Tips for Finding Cheap Lodging When Travelling Overseas

Frugal travellers know to leave no stone unturned and use every advantage available to find cheap flights or travel methods. But another aspect of overseas vacations that budget travellers need to keep in mind is cheap lodging.

How do we look for them? Where can we find them? Are there some neat tips and tricks to follow when on the lookout? Of course there are. Let’s go through them together!

1. Do Your Homework

Frequent travellers know that accommodations’ rates fluctuate based on the real-time demand of tourists. For instance, if there’s a sudden surge of a destination’s popularity, due to an increasing number of people booking at the same period, the room rates can be significantly more expensive. To get a broad overview of the offers from different hotels, it is best to browse through the listings on various sources.

Some of the popular hotels search sites, whereas you can also book the hotel and flights bundle to save money, include:
Skyscanner
,
Traveloka
,
Agoda
,
Expedia
 and
AirAsia Go
 (only for Air Asia flights).

A rule of thumb is to book in advance if your trip falls into the peak seasons such as summer and year-end holidays. Try to avoid over-crowded destinations and wait until they become less popular.

2. Be Flexible

Don’t restrict yourself just to hotels, though. Budget accommodation is not limited to just that. An ideal place to stay is one that fits with your travel needs. For example, if you travel in a big group, a private hotel room is in fact more saving as you will get to divide the cost among more people.

Another facet of being flexible also means being okay with perhaps a lower standard of amenities at the place you’ll be staying. Remember: you’re on vacation to experience the sights and sounds, not to stay in your room forever.

Depending on where you travel, there might be different alternatives too, such as camping in your own tent or staying overnight at a 24/7 public bath (jimjilbang in Korea). The most important thing to keep in mind is to be flexible when it comes to choosing your accommodation.

3. Make Use Of Your Credit Cards

This is really a no-brainer for any frequent traveller. While people commonly optimize travel credit cards for AirMiles redemption, many of us overlook the hotel promotions that are offered when we pay with our cards.

Some banks feature awesome cash rebates or exclusive discounts on bookings made on travel websites such as Booking.com or Agoda. Remember to check the benefits of your credit cards to know which booking site would make more sense to you and your wallet.

Head over to our
travel credit cards
 comparison page to find out more about the excellent deals that will make your dream holiday come true!

4. Explore The World From The Comfort Of Someone’s Home

If you are an avid traveller, chances are you have already heard of homestay rentals sites like
AirBnB
 and
Roomorama
. And they are still amongst the best types of budget accommodation as they offer a perfect blend of the comfort of a hotel room at the price of a hostel.

Couchsurfing
 is also another awesome alternative. Make sure that you create an account now to join this global community of globe trotters. Although all that you may get is simply a couch to stay the night, it’s definitely one of the cheapest options and allows you to truly live like a local when travelling, allowing yourself a full cultural immersion (if you’re into that).

At the end of the day, travelling is all about seeking the unknowns and learning about different cultures. So don’t get overwhelmed with pre-trip planning phase and forget to discover the actual wonders that await, especially when it comes to choosing your accommodation overseas. We hope our tips help.

While you are looking for affordable lodging, head to our
Travel Getaway Campaign
 for ways to enhance your travel experience!

Do you have anything to add to this article? Do share your thoughts with us in the comments section down below!

Image credits: LHOON’s
photostream
 and Barnacle Budget Accommodation’s
photostream

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Economist: Youths Trapped In Debt Due To Unemployment, Low Wages

(Image: Malay Mail/Choo Choy May)

Economist Geoffrey Williams has said that young Malaysians are falling into bankruptcy due to two key reasons: unemployment and low pay. This is based on the data revealed in two studies released last year, namely the Labour Market Review Q4 2022 and the Salaries & Wages Survey Report 2022.

Williams – who is also a professor at the Malaysia University of Science and Technology – said that both studies showed that the total unemployment rate for young adults aged between 25 to 34 stood at 32%. Additionally, these individuals earned an average income of RM2,053, with some earning even less than RM2,000 – which is far below the living wage proposed for Malaysians.

For context, Bank Negara Malaysia (BNM) had previously stated that the
living wage is set at RM2,700
 for an unmarried adult based in urban areas, as of 2018. Meanwhile, the living wage for a couple without children and with two children is set at RM4,500 and RM6,500, respectively.

Given the developments since then, and taking into account inflation, Williams suggested that the living wage for an individual based in Kuala Lumpur in 2023 should now be increased to RM3,089. Similarly, the rate for couples should also be marked at a higher RM5,149.

“High debts accumulate due to low income and unemployment. This is not just a problem for young people, but also for families with low incomes. This means young people have to take jobs with low wages to support their families,” said Williams, adding that these groups will also likely resort to bank loans to support their needs.

Additionally, Williams highlighted the plight of university and college graduates, stating that many of they are pushed deeper into debt because of their inability to repay their loans due to low wages.

Meanwhile, professor at the Faculty of Business and Economics of Universiti Malaya, Nazari Ismail believes that in many cases, youths’ fixation with a lavish lifestyle and the tendency to live beyond their means are key factors to blame for their increasing debts. “Such values are wrong, where people view owning luxury cars and houses, and going on expensive holidays as the ultimate signs of success,” he said.

Ismail also noted that youths often fall into this trap as they are influenced by politicians and business people. He further emphasised that a new set of values needs to be developed, where youths active view being in debt as something to be avoided.

(Source:
Free Malaysia Today
)

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RinggitPlus Birthday Campaign 2019 FAQ

Q: What is the RinggitPlus Birthday Campaign?

RinggitPlus is turning seven years old! To celebrate our birthday, we want to reward new credit card and personal loan/financing applications via RinggitPlus with our participating banks. Approved applications will receive a RinggitPlus Birthday gift.

Q: Which banks are part of the RinggitPlus Birthday Campaign?

HSBC, Standard Chartered Bank, and RHB.

Q: What is the Birthday Campaign sign-up gift?

The sign-up gift for the RinggitPlus Birthday Campaign is a
Poh Kong Pure Gold Bar 999.9 (1G).

