need to get a personal loan.
- 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.
Finally, if you have been rejected for all your personal loan applications, you need to take a serious look into your financial situation. Taking on more debt would not be the solution and you need to manage your money better or seek advice from the professionals (like AKPK) to help you improve your financials. We wish you the very best.
Borrowing from an Ah Long or Loan Shark vs a licensed moneylender
“Ah Long”, Moneylenders and Loan Sharks 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 their loan
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 12% per annum or 1% per month
- The maximum interest rate for unsecured personal loan is 18% per annum or 1.5% per month
- The approval and disbursement of loans must be done in person, requiring physical verification (i.e. face-to-face) of the borrowers’ identity.
- They have to evaluate the borrowers’ financial situation
- They have to explain the terms and conditions of the loan agreement during the contract signing
- Signing the loan agreement must be conducted in the office and registered business address of the licensed moneylender
- 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.