Affordable KL Parking Rates Near Pavilion And KLCC

  • By CompareHero.my
  • April 15, 2021

Looking to stretch your legs and shop after the MCO stay-at-home period? Your favourite shopping malls await. However, have you factored in the extra amount of money you’ll spend on parking?  After months of not going to the malls, your wallet will have to accommodate costly parking expenses again.

Malls like KLCC and Pavilion have some of the highest parking rates in Malaysia. You can save by checking out the locations near these malls that offer cheaper parking.

KLCC

Planning to spend a lot of time at KLCC? According to the rates shared by parking.com.my, the cost of parking here can get really pricey. There’s no maximum cap during the weekend, so your parking expenses can go sky high.

KLCC
Monday – Friday
First hour or part thereofRM5
Every subsequent hour or part thereofRM4
Maximum rate (5pm – 5am)RM17
Saturday (before 12pm)
First hour or part thereofRM5
Every subsequent hour or part thereofRM4
Saturday (after 12pm), Sunday, and public holidays
First 3 hours or part thereofRM5
Every subsequent hour or part thereofRM4

Estimated parking cost if you spend four hours at KLCC from 11am – 3pm on a Saturday (brunch + shopping): RM17

Related: 6 Best Shopping Credit Cards For Malaysians In 2021

mall-parking-rates-3
There’s no maximum cap for parking at Suria KLCC during the weekend.

Cheaper parking near KLCC

You can try to park at the Avenue K Shopping Mall, which is located just across the road from the Petronas Twin Towers. The parking rate here is slightly lower than KLCC.

Avenue K Shopping Mall

Monday – Saturday
First hour or part thereof: RM3
Subsequent hour or part thereof: RM3
Flat rate (6.00pm – 5.30am): RM8 / entry

Sunday and public holiday
First 3 hours or part thereof: RM4
Every subsequent hour or part thereof: RM3

If you plan to spend the whole day at KLCC, Wisma Central is a good place to park in. From here, it’s just a seven-minute stroll to KLCC. It has a max cap of RM25 per day.

Wisma Central

Monday – Saturday
First 30 minutes or part thereof: RM3
Every subsequent 30 minutes of part thereof: RM3
Flat rate (7pm – 7am): RM5 / entry
Max rate per day: RM25

Sunday and public holidays
Flat rate: RM5 / entry

Megan Avenue 2, an office complex along Jalan Yap Kwan Seng, is a 10-minute walk away from KLCC. However, its parking rate is also much cheaper.

Megan Avenue 2

Monday – Saturday
First hour of part thereof: RM3
Every subsequent hour or part thereof: RM2
Flat rate (6pm – 7am): RM4 / entry

Sunday and public holidays
Flat rate: RM4 / entry

Related: Ultimate Guide To E-Wallet In Malaysia – Which Should You Get?

Pavilion KL

Pavilion KL is one of the most popular attractions in Bukit Bintang, Kuala Lumpur’s shopping paradise. There’s so much to see, eat and shop here. Most of your favourite fashion retailers have an outlet at the mall. Its restaurants also offer a wide variety of cuisines.

However, the mall has a maximum parking charge of RM30 per day.

Pavilion KL
Monday – Friday
1st hour or part thereofRM3
Every subsequent hour or part thereofRM3
Maximum rate per dayRM30
Flat rate (5pm – 7am)RM8 / entry
Saturday, Sunday, and public holidays
1st hour or part thereofRM3
Every subsequent hour or part thereofRM3
Maximum rate per dayRM30
Flat rate (5pm – 7am)RM10 / entry

Estimated parking cost if you spend four hours at Pavilion KL from 11am – 3pm on a Saturday (brunch + shopping): RM12

mall-parking-rates-1
Pavilion KL has a maximum parking charge of RM30 per day.

Cheaper parking near Pavilion KL

Starhill Gallery, which is located just 200m away from Pavilion KL, is a good alternative parking spot.

