Week 3. Getting a Personal Loan To Invest.
For those who are very sure on certain business venture or investment, you may want to consider getting a loan personal loan to finance such venture. The ground rule is that the nominal annual interest rate must be less than 10%.
For example, if the nominal interest rate is 10%, if you put RM100 in the bank on 1st Jan 2010, by 1st Jan 2011, the interest should be RM10.
You can check out the definition of interest rate at
The inflation rate is not factored in because it differ country to country, product to product etc. There are just too many factors to consider.
Many banks are offering personal loan at special interest rate.
If the interest rate is 10% flat, you must multiple them with 1.8 (rough figure only. Actual value may varies from 1.6 – 1.9) thus, the nominal interest 18%. Thus it is not worthwhile. If you can receive a nominal interest rate of 18% then you don’t have to work already. It is better than most of the things in world today.
The only worthwhile personal loan for precious metal investment is Bank Rakyat and Bank Islam Personal loan. If the flat interest rate is more than 5%, then no need to considerlah because there are some additional charges involved. However, the loan is only open to government staff and GLC related company such as Tenaga, Telekom etc. For GLC related company, the salary deduction is done via BIRO ANGKASA. The staff must be working with the company for more than 6 months. If your company allows salary deduction via BIRO ANGKASA then most likely you may be able to get the loan. Just drop by your Human Resource Department and ask. OK.
I also consulted few of my Malay friends and the internet forum. Apparently, bank Islam has a bad reputation in certain Internet forum. For Bank Islam, if you leave the government or GLC while serving the loan, Bank Islam will raise the interest rate to non-government interest rate which is much higher by at least 2.5 – 4% nominal interest rate. For Bank Rakyat, I was told there is no such issue. Thus, you may want to get a Bank Rakyat personal loan before you resign. Thus, I stick with Bank Rakyat. Choose the maximum loan amount you can get for 3 years.
My choice will be 3 years personal loan from Bank Rakyat.
| Tenure | Member | Non-Member |
| 1 – 3 | 3.25 | 3.3 |
| 3 – 5 | 4.25 | 4.3 |
| 6 – 7 | 4.75 | 4.8 |
| 8 – 15 | 4.85 | 4.9 |
Note: Some GLC has a restriction on the amount of loan allowable to their staff. For government staff it is 75% of their nett salary (after deduction of all expenses). For some GLC, the limit is 40%.
On top of that, there are additional compulsory expenses upon approval of the loan. Let assume you take a RM100,000 /=loan for 3 years at 3.3% flat rate.
Your monthly repayment is RM3052.78 for 36 months
a) RM4/- stamp duty for each RM1000/- loan. Thus, if you take a RM100,000/- loan the stamp duty will be RM400/-
b) Takaful Insurance coverage for the loan amount payable to Bank Rakyat. For RM100,000/- loan for 3 years for age 30 may cost about RM600.00 (estimation only). That why no need guarantor.
c) 2 months pre-pay deposit.
d) RM12 for ATM card.
e) RM100 petrol toll etc.
All these are deducted from the RM100,000/- loan amount. Thus, you only getting
| Loan Amount | $100,000.00 |
| Stamp Duty | $400.00 |
| Takaful | $600.00 |
| 2 month deposit | $6105.56 |
| ATM card | $12.00 |
| Etc expenses | $100.00 |
| Nett Loan Amount | $92,782.44 |
RM92,784.22 loan disbursed repay via 34 months installment of RM3052.78. What is the nominal interest rate?
According to my calculation the nominal interest rate it is 7.78%
It is double the initial advertised value of 3.3%.
Then if the interest rate is 5.5% then the nominal interest rate may come up to 11-12%, thus, it is better to go for Ar-Rahnu pawn-broking scheme which can be terminated any time when the cash is available.
If you wish to terminate the loan, I was told that you can only get back the remaining portion of the interest. Stamp Duty and Takaful is gone. However there is no black and white on these. Even a copy of the loan agreement was not given to the applicant.
Note: Upon close termination of the loan agreement, either you resign just in time for your last installment or make sure you contact BIRO ANGKASA so that no over-deduction is done. I’m not sure on how the reimbursement work in case of over-deduction and the time-frame involved. Hopefully someone can enlighten me on these.
Lesson learned
Think hard before you seek for any refinancing. Do you own calculation? If not in the end all your rewards goes to the bank. You are just a debt salves.
Jangan membabi buta saja. Nanti, you kerja sia-sia saja. Kerja percuma untuk bank.
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