Approved applicants who meet the Campaign criteria and also happen to be born in the month of August or September will get an additional
Mystery Gift
 on top of the provided Campaign Gift! The selection of the Mystery Gift is at the discretion of the organiser.

Q: If I apply for more than one credit card or personal loan/financing, can I get multiple sign-up gifts?

Yes, you can get more than one campaign gift if you successfully apply from different banks. However, if you are applying for multiple credit cards or personal loans/financing from the same bank, you will only receive one sign-up gift.

Q: I already have a credit card or personal loan/financing with one of the banks. Am I still eligible for the gift if I apply for another card with the same bank during this campaign?

If the bank approves your personal loan/financing that you have applied for through RinggitPlus, you can still get the Birthday Campaign gift. You will not be eligible if you already have a credit card with the bank you are applying from.

Q: How do I apply?

It’s really simple. Just apply for a qualifying credit card or personal loan/financing (as stated on the individual banks’ T&C) on
ringgitplus.com
 during the Campaign Period (20 August 2019 – 19 September 2019).

Q: How long is the approval process?

Each bank has different processing timelines for different products, and thus it is at the bank’s discretion. Customers will be notified by the bank once the bank has started processing their applications.

Q: How and when can I get the Birthday Campaign gift?

Once the bank has notified RinggitPlus of the card activation or loan disbursement, RinggitPlus will provide you with a redemption code for your gift within 28 working days. Use the redemption code to claim your gift on the RinggitPlus gift claim page and we will send you your gift within 28 working days from your claim date.

The banks will notify RinggitPlus once the following has taken place:

Product

Eligibility for gift

HSBC credit card

With minimum spend of RM1,000 within 60 days of card approval

Standard Chartered credit card

Upon activation of card

RHB credit card

Upon activation of card

RHB personal loan/financing

Upon approval and disbursement of personal loan/financing

Q: If my application is rejected, am I still eligible to get the gift?

No. Only applications which have been approved by the banks are eligible to get the gift.

Q: How long will this promotion be available?

The RinggitPlus Birthday Campaign will run from 20 August 2019 to 19 September 2019.

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PLUS Will Reduce Toll Charges By 18%, No Toll Hikes Until 2058

(Image: Malay Mail)

The government has called for PLUS to reduce its toll charges by 18%, starting from as early as 1 February 2020. Even better, PLUS has also been requested to refrain from implementing toll hikes until 2058.

These changes would affect the following expressways:

North-South Expressway (NSE)

New Klang Valley Expressway (NKVE)

North-South Expressway Central Link (ELITE)

Malaysia-Singapore Second Link (LINKEDUA)

East Coast Expressway Phase 2 (LPT2)

Seremban-Port Dickson Highway (SPDH)

Butterworth-Kulim Expressway (BKE)

Penang Bridge

(Image: New Straits Times)

This follows the government’s decision to abstain from selling PLUS Malaysia Bhd, the country’s largest highway concessionaire, to any bidders after a period of mulling over the matter. Instead, PLUS Malaysia’s concessions will be extended by 20 years to ensure that the concessionaire will be able to operate and maintain its highways independently, without relying on assistance from the government.

To allay the public’s concerns about the trade-off between the toll price reduction and the extended concessions, Prime Minister Dr Mahathir Mohamad said that the people need not worry as the new toll charges will be low after taking into account the future value of money.

(Image: lowyat.NET)

“They (PLUS) have to reduce the toll rate by 18%, but remember, this is 18% off today’s rates. That means in 20 years’ time, the toll charges when compared with the ringgit then will not be very high,” said Dr Mahathir.

“Traffic will increase, but the value and purchasing power of the ringgit will go down (because of inflation), so what they (PLUS) earn afterwards (over the concession period) is not as big as people think,” he added.

PLUS Malaysia Bhd is co-owned by the Khazanah Nasional, via its subsidiary UEM Group Bhd, and the Employees Provident Fund (EPF). It operates its eight highways under five concessions, and has recently begun adopting the
Radio Frequency Identification (RFID) technology
 for
selected toll plazas
.

(Source:
The Star
,
Lowyat.NET
)

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About THE AUTHOR

Alex Cheong Pui Yin

Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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Installment Payment Plans: Your Card’s Most Underrated Superpower

Plenty of financial management tips involve saving money and making sure we don’t go over budget when spending on things. In fact, tips for cutting down on expenses often include where to go to find the best deals, how to compare prices, where to get discounts, and are generally about shaving off the amount we have to pay for the things we want.

But that’s not the only way that we can manage our expenses. Sometimes, we don’t even need to wait for discounts or a sale to get what we want. Especially if we can use the Installment Payment Plan service on our credit card.

What Exactly is an Installment Payment Plan?

An Installment Payment Plan allows you the luxury of spreading the cost of your purchases over a few months or years at either very low or sometimes 0% interest. Installment Payment Plans are usually offered by most banks’ credit cards with repayment periods typically ranging between 3 to 36 months.

This allows you to buy and enjoy things with a swipe of your credit card and repay the amount by installments – meaning you will never have to worry about settling the full amount owed at the end of the month. Just pay the smaller amount you owe every month instead.

How Does This Work?

Let’s take a look at an example:

Linda wants to buy a new laptop for herself which will cost her RM5,000 – which is a little too much for her at the moment to pay in one lump sum. But she still insists on it since she needs it for work. She has several payment options at her disposal:

Cash or Debit Card.
 If she makes the purchase using cash or debit card, she will definitely get the laptop, but a whopping RM5,000 will be deducted from her account instantly.

Installment Payment Plan with Credit Card.
 Making the purchase by committing to a 0% Installment Payment Plan with an 18-month tenure, will lead to her repayment being spread over the 18-month period and Linda will only need to pay RM5,000 over 18 months =
RM277.78
 monthly. That’s just
5.5%
 of the total cost. That’s 94.5% less than the full price you would have to pay right away without an Installment Payment Plan.