Starhill Gallery

Monday – Friday
First 3 hours or part thereof: RM5
Every subsequent hour or part thereof: RM3
Flat rate (after 5pm): RM7 / entry

Saturday, Sunday, and public holidays
Flat rate: RM10 / entry
Maximum rate per day: RM15

Another good place to park would be Wisma Chuang (formerly known as Central Plaza), which is also situated about 200m away from Pavilion KL.With a flat rate of RM7 per entry, this building offers a much more affordable parking rate than Pavilion KL.

Wisma Chuang

Monday – Saturday
First hour or part thereof: RM4
Every subsequent hour or part thereof: RM3
Flat rate (6pm – 7am): RM7 / entry

Sunday and public holidays
Flat rate: RM7 / entry

You can also park at Menara AIA Sentral, a building that is located about 245 metres away from Pavilion KL. If you’re planning to spend the whole day shopping at Pavilion KL and the surrounding Bukit Bintang area, all you have to do is pay RM3 per hour between Monday and Saturday, and a flat rate of RM7 per entry for Sunday and public holidays.

Menara AIA Sentral

Monday – Saturday
First hour or part thereof: RM3
Every subsequent hour or part thereof: RM3
Flat rate (6pm – 7am): RM6 / entry

Sunday and public holidays
Flat rate: RM7 / entry

Related: 7 Budgeting Management Apps That Can Help You Track Your Expenses For Free

Lot 10, a shopping mall that is situated slightly over 300 metres away from Pavilion KL, presents another alternative parking spot for you. It’ll only take you a few minutes to walk 300 metres to Pavilion KL.

There are several malls in Bukit Bintang with cheaper parking rates compared to Pavilion KL.

Lot 10

Monday – Friday
First 3 hours or part thereof: RM5
Every subsequent hour or part thereof: RM3
Flat rate (5pm – 7am): RM7 / entry

Saturday, Sunday, and public holidays
First 8 hours or part thereof: RM10
Maximum rate per day: RM15

Sungei Wang Plaza, another legendary mall in Bukit Bintang, is also within walking distance to Pavilion KL at 590 metres away.

Sungei Wang Plaza

Monday – Friday
First 2 hours or part thereof: RM4
Every subsequent hour or part thereof: RM1
Flat rate (6pm – 7am): RM5 / entry

Saturday, Sunday, and public holidays
First 2 hours or part thereof: RM4
Every subsequent hour or part thereof: RM2
Flat rate (6pm – 7am): RM5 / entry

To minimise physical contact in the COVID-19 era, the KLCC and Pavilion KL car parks also accept debit and credit cards, as well as Touch ‘n Go. Their terminals are supplied by cashless payment kiosks provider Sonicboom Solutions. You can enjoy similar cashless payment convenience at Plaza 33 PJ and Kelana Centre Point.

If you’re planning to pay for parking via cashless payment, using a suitable credit card can help you lower your parking expenses even further with up to 30% cashback. Apply for a card that suits your needs with us today and you could be rewarded with amazing prizes!

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How Much Can A GrabFood Or Foodpanda Rider Make?

  • By CompareHero.my
  • April 14, 2021

Just not too long ago, the technology of getting your food delivered with just the touch of a finger was released to the Malaysian public. Since then, there have been hundreds, if not thousands of individuals that have tried to make some side income out of being the person who delivers the food. Some even took this opportunity to go full-time, ditching their 9 to 5 entirely.

Of course, we’re talking about GrabFood and Foodpanda.

Nonetheless, this technology and opportunity is still considered new. Because of that, many Malaysians who want to give this opportunity a try might still be considering it because they don’t know if they can support themselves and their families through this. Ergo, the question still persists, how much can you make as a GrabFood or Foodpanda rider in Malaysia and is it really worth it?

Related: #DigitalCareers: 10 Ways To Upskill and Reskill Amid COVID-19

What does the Grab Delivery and Foodpanda Partner entail?

Grab Delivery and Foodpanda are essentially food delivery services that allow the users on their respective apps to order foods from their favourite restaurants and have them delivered to their doorstep. This partnership programme, however, is the person who is doing the collecting from the restaurant and delivering it to the customer.

Pros of being a food delivery rider

The biggest benefit of being a food delivery rider is that you’ll get to work on your own time and take breaks based on your own schedule. This itself is the reason why many people choose this gig as one of their side hustles during weekends.

