Many people use personal loans for major life purposes, which can vary from individual to individual. Are you thinking of applying for a personal loan? If yes, there are a few important items to consider carefully regardless of what your purpose is. As all of us know, personal loan is a very convenient and good way to obtain cash for any reasons. You should take note and must not neglect on the terms and conditions when you decide to apply for a personal loan. One good thing about personal loan is that the product seems to be similar. In other words, personal loans seldom have big differences from bank to bank although there are still slight difference that require your attention.
You can turn any personal loans to be used for personal purpose like traveling. Simply said, you can use it for anything that you desire. However, you need to know well on a few points in relate to personal loans in Malaysia before you can happily go for your holiday. Generally, personal loans in Malaysia have higher interest rates, which is highly dependent on your credit score. Also, collateral is not a requirement. So, there is not a need for you to promise the bank any of your car or house in case you are not able to make payments. As for the repayment term, you have a relatively short one, about 6 months to 5 years.
With a personal loan, you can pay for a vacation abroad. As mentioned, different people have different purpose in life. Some may consider traveling abroad before dying is a major goal in life. The costs of a holiday abroad can vary depending on the destination chosen. Simply said, jetsetting yourself across Europe for your holiday of course will cost you more as compared to traveling across Southeast Asia. This is why certain people will opt for a personal loan for a good holiday. To pin point once again, you must be aware of the consequences after applying for a personal loan.
First of all, do you think it is necessary for you to apply for a personal loan for a holiday? If this is really one of your life goal and wish to proceed, please bear in mind that any personal loans come with a few fees, charges and some high interest rates. For certain personal loans offered, the loans are only granted to customers with a fixed deposit, investment fund, unit trust or some other account. At certain times, this is not a pre-requisite for approval of a personal loan but one way to get a loan with lower interest rate. For most of the people who apply for a personal loan, bear in mind that not all loan tenures are likely to be just one year. Therefore, it is advisable to consider carefully on how much interest that you need to pay for the loan for a whole duration. The loan tenures of personal loan can be up to ten years while most loans to those who are in non-government sectors are given loan tenures up to 7-8 years. Anyhow, the level of interest paid for a 6 year loan can be very high already. For example, a 9% interest of a loan amount of RM10000 with a 6 years tenure would require you to pay up to RM5400 (total interest paid).
Not only you need to think about your holiday vacation but also the amount you afford to repay every month. Based on the interest rate as shown previously, it is highly advisable to repay your loan as quick as possible in order to avoid paying higher interest rate. However, if you are only capable to repay the minimum amount, it is inevitable to choose for the longer repayment tenure. On top of that, there are other charges incurred such as the processing fee, stamp duty, early termination fee, late payment penalty fee and insurance fees.