Compare Malaysia's Best Low Income Loans in 2020

Best low income personal loans in Malaysia


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What Is A Low Income Personal Loan?

Low-income personal loans refer to those loans that are offered to people with low-income. While there aren’t many personal loans for low earners, there are still some institutes that will offer you low-income loans if you meet their eligibility criteria.

How To Apply For A Low Income Personal Loan?

You can apply for a low-income personal loan in 2 ways: offline or online.When you apply offline, you have to apply on your own. You need to go to the bank of your choice, speak to a loan officer, fill up the application form, present your documents and submit the application.On the other hand, applying for a low-income personal loan online is far more convenient. You can use CompareHero to easily find and compare the best low-income personal loans offered in Malaysia. You can also use other online tools to find out your credit score, calculate loan affordability, download statements, and many more!

Who Can Apply For A Low Income Personal Loan?

Banks offer low-income personal loans to all Malaysian citizens. Here are the eligibility criteria for these loans:
CriteriaRequirements
Minimum Age18 or 21 (Depends on Bank)
Maximum Age60
Minimum IncomeRM1000 to RM2000 (Depends on Bank)

Do You Have To Be A Full-time Employee To Apply?

It’s not mandatory to be a full-time employee to apply for a low-income personal loan. However, like most loans, you will find it easier to get your low-income loan approved if you are a full-time employee.

Advantages Of A Low Income Personal Loan

1. These loans are multi-purpose

A low-income personal loan is versatile. You can spend the money from these loans on any personal expenses, including tuition fees, medical bills, wedding, holiday, and more.

2. Excellent credit is not required

You don’t need excellent credit in order to apply for a personal loan. Some lenders provide low-income personal loans even if your credit is not top notch.

3. Equal Installments

For any low-income personal loan, your installments will be equal throughout your loan tenure.

4. Fast loan approvals

Low-income personal loans are usually approved quite fast. If you apply online through CompareHero, you can have your loan approved within a few hours! After the loan gets approved, you can receive the money into a bank account of your choice.

 Disadvantages Of Low Income Personal Loan

Even though there are numerous benefits of low-income personal loans, these are not without disadvantages. Here are some drawbacks of low-income personal loans:

1. Your monthly payment and loan term are fixed

Many borrowers find fixed monthly payments beneficial, however, they can be a headache if you’re used to small monthly minimum payments and having as many years as you want to pay off credit cards.

2. They have higher interest rates than other loans

Depending on your eligibility criteria, interest rates for low-income personal loans can be higher than some loans. Personal loans are sometimes advertised at very low rates, but usually, the best rates are available to applicants with the best credit.

3. They attract scammers

You might get scammed while taking personal loans from dodgy lenders. You should always make sure to take every precaution and find out whether your lender is legitimate or not. For better safety, you can apply for low-income personal loans to reputable banks online through CompareHero.

4. You can be penalized for early settlement

Personal loans can come with a lot of different fees and charges. One of those common charges is the prepayment penalty. In simple words, if you pay off your debt before your loan tenure is over, the bank can charge you a penalty.

How To Calculate Monthly Repayment Of Low Income Personal Loan?

While low-income personal loans are suitable for those who have an urgent need for money, you still need to have a minimum salary or monthly earning to apply for one. There are banks that will offer low-income personal loans even if your monthly salary is as low as RM800.For example, if you have a minimum income of RM1,500 per month, you can apply for a maximum RM30,000 personal loan from RHB Easy Pinjaman. Here are the calculations if you are looking for a low-income personal loan of RM20,000 from RHB Easy Pinjaman for 5 years at a flat interest rate of 10% per annum:
Example
Loan amountRM20,000
Loan tenure5 years (60 months)
Loan interest rate10% p.a. flat
How much interest to be paid over 5 years?= RM20,000 x 10% p.a.= RM2,000 per year x 5 years= RM10,000What is the total amount you repay over 5 years?= RM20,000 + RM10,000= RM30,000What is the monthly installment?= RM30,000 ÷ 60 months (5 years)= RM500For this RM20,000 loan, you would have to pay RM10,000 interest over 5 years. So your total payment over 5 years would be RM30,000 and your monthly installment would be RM500.

Top Low-income Personal Loans For Salaried Employees

Minimum Monthly Income (RM)Bank / Finance Company
800CIMB
1,000JCL
1,500RHB
2,000Hong Leong Bank

Top Low Income Personal Loans For Government / GLC Employees

Minimum Monthly Income (RM)Bank / Finance Company
750RHB
800Bank Rakyat (for pensioners)
1,000Bank Rakyat
1,500AmBank
2,000Bank Islam

How Much Can You Borrow For A Low-income Personal Loan?