This flexibility means that if you choose not to work for a day or two, that’s completely up to you. You are not obliged to do work and there is nobody to report to. On top of that, you get to decide what time you want to work, whether you want to start as early as 6am in the morning or work until late at night.

grabfood-foodpanda-income-2
The biggest benefit of being a food delivery rider is that you’ll get to work on your own time and take breaks based on your own schedule. 

Cons of being a food delivery rider

If we’re talking about doing this full time, the bad thing about this is that you won’t get paid if you’re not doing the job. That means that if you’re sick and couldn’t be out delivering food or parcels, it might be tougher to cover your medical costs.

The second thing is that for the most part of your job, it will require you to collect from a place that you most probably have never been to. Because, well, some people just have weird tastes. Because of that, you will have to locate the designated Grab rider parking area, identify where you should go and get to it on time. If you do not, the customers are going to start questioning why.

Lastly, when you’re on the bike for long hours under the scalding sun in Malaysia, it will get super tiring physically and it may cause long-term harmful effects to your body. Especially considering that the riding position is always hunched down.

To top that, sometimes, heavy rain, bike malfunctioning, bad traffic, and even the app downtimes can cause a dent in a Grab rider’s income.

Related: #DigitalCareers: How To File Your Income Tax As A Freelancer

What are the average salaries of a Grab Delivery Partner and Foodpanda rider?

To start with, how much a food delivery rider really earns really depends on the number of completed trips that they’re making per day. Bear in mind that some drivers do this for over 10 hours a day while some only do it for two a day outside of their full-time hours.

Now, let’s do the maths.

Let’s give it a hypothetical example where a rider takes about an hour to complete one order. Starting from the pick-up all the way to the doorstep of the customer. Here are the estimated earnings per order based on our resources:

 GrabFoodpanda
Estimated income per orderRM10 per orderRM4 per hour (base pay) + RM4 per average order = RM8
Hours worked per month160160
Estimated monthly income (if a rider delivers one order per hour)RM1,600RM1,280
Sources: The Rakyat Post, New Straits Times, Celcom Lifestyle Blog

grabfood-foodpanda-income-1
Top-performing riders can earn more because they will have already known about the city like the back of their hands.

The top-performing riders can definitely earn more than this because they will have already known about the city like the back of their hands. Hence, they can sometimes pick up multiple orders at once while still being able to deliver them on time. On top of that, they also get compensated if they choose to deliver during late hours.

To be brutally honest, delivering one order at a time is very time consuming and it can be really tough to pad your wallet. If you have lady luck on your side, you may sometimes encounter a giant order for some event or a party with over 4 or 5 figures’ worth. That’s when the numbers on your screen skyrocket.

Related: Job Loss Amid CMCO: How To Bounce Back From Retrenchment

To answer the elephant of this article, is it worth it to be a Grab Food or a Foodpanda food delivery rider in Malaysia? It really depends on how you want to structure your day. Take this gig as one of the options you can choose from to generate some side income while working at your full-time job.

This gig can be physically tough, as well as mentally. However, you are your own boss when you decide to take this on. Be sure to think about whether or not you have the time and capacity for this role. But if you’re still young and can work really hard, there is a good chance that you can generate a five-figure income.

Looking to make extra income from part-time gigs and freelance jobs? Check out our career-related articles here:

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Ramadan 2022: How To Celebrate Ramadan During A Pandemic

  • By CompareHero.my
  • April 13, 2021

It’s that time of the year again where approximately 1.9 billion Muslims or 26% of the world’s population will be fasting for a month starting today. Healthy adult Muslims will abstain from food, drink and other impermissible or immoral acts such as smoking from fast from dawn until dusk.

In a multiracial country like Malaysia, approximately 60% of its 28 million population are Muslims—so it’s a norm to see large crowds of congregational prayers, communal feasting and other practices in this month which is dedicated to worship, charity and community.

What is Ramadan?

Considered the holiest month for Muslims, Ramadan is the ninth month in the Muslim lunar calendar. During this month, Muslims are encouraged to engage in acts of worship such as prayer, reading the Quran and charity. Muslims also believe the Quran was revealed in Ramadan.