This service shows that you don’t always have to be bargain-hunting and coupon-cutting to pay for the best of what you want. Simply spread out your payments at zero interest and swipe for what you’ve always wanted. What’s more, this service is quite common in credit cards, so you don’t even have to dig around or jump through hoops to get this done. It’s truly one of the most underrated services of modern credit cards.

Go For What You Want

Installment Payment Plans also typically come with a minimum spend which you should take full advantage of. Since it doesn’t really make sense to split a RM200 purchase into a year’s worth of payments, go for that lofty purchase, maybe RM500 and up, and see how much you could stretch your ringgit when you convert your spending to Installment Payment Plans.

If you’re looking to start swiping for that thing you thought you had to save way too much money for, grab a Hong Leong Mastercard® Credit Card which has an Installment Payment Plan service right now and see how affordable your desires truly are with Hong Leong Bank’s
#HelloHappy campaign
! Worry less and swipe more with Hong Leong Mastercard® Credit Cards!

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Manage Your Debts Better with These Mobile Apps

Your smartphone can help you out with your debt management quite a bit, if you don’t already know. In fact, there are apps out there specifically made to help people deal with their debt, budget, and financial management. In this piece, we share with you a robust selection of apps (available for both Android and iOS) which you can use to get rid of your debt and get your finances back in shape!

AKPK Budget Calculator

While AKPK (Malaysia’s Credit Counseling and Management Agency) has a reputation for being the last resort for those at the end of their rope, we don’t think that’s a fair sentiment to carry. Everyone can use advice when it come to handling credit, so what better place to turn to than an agency dedicated exclusively to that?

On their site (accessible via any mobile browser) you can find
a handy budget calculator
 that can help you determine how much debt you’re in and what you have to work with. You don’t even need a smartphone for this one, so for those too skittish to download new apps, you can try this out to quickly get a feel for how much an app can help you.

To Clear Your Debts

For those of you completely comfortable with installing apps already, you should know that a budget calculator is just the tip of the iceberg. Check out
Debt Payoff Planner
 for iOS and Android for example. Input your income, expenses, and debts, and the app can let you know exactly how much to pay on each debt every month. You can track all your debts with a clean summary and even see on what date you’ll be debt-free.

Another app that can help you keep track is called
IOU (ioutool.net)
 and it’s plenty simple to use. Since it’s more for tracking the little debts you have with your friend or family, it’s not all that fully-featured. Which means it’s great for those who keep forgetting who they owe or who owes them money. Use these two apps to clear out the little tiny debts and organise your larger commitments, too.

Read Also:

Find Out When Android Apps Become Cheap or Free with AppSales

To Manage Your Budget

Now that you know how much you owe and how much people owe you, it’s time to adjust your budget so you can properly allocate your cashflow to the necessary channels.
Dollarbird
 is an app for both Android and iOS that can put your expenses into a calendar format so you can clearly see what you will owe and when you owe it. This helps you plan your expenses days ahead. It even comes with a neat visual summary of your cashflow for you to look through and analyse to see where you can make improvements.

Fudget
 is another app for both iOS and Android that can help you manage your budget. A lot quicker and simpler than Dollarbird, this one is more for those who’d rather see things in a list form and plan it out that way instead of looking at a calendar. Both these apps are free and can drastically improve how you work with your money, and subsequently, how you handle your debts.

To Remind Yourself to Be Vigilant

After having some apps tell you how much debt you owe and how to budget for them, you would do well to have an app that reminds you of these too. Changing your spending habits is as hard as changing your diet. Without encouragement, reminders, and plenty of motivation, you may fall off the wagon sooner than you think.

Habit tracker apps like
Habitbull
 can help you set reminders and notifications for you to get yourself back on track with your spending on days when your old habits threaten to creep back into your life. Set non-spending goals, saving goals, or debt-repayment goals and the app will remind you of them periodically on either your iOS or your Android device.

Another way to simplify your debt management is to
consolidate them under one personal loan
. Doing this can make it a lot easier on your wallet as long as you get a loan with a lower interest rate overall. Check out our
comparisons page to see which personal loan
 can be the best for you to use for this purpose.

Have anything to add to this article? Share your thoughts and ideas with us in the comments section down below!

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CGS-CIMB: Retail Investors Are Shifting From Stock Markets To Safer Investments

(Image: Bernama)

A survey by CGS-CIMB Research has found that retail investors are now beginning to move away from stock markets to other safer investment products, thereby tempering the bullishness of the stock market that had grown since 2020. This was revealed in its Retail Investors’ Sentiment Survey (Second Edition), which polled a total of 1,044 participants between April and May 2021.

According to the survey, only 49% of its respondents chose direct investment in the domestic stock market as their first choice of investment. This is slightly lower compared to the figure recorded in last year’s survey, where
52% of its respondents preferred to invest directly in the local stock market
.

The latest Retail Investors’ Sentiment Survey also showed that 13.5% of its participants preferred to invest via Amanah Saham Nasional (ASB) or the Employees Provident Fund (EPF). Meanwhile, investment via domestic unit trusts and direct investment in overseas stock markets both clocked in 8.4% each.

Aside from that, 8% of the survey participants also opted for investment via robo-advisers, whereas 5.8% said they preferred to invest in a unit trust that has overseas market exposure. The remaining 6.8%, on the other hand, noted that they had other preferred investment instruments (undisclosed).

“This helps explain the slight drop in retail participation in the daily trades of the Malaysian stock exchange. This could also be due to the reopening of the economy or retail investors are shifting to less volatile investment products for exposure to the stock market via the EPF and ASB where the downside risks are better protected,” explained CGS-CIMB.

In 2020, Malaysia’s domestic stock market saw a
significant increase
 in the participation of domestic retail investors, particularly among millennial retail investors. This was driven primarily by the convenience of online broking and a low-interest-rate environment. The bullish sentiment continued to persist even
during the first quarter of 2021 (Q121)
, with an average retail participation of 39.3% and a retail average daily trading volume (ADTV) of RM1.99 billion alongside net buys of RM5.36 billion. The daily trade shares began to lag slightly soon after, with May 2021 recording a participation rate of 38.2%.

