Disadvantages Of Personal Loan

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Not having enough money to spend is a feeling most of us are familiar with and many are probably quite used to this reality. But what happens when emergencies arise and you truly are strapped? Personal loans offer fast cash solutions to help you fund your plans in the short term.

They do however come in an assortment of versions which can be perplexing if you haven’t applied for one before, so here’s an introduction to help you understand what personal loans are and the different types available in Malaysia.

What is a Personal Loan?
You can think of a personal loan as a method of financing that has the following features:
1) Shorter repayment tenure than other loans, typically 1 to 10 years;
2) on average loans out lesser money than a mortgage but with higher interest;
3) can be used to fund anything as it is in cash form, unlike a credit card.

Personal loans are attractively advertised as a viable way to plug cash flow leaks. Although, interest rates of 10-13% are the norm; you could get a lower rate depending on the risk factors connected to your application. Credit history of the borrower, loan amount, loan tenure as well as the industry the borrower works in will be considered when calculating the interest rate to offer.

Many institutions now offer personal loans to low-income individuals (albeit at much higher interest rates), special rates for GLC or government employees as well as ultra-quick approvals.

Note that you may apply for loans as little as RM1, 000 to

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