Muslims wake up early to eat a pre-dawn meal called sahur and they break their fast with the iftar, an evening meal directly after sunset when Muslims end their daily Ramadan fast. Other common rituals this month include nightly prayers called tarawih which are held in mosques after the iftar.

But of course, different cultures will have different traditions during Ramadan. One common virtue carried out throughout this month is for Muslims to demonstrate more generosity. Some exemplify this by donating to charity, share food with the needy or invite guests over for iftar.

At the end of Ramadan, Muslims will celebrate a month of fasting with a feast called Eid al-Fitr or commonly known as Hari Raya Aidilfitri in Malaysia. This is where our Muslim brothers and sisters will dress in their best clothes and give to charity.

This year’s Ramadan, which will run from today until Thursday, May 13, is expected to be a little different from pre-pandemic celebrations with the pandemic still in effect and vaccines yet to be fully distributed.

For Muslims celebrating, and non-Muslims interested in the holiday, here are some things you can do to elevate the Ramadan spirit this year.

6 ways to celebrate Ramadan during the COVID-19 pandemic

islamic quran mobile app ramadan
One can also experience spirituality and religion digitally via mobile apps. 

1. Stay spiritually connected via virtual platforms

During Ramadan, many Malaysian Muslims will typically return to their hometowns to break fast and come together with their families. Similarly, communal prayer and reading of the Quran with friends and family is also hugely common.

However, because of the COVID-19 pandemic, Malaysian Muslims are not allowed to cross state borders or engage in activities that involve large crowds. In fact, those trying to sneak across state borders will be issued summonses, according to Bukit Aman crime prevention and community safety department (JPJKK) director Zainal Abidin Kasim in FMT.

Furthermore, the Malaysian government will decide on whether interstate travel will be allowed for Hari Raya Aidilfitri during the month of Ramadan, according to Senior Minister Datuk Seri Ismail Sabri Yaakob. The decision will depend on the assessment made by the Health Ministry.

However, this lacking physical sense of community does not have to hinder one from experiencing spirituality or carrying out their worshipping duties. You can still stay connected with your community via digital platforms.

Check with your local mosque or community centre to see if they have any virtual events that meet your interests. Or you can deepen your religious understanding through Islamic podcasts. One such example is Muslim Central which has podcast series with speeches from well-known Muslim speakers like Mufti Menk, Omar Suleiman, Nouman Ali Khan, and Yasmin Mogahed.

Though you can’t recite the Quran together in a group, you can always form virtual Quran recitation groups with your friends and families or create one with your neighbourhood members.

2. Virtual iftars and sahurs

family gathering during berbuka
Some may have the privilege of breaking their fast together with loved ones, while others may not be as lucky because of the pandemic. If you are missing loved ones back home, you can still break fast with them via video conferencing tools. 

Though there’s no harm in breaking fast with your family and friends at your favourite restaurant—as long as you adhere to the standard operating procedures (SOPs)—we still recommend you stay safe until the vaccines are fully distributed for safety precautions.

But just because you should stay distanced and keep iftar guests to a minimum (we recommend 10 the most), it doesn’t mean you have to have your meals alone or without family and friends.

You could also break your fast with families from your hometown or village via video conferencing platforms such as Zoom, Google Hangouts, and Microsoft Teams. You can schedule your time with family and friends by using Calendly.

Related: Everything You Need To Know About Zakat In Malaysia

3. Perform tarawih prayers at home

Though Ramadan bazaars are still expected to commence as usual in some states, you may or may not have the opportunity to perform tarawih prayers with a large congregation this year depending on which state and city you live in because the number of spots may be limited or on a first come first serve basis.

Though some states like Selangor and Johor have allowed Muslims to perform 20 rak’ahs of tarawih prayers in mosques and suraus during Ramadan this year, the final authorisation will still depend on the management of your local mosques or suraus.

Some local mosques such as the Masjid Diraja Tengku Ampuan Jemaah in Bukit Jelutong only allows a capacity of 1000 for male worshippers and 250 spots for female worshippers.

At the same time, the government has advised mosques and surau managements to recite short surahs or common verses, when performing the sunnah prayers.