CGS-CIMB also noted that robo-advisors are gradually growing more popular as a vehicle to gain immediate exposure to the stock market. This could be attributed to the ease of accessibility provided by these instruments.

Aside from shedding light on the changing investment preference among Malaysian investors, CGS-CIMB’s Retail Investors’ Sentiment Survey also polled its participants on various other aspects. These include their sources of funds for investment, expected rate of return for selected investments, as well as major concerns in investing.

You can find out more about the
CGS-CIMB’s latest Retail Investors Sentiment Survey
 here.

(Sources:
The Star
,
The Malaysian Reserve
)

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Alex Cheong Pui Yin

Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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No Tax Hikes For Those Earning Above RM1 Million As Their Rates Are “Sufficiently High”

(Image: Malay Mail/Firdaus Latif)

Treasury secretary-general Datuk Johan Mahmood Merican has come forward to explain why the government’s recent proposal to increase income tax rates only involved selected income brackets of the T20 group – specifically those with annual earnings of up to RM1 million – and not those who earn beyond the amount. This is as those who are earning more than RM1 million per year are already paying a “sufficiently high” tax rate of 28% and 30%, he said.

During the post-budget debate hosted by the Malaysian Economic Association, Datuk Johan also reminded that Malaysia employs a progressive income tax system instead of a flat rate system. This essentially means that any changes made to the tax rate of a specific income bracket (such as an increase or a reduction) will also impact all the subsequent brackets.

“By adjusting the tax rates up to RM1 million, all taxpayers earning more than that will also end up paying a higher tax rate,” said Datuk Johan, adding that the government decided to implement the tax rate hike starting from the income level of RM100,001 because it means only about 150,000 individuals in Malaysia will be experiencing a tax increase.

(Image: Malay Mail/Choo Choy May)

“Even though when you look at it, it looks like the tax rate increases from RM100,000 above, really, you need to achieve about RM230,000 taxable income after reducing from all the reliefs before you start paying the higher taxes. So we’re talking about people who earn RM20,000 a month. It’s only about 1% of our labour force, so we’re not even talking about T20, we’re talking about T1. Are we saying that even 1% is too many people to pay more taxes?” Datuk Johan further stressed.

Additionally, Datuk Johan emphasised that this proposed arrangement reflects Prime Minister Datuk Seri Anwar Ibrahim’s view, where the government should not be held singularly responsible for helping those in need. Instead, those who are more fortunate and better off financially should also pitch in to contribute to the poor.

During the re-tabling of Budget 2023 last Friday, Datuk Seri Anwar had proposed some changes to Malaysia’s existing income tax rates, which include
reducing the tax rate for the M40 group
 (annual income from RM35,000 to RM100,000) by 2%. Additionally, the tax rates for selected income brackets under the T20 group (annual income from RM100,001 to RM1 million) will be
increased by 0.5% to 2%.
 Finally, the tax rates for individuals earning between RM1,000,001 to RM2 million, and more than RM2 million per year will remain unchanged at 28% and 30%, respectively.

(Source:
Malay Mail
)

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About THE AUTHOR

Alex Cheong Pui Yin

Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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Shopee Removes Option To Choose Preferred Courier Service From 17 June Onwards

Starting from 17 June 2021, Shopee will roll out a new logistics policy where customers are no longer able to opt for a preferred courier service when they make their purchases on the e-commerce platform. Instead, they will only be allowed to decide whether they want their items to be delivered via Standard, Economy, or Other channels.

At present, users who buy from Shopee are given the flexibility to select their preferred courier service provider when they arrive at the checkout page. Courier options that are available include J&T Express, Ninja Van, and Poslaju; customers can compare the prices charged by each provider and their expected delivery period before deciding.

Once Shopee implements its new policy, however, you will only be able to choose from three shipping options – Standard Delivery, Economy Delivery, and Other – depending on where your parcels are coming from.

Shopee, meanwhile, will decide on your behalf the courier service provider that is best suited to deliver your parcel, as well as the shipping rate that you need to pay. According to the e-commerce platform, they will select from the following service providers for each shipping option:

Shopee justified its updated delivery options by saying that this will help merchants to optimise their deliveries as all parcels will be allocated equally to each courier service provider, thereby avoiding any sort of backlogs for a specific courier service. At the same time, it provides better customer satisfaction by reducing the risk of late shipments and by offering lower delivery charges – as low as RM2 – for shipping options.

You can find out more about
Shopee’s updated logistic services
 on its official website.

(Sources:
Shopee
,
Amanz
)

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Alex Cheong Pui Yin

Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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    fztt

    2 years ago

More like trying to level the playing field for their shopee express which is one of the slowest, so far they have assigned parcels to anyone but the fastest one in my location, the average delivery time used to be max 3 days for local, now pick-up from seller itself takes 1-2 days longer, nevermind actual delivery.

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    Ivvan

    2 years ago

Seriously i got fed up with shopee express.. just let us choose our own courier services, we know better which is best for my location.

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    Fedup

    1 month ago

    Reply to

        Ivvan

Very true. Shopee seems to have a strong liking to use JnT but JnT in my area sucks. They sent all my items in one go to the wrong people wrong address and declared it sent! So will Shopee and JnT hold resposibility for this? Clearly not. Shopee cut off the option to choose courier and JnT keep sending the parcels to wrong address. What is the use of Shopee then? Am I supposed to throw my money at Shopee to help regularly “gifted” some dishonest thieves through their sidekick JnT? What a joke. I’m moving away from this useless
…
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0

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Malaysians Can Win Millions Of Ringgit Worth Of Prizes Just By Using DuitNow

PayNet will be running a contest from now until 31 May as a campaign to encourage Malaysians to use DuitNow to send money. Malaysians can win some truly amazing prizes during this five-month period, including a RM1mil home, RM1mil worth of cash prizes, a Mercedes-Benz GLC200 and Mercedes-Benz A200, five RM20,000 IKEA gift cards, and a Malaysia Airlines holiday package worth RM100,000.