Depending on your salary and credit score, your loan amount can range from RM1,000 - RM150,000 and beyond. Since these loans are directly tied to your income, the higher you earn, the more you can borrow.Here is a table showing the maximum amount you can borrow from different banks:
BankMinimum Income (RM)Maximum Loan (RM)
RHB Easy PinjamanRM 1,500RM 30,000
JCL (Japan Credit Leasing)RM 1,000RM 50,000
Aeon Credit ServiceRM 1,500RM 100,000
Bank RakyatRM 2,000RM 30,000
Bank IslamRM 2,000RM 30,000
Hong Leong BankRM 2,000RM 250,000

Factors To Consider When Choosing A Low Income Personal Loan

Here are the factors that can help you choose the best low-income personal loan:

- Note Takaful Plans

Takaful plans are shariah-compliant policies that help you cover your loan. You can benefit from a Takaful plan if you die or get into any unfortunate accidents that makes it impossible to pay back the loan.

- Research The Best Deal

It's always a good idea to opt for lower interest rates. You should always ask around, and research to find the lowest interest rates. It's not worth it if you are taking a low-income personal loan that has higher interest rates.

- Fees & Charges

You should keep an eye on the fees and charges imposed on your loan. If necessary, the bank may absorb it or charge the fees on you. So always consider loan fees along with other costs before taking a personal loan.

- Opt For A Longer Tenure

If your earning is low, you need to keep your monthly installments low too. If a substantial portion of your earnings goes into paying off your loan every month, you may not have enough money left to live comfortably. In this case, the banks may even refuse your loans outright. With a longer tenure, your monthly installments will be lower. However, you need to keep in mind that longer tenure also means you will be paying a larger total interest over the time. So you should opt for a longer tenure only if you can afford it.

Documents Required To Apply For Low Income Personal Loan

For Salaried Employee:

#Document type
1Copy of MyKad or Passport
2Latest 3-months or 6-months salary slip (depending on the banks)
3Latest 6-months EPF statement
4Latest Form BE or e-Form BE, with valid tax payment receipt
5Latest EA Form

For Self-employed:

#Document type
1Copy of MyKad or Passport
2Business Registration Certificate
3Latest 3-months or 6-months company’s bank statements
4Latest Form BE or e-Form BE, with valid tax payment receipt
5Latest 6-months commission statements and bank statements (for commission earner)

For Government/GLC Employees:

#Document type
1A copy of your NRIC
2Latest 3 months of pay slips
3Latest EPF statement
4Confirmation letter from your employer

How To Improve The Chances Of Getting Your Low Income Personal Loan Approved By Banks?

While getting a personal loan with low income may seem daunting, it's actually simple and easy to get your loan approved quickly. If the banks see that you are trustworthy, you are more likely to get your loan approved. One important step here is to sort out all your legal documents correctly when applying for the loan. If you are honest and transparent, the banks may give you the loan without much hassle.

What's The Difference Between Takaful And No Takaful?