But that’s okay! Since last year, Muslim scholars across the world have released guidelines on how to perform the tarawih at home.

Here’s a quick visual guide on how to perform the tarawih and witr prayer at home with your beloved family.

If you didn’t already know, tarawih refers to the additional ritual prayers performed by Muslims at night after the Isha prayer during the holy month of Ramadan.

Besides fasting during daylight hours, other common practices observed by Muslims during this holy month is to take part in shared meals and communal prayers, known as tarawih, or night prayers.

Extra tip: Since Ramadan is a month of spiritual growth, this is a great opportunity for Muslims to gain new habits. So if you already are in the habit of praying five times a day, you can try to go the extra mile by adding more prayers at night.

Get a prayer buddy to check in if you need someone to keep you accountable and on track with your goal. You can also use a prayer app if you need to pray around your schedule.

Related: The #30DaysBudgetHero Challenge: Completing Ramadhan on RM1,000

4. Ramadan: a month of fasting, but also giving

sadaqah during ramadan
Sadaqah is a voluntary charitable act towards others.

Though giving sadaqah is important all year long; it is believed to carry even more significant value and is more rewarding in the month of Ramadan.

Sadaqah is greatly endorsed in Islam, and Muslims are advised and encouraged to share what they have been blessed with by distributing it to those are the underprivileged and underserved.

In Islam, charity is not only beneficial for those who receive it, but is also rewarding for the ones who give, and it acts as a means of salvation for them as well.

Due to the movement restrictions, Muslims may not be able to donate or give charity in the traditional sense—it’s harder for them to meet face to face with the affected groups to hand over financial and material support.

Plus, a recent directive issued by the Kuala Lumpur City Hall (DBKL) revealed that individuals and groups are prohibited from distributing food directly to the homeless people around the city centre during Ramadan as an effort to prevent waste and pollution and curb the spread of the COVID-19 pandemic.

But don’t let this discourage you as there are other ways to make sadaqah. With the technological advances in the financial sector, there are alternative and easier ways to do charity via the Internet.

And thanks to the widespread use of smartphones and tablets, fintech (financial technology) has given a new approach for Muslims and non-Muslims to help others that transcends geographical boundaries and time barriers.

One such instance is Global Sadaqah, an award-winning CSR, zakat and waqf management platform that works with religious bodies, foundations, banks, corporates and the public to increase the efficiency, sustainability and impact of social finance.

Just through its platform alone, you can donate RM320 to feed a family of five in Nigeria. There are other initiatives that support Malaysians, as well, such as this initiative to crowdfund for developmental screening in the community, more specifically children and families in urban PPR, the refugee community and families with issues.

5. Just dine-in—Ramadan is a great time to try new recipes

kuih for berbuka
Always wanted to try a new recipe? Now is a great time to give it a go.

If you would like to avoid the usual crowds of Ramadan bazaars, you can always try cooking and exploring new recipes by yourself this Ramadan. Doing this will help change things up and satisfy your cravings.

Here’s our take for a recipe that you can try when breaking your fast or when having your sahur.

Try this classic North African and Middle Eastern dish called Shakshuka; you can have it for breakfast or any meal of the day. This dish consists of tomatoes, onions, pepper, spices, and eggs.

It’s also pretty easy to make and is similar to the Turkish dish ‘Menemen’ and to the Latin American breakfast dish ‘Huevos Rancheros.’ Here’s the recipe we found online.

6. But if you are going to Ramadan bazaars …. remember to adhere to the SOPs!

bazar ramadan during mco
Though COVID-19 cases have been going down in recent weeks, you should still be vigilant, especially when going to Ramadan bazaars.

Though you can’t celebrate Ramadan with loved ones back in your hometown, you can still buy from your favourite Ramadan bazaar.

The Kuala Lumpur City Hall (DBKL) told the media that Ramadan bazaars will operate at 65 locations in the federal capital, with business hours expected to be 3 p.m. to 8 p.m. during the fasting month.