DuitNow is a platform for transferring money between individuals instantly and simplifying the process of online bank transfers.
 This is because DuitNow replaces the complicated bank account numbers with easy-to-remember IDs such as mobile phone number, IC number, and business registration numbers. Users can send money 24/7 with DuitNow, by accessing the “Fund Transfer” or “Send Money” page from their respective banks’ mobile banking sites and mobile apps.

Users can participate in this contest just by sending money using DuitNow. If you haven’t registered, even the act of signing up for a DuitNow ID gives you entry points. Users earn entry points by performing funds transfers via DuitNow to a unique DuitNow ID every day, but duplicate transactions to the same DuitNow ID in the same day will not count. There is a detailed explanation of the contest mechanics at the
DuitNow FAQ
 page.

The contest will be running for approximately five months, from 8 January to 31 May, and the prizes will be staggered. Here’s what you stand to win:

RM100,000 Malaysia Airlines dream holiday from 8 January to 31 May (1 winner)

RM1mil cash prize from 5 February to 19 January (120 winners)

A Mercedes-Benz A200 from 8 January to 4 March (1 winner)

Five RM20,000 IKEA gift cards up for grabs from 8 January to 18 March (5 winners)

A Mercedes-Benz GLC200 from 8 January to 4 April (1 winner)

RM1mil property from a selection of IJM Land, Sime Darby Property, or Sp Setia from 8 January to 31 May (1 winner)

Selected winners will be contacted by their respective banks within three days after the winner selection. The winners list will also be posted on the
DuitNow
 website.

Peter Schiesser, PayNet Group’s Chief Executive Officer stated that DuitNow is working towards modernising Malaysia’s retail payments infrastructure and introduce innovative new services with the collaboration of PayNet and Malaysian banks.

(Source:
The Star
,
DuitNow
)

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Malaysia Bank Moratorium: Why You Should Opt For The 6-Month Deferment For ALL Loans (Updated)

EDITOR’S NOTE: This article refers to the 2020 loan moratorium, and the information here may be outdated. Please visit our
2021 Bank Loan Moratorium Guide
.

(
Update 6/5/2020 7.30pm:
Finance Minister Tengku Dato’ Sri Zafrul Abdul Aziz has announced that hire purchase agreements for both conventional and Shariah-compliant variants will not accrue interest during the moratorium interest. We have updated the article below to reflect this development.)

(
Update 30/4/2020 8pm
: To reflect BNM and ABM’s announcement to amend the moratorium for hire purchase and fixed-rate Islamic financing, we have removed our recommendation for both types of loans. We are in the midst of analysing the way banks are calculating interest on deferred instalments, and will publish our analysis and recommendations when they are complete.)

For many Malaysians, the announcement by Bank Negara Malaysia (BNM) of the
6-month automatic deferment of all loans
 was met with relief. At a time when job security is non-existent in Malaysia and across the globe, the decision to offer no penalties for not paying off a substantial monthly commitment is welcome news indeed.

That said, there remains quite a bit of confusion and misunderstanding on the matter. How exactly will the deferment change the terms of our current loans? Are we still
paying interest during the deferment period
? How significant is the announcement that banks are waiving compounding interest during the deferment period?

In this article, we will break down all aspects of the BNM deferment, and how it will affect any loans that we may have.

Hire Purchase Agreements

Hire purchase loans work on a flat interest rate, which means the interest rate is agreed upfront, and is charged on a fixed amount (in this case, the value of the loan) throughout the tenure.

(Updated 30/4/2020, 8pm)
 During the 6-month deferment period, there will be
no additional interest charged
. This is because the interest follows a flat rate basis, and since the principal sum does not increase, you will enjoy a true “payment holiday” with no implications from today until the end of September.

Note that this explanation applies only to flat-rate car loans (which is the most popular car loan in the country). For variable rate car loans, the calculations will follow a reducing balance interest charge – please refer to the mortgage loan explanation below.

(Updated 30/4/2020, 8pm)

Now that Bank Negara Malaysia (BNM) and the Association of Banks in Malaysia (ABM) have announced that
interest may now be charged to all hire purchase agreements
, those currently servicing these loans should review their car loans before deciding to opt in.

According to the ABM, Malaysians currently servicing hire purchase loans have two options at the end of the moratorium period:

Pay the accumulated 6 months’ deferred instalments together with their October 2020 instalment without being charged any additional interest; or

Continue the repayment of these instalments post-October 2020 through an extension of 6 months in repayment period after the original maturity date. In this case, interest based on the contractual rate will be charged on the amount of the deferred instalments that remains outstanding until these instalments are fully repaid, which should be by the end of the extended 6-month tenure.

Option 1 is straightforward – if you have the means to service the funds, it makes sense to take the deferment and put the funds away into a safe, high-interest savings account or investment and withdraw them after six months to earn some interest with minimal work.

On the other hand, Option 2 will see the introduction of interest charges during the moratorium period. The amount you pay highly depends on two factors: your monthly instalment amount, and the remaining tenure of your loan.

(Updated 6/5/2020, 7.30pm)
 The
stunning announcement from the Finance Minister
 today effectively reverses the changes announced on 30 April. Interest will no longer accrue for hire purchase agreements for both conventional and Shariah variants, with no further changes to their agreements with the exception of an additional six-month extension to the tenure. With that, we can safely and easily recommend taking up this deferment again, with the following explanation from above:

During the 6-month deferment period, there will be
no additional interest charged
. This is because the interest follows a flat rate basis, and since the principal sum does not increase, you will enjoy a true “payment holiday” with no implications from today until the end of September.

Note that this explanation applies only to flat-rate car loans (which is the most popular car loan in the country). For variable rate car loans, the calculations will follow a reducing balance interest charge – please refer to the mortgage loan explanation below.

Personal Loans/Financing

Just like hire purchase agreements, personal loans and personal financing follow a
flat-rate basis for the interest/profit rates
. This means that regardless of your outstanding balance, you will pay a fixed interest or profit rate where the total is set by you and the lender.
(Updated 30/4/2020, 8pm)

Therefore, there will be
no additional interest charged
 during the 6-month deferment period.

