There are many loans available in Malaysia, and personal loan in one of the most convenient and most applied for loan available. Personal loans in Malaysia are often applied and approved within a short amount of time. Personal loans are disbursed in cash, unlike car and housing loans. You can do whatever you desire with the cash money received, whether for wedding expenses, vacations or studying abroad, spend as you wish. So, here are several things you should be mindful when applying for a personal loan.


Personal loan follows the flat interest rate methods. Unlike other loans more commonly with reducing balance method, the effective interest rate for personal loans are usually 1.7 to 1.9x of the stated interest rate. So in total sum, the effective rate over a 5 year period, is actually 15.39%.

Loan Amount

Personal loans in Malaysia are very flexible in total loan amount, averaging from RM 2,000 to as much as RM 200,000 depending on eligibility and other forms of requirements. You can also opt for a joint name personal loan, with a combined earning power you are allowed for a larger personal loan amount.

Collateral vs Un-collateralized

In most cases to help reduce the risk of lender, a loan usually calls for a collateral such as house and cars, or a guarantor, which is also called secured loan. On the other hand, personal loan that requires no collateral is known as unsecured loan. Unsecured loan due to its riskier nature, the interest imposed are usually higher. Most banks in Malaysia are of the unsecured type and hence do not require collateral.

Government Employees and GLCs

If you happen to be a government staff, or as an employee in a government linked company, you are too eligible to apply for personal loans. However, these loans are different than the conventional ones, with a different interest rate as well as repayment methods. These personal loans for government servants typically offer a better interest rate, but will require you to consent a monthly salary deduction via Angkasa for loan repayment.


Personal loans for Malaysia can offer short term financial aid with huge flexibility. However, you must be well informed on the interest rate, and the commitment of repayment. Even though it is easy to get, one should be wary to not take on extra debts for easy reasons.