How annual, monthly, daily and flat rates compare, why a flat rate costs more than it sounds, and how to work out a loan's real cost in RM.
4 guides, about 36 minutes of reading
The same loan can be quoted as an annual rate, a monthly rate, a daily rate or a flat rate, and each one makes the cost look different. These guides show how the rates convert into each other, and why a flat rate charged on the original amount costs close to double its headline figure once you put it on a reducing balance.
You'll also see how to compare offers like for like: banks against licensed moneylenders, Islamic financing against a conventional loan, and short lump-sum loans against monthly instalments. Every guide works through the cost in RM, so you can check the total you'd repay rather than just the rate.
Many Malaysians prefer Shariah-compliant financing. This guide explains, in plain terms, how Islamic personal financing generally works in Malaysia, how it differs from a conventional interest-based loan like ours, how to compare the cost fairly with a worked RM example, and where to go if Shariah compliance matters to you.
Banks usually offer the lowest rates to borrowers with strong credit and payslips, but their criteria are stricter. Licensed moneylenders can suit people banks decline, or who need a smaller or shorter loan. This guide compares the two honestly, with worked RM examples, a decision checklist and how to spot an illegal lender.
Many Malaysian lenders quote a flat rate because it looks small. But a flat rate charges interest on the full original amount for the whole term, even after you have repaid most of it. This guide shows, with worked RM examples, how to turn a flat rate into the effective annual rate on a reducing balance, gives you a quick rule of thumb and a conversion table, compares real offers side by side (including when ours is not the cheapest), and explains what to ask before you sign.
Annual rates, monthly rates, daily rates and flat rates can make the same loan look very different. This guide shows how they convert, why a flat rate costs more than it looks, and how to compare loans on a like-for-like basis before you borrow.
The words that come up most in these guides. Each one opens the full explanation in our glossary.
Put what you've read to work with your own numbers, or check the details that apply to your loan.
Personal and SME Business Loans are repaid in equal monthly instalments on a reducing balance. For each instalment, interest = outstanding balance × annual rate ÷ 12, rounded to the sen, and the rest of the instalment repays principal. For example, RM 10,000 over 12 months at 4.9% p.a. is RM 855.62 a month: in month 1, RM 40.83 is interest (RM 10,000 × 4.9% ÷ 12) and RM 814.79 is principal, and RM 267.40 of interest is paid in total. The last instalment clears the balance exactly. Interest is worked out by the day (annual rate ÷ 360 × days) in two cases only: Short-term Loans, where RM 2,000 for 30 days at 4.9% p.a. costs RM 8.17, and when you settle or prepay between due dates, for the days since your last due date.
No. There are no processing, service, admin or membership fees, and nothing is deducted from the amount you receive. All our rates stay well within the 18% p.a. legal cap for unsecured loans. Late payment charges, if any, are set out in your loan agreement.
Our rates are annual rates on a reducing balance, so you're only charged interest on what you still owe. A flat rate charges interest on the full original amount for the whole term, so the same number costs much more. For example, RM 10,000 at 10% flat over 12 months is RM 1,000 of interest, about 17.97% p.a. on a reducing balance, compared with RM 267.40 at our 4.9% p.a. Some low flat rates can still be competitive, so convert before comparing: use the Flat rate converter under Calculators.
Work out your monthly repayment first with our calculator. Your adviser confirms your rate before you sign, and applying doesn't commit you to borrow.