(Updated 30/4/2020, 8pm)
BNM and ABM’s announcement today covers only hire purchase agreements as well as
fixed-rate Islamic financing
. There is no mention of additional interest charges for conventional loans, so for now, it is safe to say that
conventional personal loans will have no additional interest charged.

For Islamic financing, the additional profit charges will be calculated the same way as hire purchase agreements.

While all banks offering personal loan or financing are covered under the BNM deferment programme, non-bank entities may still be offering their own assistance. Aeon Credit Service, for example, is offering a
one-month deferment for all existing personal loans and financing
, and like BNM’s initiative, it is an automatic deferment. For other lenders, please check with them if you would like to seek a deferment.

Mortgage Loans/Home Loans

Home loans or mortgages are where things can get very confusing – this is where the BNM 6-month deferment will affect Malaysians the most.

As most home loans charge interest on a reducing balance basis, interest is charged each month based on the total outstanding balance from the previous month. With the six-month deferment, BNM and all banks have stated that borrowers do not need to pay anything during this period – BUT interest will still accrue. We checked all banks’ as well as
BNM’s FAQ
 on this, and they all confirm that
interest will accrue during this period
.

What about the non-compounding interest? As of 31 March 2020,
all Malaysian banks as well as the HOUS foreign banks (HSBC, OCBC, UOB, and Standard Chartered)
 have all announced that they will not be compounding interest for the accumulated interest during the 6-month deferment period. It definitely sounds noble, but how much is this amount exactly?

To illustrate, let’s say you have just taken a conventional home loan with outstanding balance as of 31 March 2020 at RM500,000. Your home loan interest rate is 4% p.a. and monthly repayment is RM2,390.52. The table below shows how much interest that will accrue during the deferment period, both if it compounds and if it does not:

Month

Interest charge (non-compounding)

Interest charge (compounding)

Apr-20

RM1,666.67

RM1,666.67

May-20

RM1,666.67

RM1,672.22

Jun-20

RM1,666.67

RM1,677.80

Jul-20

RM1,666.67

RM1,683.39

Aug-20

RM1,666.67

RM1,689.00

Sep-20

RM1,666.67

RM1,694.63

Total

RM10,000.02

RM10,083.71

Difference

RM83.69

As you can see, despite what the banks are saying, the compounding interest charges that they are all waiving isn’t actually a very big sum (from an individual perspective).

But from a macroeconomic scale, this value quickly turns into a very, very big amount for the banks. Data from the
National Property Information Centre
 shows that between 2009 until 2018, there were over 2.3 million residential properties sold. Assuming all of these properties were sold via home loans, the value of the 6-month non-compounding interest could actually come up to hundreds of millions of Ringgit in potential revenue for the banks in Malaysia.

That being said, let’s not forget that banks are still
generating revenue from the accrued interest over the six months
. Depending on how you repay this accrued interest, you would still end up additionally
paying a minimum of six months’ worth of interest
 into your home loan. Note, also, that all banks are saying that they will not compound interest “during the deferment period” – none of the FAQs say that there will be no interest compounding from October 2020 onwards.

The exception to this is of course Islamic financing plans, where profit cannot be made from profit. This carries a huge implication, because with zero compounding of profit anywhere, you’ll effectively only be paying the accrued interest (i.e. RM10,000.02 from the example above) and nothing more.

What’s the best repayment option after the deferment programme?

With six months’ worth of interest to pay, it’s
how
 you pay it that will determine how much more you will end up paying. We found that in general, banks will offer three options of repaying this amount:

Pay the accrued interest in one lump sum in October 2020 in addition to your usual monthly repayment. Loan tenure and repayment amount remains unchanged.

Pay the same monthly repayment amount from October 2020 onwards, but the loan tenure will be extended to accommodate the additional interest payment.

Pay a higher monthly repayment from October 2020 onwards to accommodate the additional interest payment, but the loan tenure will not be changed.

The banks may have other options, but these three are the most common ones offered. You should check with your bank on your available options before opting in for the deferment just in case. Let’s break down how each of the three options above will affect you and your wallet in the long term.

In the explanations below we will continue to use the example of a RM500,000 outstanding conventional home loan at 4% interest p.a.

Option 1: Pay the accrued interest in one lump sum

This is the option where you pay the least additional interest – but might be the one that’s most difficult to do.  By deferring the payment for six months, you’ll free up RM2,390.52 each month to use for buying groceries and other essentials if the extra cash is needed. But remember, this isn’t free money – this is the amount you’d have to spend for your home loan.

However, you will accrue RM10,000.02 in additional interest during the deferment period. For those who will need the deferment to free up cash flow during these six months, Option 1 will definitely be a stretch – how to raise RM10,000.02 when there isn’t even enough money to pay for bills?

However, for those who have the means to pay their monthly repayments but are curious if this deferment is an opportunity to make some money, we can safely say it is possible – but it’s highly dependent on what saving/investment instrument you use, and your investment horizon. And in this economic climate, you could potentially lose even more money by investing the repayment money. We will explore this further in our Recommendations section below.

Option 2 (A) & (B): Pay the same monthly repayment, and extend loan tenure

For option 2 (A), you will pay the amount as you did before, but the loan tenure will have to be extended to accommodate the six months of additional interest accrued. In the RM500,000 outstanding home loan example, you’ll be extending the tenure by a whopping 21 months (and not just by six months, because the interest accrued during the 6 months will be added to the principal and accrue interest from the resumption of payment). The total additional interest charge for this option is RM33,866.34.
Do not opt for this.

