A personal loan can be a helpful financial tool when used responsibly. However, it's important to understand the terms and conditions of the loan before you apply. Here are 5 things you should know before taking a personal loan in Malaysia:
- Choose a reputable lender
Not all lenders are created equal. Make sure you choose a lender that is licensed by Bank Negara Malaysia. This will help protect you from predatory lending practices.
- Calculate your debt service ratio
Your debt service ratio is the percentage of your monthly income that goes towards debt repayment. Lenders will use this ratio to assess your ability to repay a personal loan. A good rule of thumb is to keep your debt service ratio below 60%.
- Shop around for the best interest rate
Interest rates can vary significantly from lender to lender. Take the time to compare rates from different lenders before you apply for a loan. Compare interest rates via CompareHero to get the best deal that suits your financial situation, here.
- Consider the loan term
The loan term is the length of time you will have to repay the loan. A shorter loan term will mean higher monthly payments, but you will pay less interest overall. A longer loan term will mean lower monthly payments, but you will pay more interest overall.
- Read the fine print
Before you sign any paperwork, be sure to read the fine print carefully. This includes the terms and conditions of the loan, as well as any hidden fees.
Here are some additional tips for getting a personal loan:
- Have a clear goal for the loan.
What do you need the money for? Once you know what you need the money for, you can better determine the amount you need to borrow and the repayment terms that work best for you. Refine your goals, here.
- Build your credit score
A good credit score will make you more attractive to lenders and qualify you for lower interest rates. You can build your credit score by making on-time payments on your bills and loans.
Related: Ultimate Guide To Credit Scores
- Get pre-approved for a loan
Getting pre-approved for a loan will give you an idea of how much you can borrow and what the interest rate will be. This will help you avoid being approved for a loan that you can't afford.
Promo you don’t want to miss out on:
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