While anyone can buy Takaful or No Takaful policy, there are still some major differences between them.
With TakafulNo Takaful
In this policy, the risk is shared among the contributors. Everyone donates to a fund which is then used to protect other participants from financial ruin.It's also known as conventional insurance. An insurance company bears all the risk for a premium paid by people.
Operators will only invest in shariah-compliant instruments.Investments are usually in legal instruments like stocks, bonds, etc.
The profits are shared by everyone participating in a Takaful fund.Shareholders of the insurance company receives the profit.
Most banks will require you to be a Malaysia Citizen or Permanent Resident, aged 21 and above (but not over 60 years old) and earn a monthly gross income of at least RM3,000 or more. Proof of identification, income, and residence must also be submitted to be approved for a personal loan.Banks will also look at your credit rating before approving or rejecting the loan application.
Most personal instalment loans are repaid in fixed monthly instalments.Repayments can usually be made by mail, online, through an ATM, or at a bank branch. If the loan is from the same bank you keep your savings account in, your loan repayments can be automatically debited from this account.
Many Malaysian banks and lenders can lend from RM1,000 up to RM400,000, depending on the borrower's credit history or rating. Most banks and lenders set an upper limit on how much applicants can borrow, which can range from 6 to 10 times the amount of their current salary, or a fixed amount. Whichever amount is lower will be the highest amount the borrower can have.
What is a Personal Loan?A personal loan is a one-time loan where the principal and interest are repaid in small fixed amounts at regular intervals. Payments are usually made on a monthly basis for a predetermined period of time.When should I use a Personal Loan installment ?You can use a personal installment loan for needs that other loan types cannot cover. Examples include paying for weddings, renovations, and medical costs not covered by insurance.Some people prefer taking out a personal installment loan instead of using a credit card because the fixed monthly repayments are easier to plan for.For other purposes such as paying for cars, education fees, housing, it is usually cheaper to use a loan specific for that purpose. Ask your bank about car loans, education loans, home loans, et cetera. It is advised to only use personal loans when you cannot find a loan that matches your needs.Do I Qualify for a personal loan installment ?Most banks will require you to be a Malaysia Citizen or Permanent Resident, aged 21 and above (but not over 60 years old) and earn a monthly gross income of at least RM3,000 or more. Proof of identification, income, and residence must also be submitted to be approved for a personal loan.Banks will also look at your credit rating before approving or rejecting the loan application.How much Can I borrow ?Many Malaysian banks and lenders can lend from RM1,000 up to RM400,000, depending on the borrower's credit history or rating. Most banks and lenders set an upper limit on how much applicants can borrow, which can range from 6 to 10 times the amount of their current salary, or a fixed amount. Whichever amount is lower will be the highest amount the borrower can have.How Do I Replay My Loan?Most personal instalment loans are repaid in fixed monthly instalments.Repayments can usually be made by mail, online, through an ATM, or at a bank branch. If the loan is from the same bank you keep your savings account in, your loan repayments can be automatically debited from this account.What is The Difference between ans secured and unsecured Loan ?A secured loan means there is some form of collateral (guarantee) made to the bank. Examples of collateral include your property, car, stock portfolio, gold assets, etc. The value of the collateral must exceed the loan amount. If you do not repay the loan as agreed, the bank has the right to seize the collateral.An unsecured loan does not require collateral. There is no guarantee beyond your signed loan agreement (which is a legally binding contract).In general, unsecured loans have a higher interest rate than secured loans.What is loan Insurance ?Loan insurance, sometimes called "payment protection insurance," is insurance that helps protect loan policy holders from defaulting the loan. It provides financial support due to disability, unemployment, or other debilitating factors that prevents the borrower from repaying the loan immediately.What is a late fee?This is a fee imposed for missing repayments. There is usually a grace period of 60 days, starting from the stated date of repayment, during which late fees will not be charged.What is a processing fee? This is the amount charged for the administrative effort in granting you the loan (e.g. a legal team was required to draft the terms and conditions, staff are needed to upkeep accounts, and so on). Processing fees vary with each bank.What is a Pre payment penalty ?This is a fee imposed when you attempt to pay down your loan before the given loan tenure. To avoid this penalty, ask your bank or lending agency if they have policies on early repayment.   
A personal loan is a one-time loan where the principal and interest are repaid in small fixed amounts at regular intervals. Payments are usually made on a monthly basis for a predetermined period of time.
This is a fee imposed when you attempt to pay down your loan before the given loan tenure. To avoid this penalty, ask your bank or lending agency if they have policies on early repayment.
This is the amount charged for the administrative effort in granting you the loan (e.g. a legal team was required to draft the terms and conditions, staff are needed to upkeep accounts, and so on). Processing fees vary with each bank.
An annual fee is also known as a maintenance fee that is charged annually by your credit card provider. Some banks waive off annual fees depending on cards and promotions.
Loan insurance, sometimes called "payment protection insurance," is insurance that helps protect loan policy holders from defaulting the loan. It provides financial support due to disability, unemployment, or other debilitating factors that prevents the borrower from repaying the loan immediately.
A secured loan means there is some form of collateral (guarantee) made to the bank. Examples of collateral include your property, car, stock portfolio, gold assets, etc. The value of the collateral must exceed the loan amount. If you do not repay the loan as agreed, the bank has the right to seize the collateral.An unsecured loan does not require collateral. There is no guarantee beyond your signed loan agreement (which is a legally binding contract).In general, unsecured loans have a higher interest rate than secured loans.
The minimum payment is a sum that you will have to pay each month in order to avoid getting a bad credit score. It is calculated according to your outstanding balance, and will appear in your monthly statement. Other factors that will affect your minimum payment are unpaid balances or any balances that exceed your credit limit.If you pay the minimum amount on your monthly bill, there will still be interest charged to any unpaid amount. This will be carried on to your next statement. However, if you fail to pay the minimum fee, a late payment fee will be charged to you, on top of the interest on the outstanding balance.
You can use a personal instalment loan for needs that other loan types cannot cover. Examples include paying for weddings, renovations, and medical costs not covered by insurance.Some people prefer taking out a personal instalment loan instead of using a credit card because the fixed monthly repayments are easier to plan for.For other purposes such as paying for cars, education fees, housing, it is usually cheaper to use a loan specific for that purpose. Ask your bank about car loans, education loans, home loans, et cetera. It is advised to only use personal loans when you cannot find a loan that matches your needs.

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