Some banks will also offer Option 2 (B), which is extending your loan tenure by 6 months (i.e. the same duration as the deferment period), but you will be required to bump up your monthly repayment. In the RM500,000 home loan example, you will need to pay a new monthly amount of RM2,438.33 (RM47.81 more than before). The total additional interest charge for this option is RM17,163.94. That’s lower than Option 2 (A), but here’s a better option:

Option 3: Pay a higher monthly repayment, but keep the loan tenure unchanged

This option is the best repayment option to take.
 Because you are opting to pay more each month to offset the outstanding balance (both principal + original interest and deferred period interest), the total interest charge will also be lower. The new monthly repayment amount will be RM2,459.88 until the end of the loan – RM69.36 more than your old repayment amount. The total additional interest charge for this option is RM10,139.68 – just RM139.66 more than Option 1 where you fork out a huge lump sum.

To summarise, here’s a table to show the possible repayment options after the deferment period, and how much additional interest will be charged as a result of the deferment:

Option 1

Option 2 (A)

Option 2 (B)

Option 3

Monthly repayment

RM2,390.52

RM2,390.52

RM2,438.33

RM2,459.88

Repayment difference

0

0

+ RM47.81

+ RM69.36

Loan tenure

+ 6 months

+ 21 months

+ 6 months

Unchanged

Total interest charged from deferment

RM10,000.02

RM33,866.34

RM17163.94

RM10139.68

*Update 6 Apr: Fixed error on Option 1 (loan tenure should be +6 months)

As you can see, how you repay your loans after the deferment period makes a huge difference.

What about Islamic home financing?

Now, if you’re on an Islamic home financing plan, you can ignore all of the calculations above. Since Syariah principles forbid compounding profit (i.e. no profit from accrued profit), regardless of whichever repayment option you choose, the financial commitments will be the same: you just need to repay the accrued profit from the 6-month deferment (i.e. RM10,000.02 in the example used in this article).

It’s best to check with your bank on how the repayment will be implemented.

Relief For Those Who Need It

As you can see from the calculations above, the total additional interest charged is certainly a huge number, but when spread over a few decades this number becomes noticeably more manageable. This is something important to keep in mind.

To put it in context, someone servicing a 30-year home loan with RM500,000 outstanding may lose their jobs during this period. This deferment frees up RM2,390.52 each month from their monthly commitment, which can mean having food on the table, buying schoolbooks for the children, not defaulting on a loan, and overall, alleviating immense financial stress. In exchange, when things are hopefully better, he or she pays RM47.81 or RM69.36 more to their home loan repayments each month for the next 30 years.

For those who don’t have a choice, this trade-off is worth every Ringgit.

Should you take the deferment? Our recommendation

Take the deferment if…

you have an existing car loan or personal loan
 (and their Islamic financing equivalents). This is a no-brainer – you suffer no implications, and your loan resumes from October 2020. You should already receive an SMS from your bank informing you of the deferment to your existing loan, and how to opt out.

you face some serious cash flow issues during this period and have no emergency funds
 – this deferment is to alleviate this exact concern. If your employer has imposed a salary cut – or worse, a round of layoffs – this deferment will ease the financial stress. Don’t forget to also check what financial aids you are eligible for. This is a very difficult period, but we can pull through.

you foresee a potential cash flow issue
 – with no job security across all industries, you’ll never know what might happen. Even if you can afford to service your loans, at the very least this deferment helps you build a buffer for the future (see below). Note that you can opt in for the deferment at any time during these six months, so you don’t have to make a decision now.

your risk appetite is high enough, or if your investment horizon is long.
 You can make use of the monthly repayment to make more money (provided you have enough money set aside for other commitments). Here’s how much you stand to earn if you put this amount in a fixed deposit or an investment product (assuming you invested ALL the 6-month repayment, selected repayment option 3, made no withdrawals, and the projected returns are guaranteed):

Return of investment

4%

6%

8%

Total invested

RM14,343.12

Total interest to repay (Option 3)

RM10139.68

Total earned after 30 years

RM33,110.19

RM71,587.09

RM141,007.53

Breakeven point

13 years, 7 months

9 years, 2 months

6 years, 11 months

Net earnings after 30 years

RM22,970.51

RM61,447.41

RM130,867.85

Finally,
if you are on an Islamic home financing plan
, take the deferment. Syariah principles forbid any form of compound profit, which makes a huge difference in terms of how much profit you pay to the bank. With zero compound profit on both the principal and the accrued profit during the deferment, you’ll enjoy the best of both worlds (6 months payment deferment
and
 low profit charge).

DON’T take the deferment if…

You should understand that this deferment programme is primarily aimed at those who may face immense financial distress due to the economic effects of the Covid-19 pandemic. If you are able to service your loan as usual and are financially secure in this economic climate, you can consider opting out of the deferment programme.

That said, it makes sense to still take the deferment and save the money in a fixed deposit with 4% p.a. returns for the next 30 years. If you chose repayment Option 3 in the example above, you will earn a nett amount of RM22,970.51 (after deducing the interest charges in the same timeframe). It may not be much, but hey, this is RM22,970.51 more in your pocket than if you didn’t take the deferment whatsoever.

*************

BNM’s deferment programme is a beneficial step for all Malaysians currently servicing any form of loans/financing plans, and an important one during this challenging period. We recommend those eligible to take the deferment, as those who will need it will have a brief respite, while those who can afford to service their loans can actually earn some money by saving or investing the deferred instalments.

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About THE AUTHOR

Pang Tun Yau

Pang Tun Yau

A seasoned tech journalist who now focuses on his other passion, Pang is a firm believer in old-school DCA and optimised spending.

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    Tee

    3 years ago

I took a personal loan from my credit card line of credit. Isn’t this eligible for this deferment program? My Bank is saying no as it’s credit card related.

1

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Tee

It will likely be classified as a “cash advance” by the bank, and even though it is at a lower interest rate than a normal cash advance, it is still tagged as under a “credit card facility” and will not fall under the loan deferment.