Ramadan 2021 in a glance


Duration:
April 13 to May 13

When visiting Ramadan bazaars near your house remember to:

  • Wear a face mask
  • Check your body temperature
  • Check-in with the MySejahtera app

DBKL said a total of 63 locations will be supervised by the organiser of the bazaar while City Hall itself will supervise the bazaars at Taman Tasik Permaisuri car park (near Kuala Lumpur football stadium) and Jalan 4/38 A Taman Sri Sinar, Segambut (Wisma Suhati).

Visitors to Ramadan bazaars are required to comply with rules set by the National Security Council, which include wearing face masks, scanning body temperatures and to check-in with the MySejahtera app.

However, not everyone will get to experience Ramadan bazaars this year as some states such as Kelantan have cancelled all Ramadan bazaars in the state following the recent surge in COVID-19 cases.

Related: Cadangan Bisnes & Makanan Bazar Ramadhan Yang Menguntungkan

The beautiful month of Ramadan

To millions across the globe, Ramadan is the most awaited month of the year. It’s a time of worshipping, giving, and reflection of one’s values.

It’s more than the holiest time in the Islamic calendar—it’s that time of the year when more than 1.9 billion Muslims embark on a journey to be the best versions of themselves.

We wish all Muslims, particularly Malaysian Muslims a blessed Ramadan Mubarak!

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What Happens When You Make Late Loan Repayments

  • By CompareHero.my
  • April 12, 2021

Think that making late loan repayments is not a big deal? Think again. Whether it’s a personal loan, home loan, credit card or even study loan, here are the consequences that can happen if you miss your repayments.

1. You have to pay more

Whether it is repayment for a personal loan or your credit card, you will be charged late payment fees and other finance fees.

Something else you should know about is the tiered pricing system which was implemented by Bank Negara Malaysia. As a result of not making prompt payments, banks have the right to increase your interest rate.

This tiered pricing is for credit cards. For example, if you have a credit card with an interest rate of 15% per annum, the interest rate you will be charged can be increased to the maximum if you miss your repayments.

It was implemented in July 2008 to promote prudent financial management and encourage good financial discipline amongst credit card users. The tiered pricing structure is as below:

  • Tier 1 – Maximum of 15% per annum (applicable to those who promptly settle their minimum payment for 12 consecutive months);
  • Tier 2 – Maximum of 17% per annum (applicable to those who promptly settle their minimum payment amount for at least 10 months in a 12-month cycle)
  • Tier 3 – Maximum of 18% per annum.


As for personal loans and home loans, banks have the right to increase your interest rate if you have been missing your repayments. Not all banks impose such practices, but most do, so paying all of your loans on time is the safest and better option.

2. You can lose your assets

When it comes to mortgage loans or hire purchase loans, aside from having to pay higher interest rates, you can actually lose your assets if you keep making late repayments.  Make prompt repayments to avoid having to deal with your car being repossessed, or in other words, kereta kena tarik.

On top of having to pay for all of the arrears and late payment charges, you will also have to pay for the cost of your car being repossessed before you can get it back.

Once you’ve made ALL of the payments and obtained the letter from your bank for your car to be released, then you’ll have to get your car from where it has been stored by the bank. as you can see, making late payments is costly and will cause you a lot of hassle.

As for home loans, if there are arrears in your payments, you have the risk of having your home auctioned by the bank. Make sure you make prompt repayments for your home loans, instead of running around in a panic when you receive court orders that your house will be auctioned.

Ensure that you don’t miss out on repayments too as that is even worse than late payments. Remember, until you pay off all of the home loans in full, the house is not yours and still belongs to the bank.

Related: Here’s Everything You Need To Know About Down Payments

3. You have problems applying for other loans or financial services in the future

If you have been making late payments for your loans, you jeopardise your access to financial options in the future because it will affect your credit score. Your poor repayment pattern will be reflected in your credit score, and your credit score is important because financial institutions and even some landlords will have a look at it.

The credit score is used by banks to determine whether or not to approve your loan application, and also how much interest you will be charged. If you have a bad credit score, you may be charged a high-interest rate or worse, your application will be rejected.

Some landlords will request for your credit score and this may be to see if you are disciplined with repayments for your existing financial commitments before agreeing to lease their property to you. Sometimes how well your credit score is will also decide if you get a job or not, especially if you are applying for a position related to financial services.

As you can already see, making sure your credit score is in good shape is important to ensure you get better offers when applying for financial services and products, as well as  for your career. But don’t worry, you’re in control of having good credit score and one of the ways is to be disciplined with your repayments.

Related: 4 Ways A Bad Credit Score Can Impact Your Life (And How You Can Fix That)

4. You may be barred from leaving the country

Don’t risk missing out on that holiday you’ve been planning and looking forward to for weeks! This is especially relevant for PTPTN borrowers. If you have outstanding PTPTN loans, PTPTN will inform the immigration department and you will then be blacklisted in the immigration’s database. As a result, you cannot leave the country, or even renew your passport until you make payments for your overdue amount of your PTPTN loan.

Related: What Happens If You Don’t Pay Your PTPTN loan

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Understanding Peer-To-Peer Lending in Malaysia

  • By CompareHero.my

Do you know much about peer-to-peer lending in Malaysia? No? Great, this article is just what you need.

In Malaysia, the number of small and medium enterprises (also known as SMEs) are rising in parallel to the growing digital economy of our country.

SMEs are important to our economy because they make up 97% of business establishments in Malaysia; contributes 37% of the country’s Gross Domestic Product (GDP), and contributes 65% to the country’s workforce. In 2020, the government aims to push SME’s contribution to GDP to 41%.

But here’s the single biggest issue that SMEs around the world, including Malaysia, face: a lack of financing or limited financing access. Why? Because many of them lack the requirements to obtain financing from the bank or can’t borrow the amount they need in order to grow from the conventional money lenders.

Did you know?
The Securities Commission Malaysia (SC) said there is currently an RM80 billion funding gap faced by SMEs.

Bearing in mind that SMEs play a critical role in the prosperity of our economy – business productivity, GDP, and the country’s employment – they need alternative sources of funding and this is where P2P lending comes into play.

Related: Understand the Risks of P2P Lending Before You Invest

What is Peer-to-Peer (P2P) Lending?

Peer-to-peer lending or financing (a type of crowdfunding) is a way for individuals or businesses to request funds from investors via a digital platform. The digital platform serves as the middle-man or an intermediary between the requestor and the investor. Multiple investors then contribute their funds towards a request made by an SME. It essentially connects SMEs seeking financing to investors seeking attractive returns.

How does P2P lending work?

We’ll walk you through a peer-to-peer lending example.

Let’s say, Company A requests funds of RM20,000 to grow the business. Company A raises this request via a P2P lending platform online and offers an investment opportunity to investors. An interested investor will then choose to lend his money to Company A.

Multiple investors may choose to deposit RM100 or even RM10,000 depending on their risk appetite. The funding continues until the target of RM20,000 is achieved, at which point, the offering is closed and the funding will be given to Company A. Company A will make monthly repayments to their investors including interest charges. Charges for services rendered by P2P lending platforms may vary.

Interest rates are calculated based on the credit assessment and risk profile of your company by the P2P lending platforms, which requires you to disclose key details including financial information, business plans, the purpose of funds, etc.

Securities Commission Malaysia has declared that interest rates are capped at 18% per annum with credit scoring methodologies made transparent to both investors and borrowers.

Pretty cool huh? Essentially, it provides a financial solution for SME owners who need additional funding for cash flow or as capital to grow their business. This is an alternative solution for SME’s that need short-term funding or that don’t qualify for a loan from a bank.

Thanks to the internet, there are now digital platforms in Malaysia and around the world which greatly expands the number of people you can borrow from. It also means that funding can be obtained within 1-2 weeks of submitting your request through p2p financing.

Hang on! Don’t confuse P2P with crowdfunding as these are fundamentally two different things.

In P2P lending, investors lend to people or businesses who repay the investors the loan amount plus interest, a similar model as bank funding.

Crowdfunding is less straightforward – reward-based crowdfunding like Kickstarter help people fund a project or product and in return, they receive the product. It’s almost like a form of sponsorship.

Equity-based crowdfunding allows investors to buy shares in the business in exchange for an upfront loan. This means the investor will own a part of the business.

Is peer-to-peer lending safe?

To answer that, it might help to understand the history of this financing platform.

P2P lending is relatively new to Malaysia, but rest assured this business model has been around most notably in the United States, the UK and China from as early as 2005. In short, it has been trialled and tested in these developed markets.

Did you know?
China currently holds the record for the largest P2P financing volume in the world with a total funding distribution of USD300 bil in 2016! (Source: World Economic Forum)

What about peer-to-peer lending in Malaysia?

In an effort to expand P2P financing access for SMEs, the Securities Commission of Malaysia (SC) appointed six P2P operators to run P2P platforms namely B2B FinPAL, Ethis Kapital, FundedByMe Malaysia, ManagePayServices, Funding Societies Malaysia (Modalku Ventures) and Fundaztic (Peoplender).

Did you know?
As of 2016, Malaysia was the first ASEAN country to regulate P2P financing.

Is P2P Lending safe for investors?

For an investor, a risk is always present and with P2P lending, investors can lose a lot. For instance, borrowers may default on their payments leaving you with losses. Just like any other investment, with knowledge comes power and therefore, it is best to discover as much as you can about the SME you are thinking about lending your money to.

Another tip with P2P financing is to practice the virtue of patience. The most successful P2P lending investors have hundreds of loans across different P2P lending platforms, and most of the time they reinvest their returns.

Learn the tricks to invest wisely! Stay tuned as we’ll be writing an article on that soon.

Should you choose peer-to-peer lending?

The answer to this question depends if you are a SME owner or a potential investor.

P2P lending for businesses

1. Submitting a request for funding is easy

Since P2P lending platforms are digital, these operators use an online platform to facilitate the funding process. As long as you have an active internet connection, you can apply for financing once you have found your preferred P2P lending platform. It only takes a few minutes. We’ll be writing up a comparison of all the P2P lending platforms in Malaysia, so stay tuned for that.

2. Receive your desired funding amount quickly

Depending on the size of your funding request, you can get financing between 1-2 weeks of your application being made. You don’t have to worry about any financial delays such as waiting for a bank’s approval. It’s far quicker because multiple investors lend their money to you which means smaller funding needs can be met within a few hours. Even better, the funding that you need will be deposited directly into your bank account.

3. You don’t need to give up collateral

This is most likely an ideal solution for smaller businesses as you won’t have that much collateral to offer anyway. However, this is where interest rates kick in. Since you don’t have to offer collateral, your business will be assessed by P2P lending platform’s in-house credit rating model to determine a suitable interest rate for you to repay to investors.

4. You can get better interest rates

Some P2P lending platforms may even allow you to propose your desired interest rate and repayment period before their in-house credit assessment even begins. Remember, your business plan is also taken into account when determining an interest rate, which means that if you have a sound and logical financial plan, you may just have your desired interest rate approved!

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P2P lending for investors

1. You can get better returns

With any investment vehicle, there is risk involved. However, with P2P financing the investment risk usually comes with higher returns. This is because you can choose to invest in a number of businesses across different P2P lending platforms. Remember that you can study the borrowers you are thinking about investing with, which means you will have insights into their business plan and use of the money you will be lending them.

2. Free to choose who you lend to

This relates to the first point. Since you are able to learn more about these SMEs, you can choose to invest in a company that you truly believe in, or perhaps that speaks to a passion of yours. It gives more meaning to your investment.

3. You won’t need a lot to start investing

Some P2P lending platforms allow you to start investing from as little as RM100. This means you can start small, and then reinvest your returns once you see a positive growth trend in the company you are investing in.

4. It allows you to diversify your investments

We all know the trick to investing is diversification. Do not put all your eggs in one basket. If you choose to finance quality small businesses, you can get high, periodic returns on your investments which also comes with additional perks such as the low-entry requirement. This means you spread your risk and may be a great way for beginners to dip their toes into investing.

So where is the sweet spot?

For borrowers or SME owners, they can get better rates on their interest charges. For lenders or investors, they can get better returns on their investments. It’s a win-win situation!

Stay tuned for our next article that will compare all the P2P lending platforms in Malaysia.

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