0

Reply

    Fauzi

    3 years ago

can you further explain option 2A? “For option 2 (A), you will pay the amount as you did before, but the loan tenure will have to be extended to accommodate the six months of additional interest accrued. In the RM500,000 outstanding home loan example, you’ll be extending the tenure by a whopping 21 months (and not just by six months, because the interest accrued during the 6 months will be added to the principal and accrue interest from the resumption of payment). The total additional interest charge for this option is RM33,866.34. Do not opt for this.” IF WE PAY
…
Read more »

12

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    Pang Tun Yau

    3 years ago

    Reply to

        Fauzi

That’s because the six-month interest is added to the principal, which means you now have a higher amount to repay over 30 years. During this period, you will accumulate a higher interest charge (because of the added 6-month interest). If you don’t change the monthly payment, you’ll end up paying for a longer period (and this incurs more interest charge). Hope that helps!

0

Reply

    aliff norisahak

    3 years ago

Hello ringgitplus. Although i cant vouch for the accuracy, but i believe you are the first to publish this information in details. Thank you

17

Reply

    Aaron

    3 years ago

A lot of things are highly inaccurate. For example, some banks like RHB are offering the moratorium to extend mortgage loans for 6 months tenor while monthly installments remaining the same thereafter. Please refer to RHB website: https://www.rhbgroup.com/covid_retail/index.html How it works is that in the 7th month onwards, your monthly installments will be used to settle the outstanding interest first. So this option is extremely viable as well. 20. What would happen to my loan/financing after the moratorium period? Will I need to pay more interest/profit after the moratorium period is over? Is there an increase in monthly payments, or
…
Read more »

0

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    Pang Tun Yau

    3 years ago

    Reply to

        Aaron

Hi Aaron, Both RHB and CIMB have stated that the installments from Month 7 onwards will go towards settling outstanding interest accrued from Months 1-6 (Apr – Sep 2020). However, here are the reasons why we didn’t mention it in the write up: 1) in both RHB and CIMB’s FAQ pages, they did not say whether interest will accrue on the accrued interest from Month 7 onwards. All banks explicitly state that the accrued interest will not accrue interest “during the deferment period”, but what happens from Month 7 after? If it is not stated in their FAQs, we cannot
…
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2

Reply

    Tan Wei Wern

    3 years ago

Thanks for posting these up. However could you furnish us with the formulations on calculating the total interest charged from deferment of option 2(B) and repayment difference of RM47.81 in option 2(B)

2

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Tan Wei Wern

Our co-founder, Hann, built a tool to help us calculate them. Once we figure out how we can furnish this calculator tool with more info, we will release it either as a downloadable file or a live calculator. For now I can’t promise anything yet 🙁

4

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    StaySafe

    3 years ago

For option of Credit Card conversion to Term Loan, is it advisable to apply?

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        StaySafe

It highly depends on your individual cash flow and ability to repay the outstanding balances on your credit card(s). A 13% p.a. term loan is quite high, but is still lower than a 18% p.a. reducing balance over time. Be realistic with any potential issues in the future (job security, added expenses etc) and how it may affect your ability to repay your outstanding credit card balance before you make an informed decision. All the best!

0

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    mohamed raisul

    3 years ago

A big thank you RinggitPlus! You’re the first to discuss on the aftermath of taking the moratorium. This puts things to perspective although the banks are yet to come up with their explanation on how things will work out.

3

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        mohamed raisul

Thank you for the kind words. We may provide recommendations but at the end of the day, each individual’s needs are different, and we hope the explanation and elaboration provided will help Malaysians make an informed decision.

1

Reply

    Ferdouz

    3 years ago

I think you calculate not accurate. on opt 3. The additional rm 10139 already deduct with the loan payment 6 month we need to pay. Again we deduct to the interest .hope you can clarify again

0

Reply

    LOGESH JAGANTHERAN

    3 years ago

Hope to see more useful information from your end. Good Job, Ringgitplus !!

3

Reply

    SL

    3 years ago

If i were to use the accumulated monthly installments to reduce the principal after 6th mths moratorium, will it be better?

1

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        SL

You still accrue 6 months of interest on the outstanding principal, which will negate any benefits you may get from reducing the principal this way.

0

Reply

    Anonymous

    3 years ago

What about mortgage – progressive interest? I understand that theres a difference treatment between progressive interest and fully disbursed loan.

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Anonymous

Progressive interest will still be eligible for for the deferment, but based on the banks’ FAQs, you need to clear off the outstanding interest accrued during the deferment period before the disbursement to prevent any accrual of additional interest imposed on the principal (due to reduce payment towards the principal). As what RHB says: “We advise that the deferred monthly progressive interest/profit accumulated to be settled before the loan/financing is fully released. Otherwise, payments meant for monthly instalment once the loan/financing is fully released will go towards settling the outstanding progressive interest/profit, resulting in lower payment towards reducing your principal
…
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2

Reply

    KS

    3 years ago

Hi RinggitPlus, thanks for the explanation. The information really helps me to understand better about the moratorium =)

Just some comments/questions:

For Option 1, if monthly repayment amount remains unchanged, isn’t the loan tenure be extended for 6 months? On the other hand, if loan tenure remains unchanged, isn’t the monthly repayment becomes RM2,411.64 (+RM21.12) with net additional interest of just RM3,113.49?

Not sure if my calculation/understanding is correct. Please correct me if i’m wrong. Thanks very much.

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        KS

Hi KS,

You’re right. The loan tenure should extend by six months to accommodate the deferment period if repayment amount is unchanged, and RM2,411.64 to maintain the original tenure. I’ll update the table for clarity. Thanks!

However, the net additional interest would still be the RM10,000.02. I am not sure how you got the RM3,113.49, if you can share it with me, I can help verify.

0

Reply

    julia

    3 years ago

if i opt for deferment and i put the money in ASB for more than 10 years and opt for extended 6 months repayment period would it be better.?

0

Reply

    deryck

    3 years ago

Can you explain what is your remaining tenure assumption in your calculation with a repayment increase of rm69.36? I’m wonderjng how is the difference in interest between Op 1 and Op 3 only rm139.

0

Reply

    James Phua

    3 years ago

to take or not to take? There are many scenarios to cover but at least you covered 1 scenario. That’s already better than the other articles out there. Good job.

1

Reply

    Vinz Chia

    3 years ago

Hi, thanks for sharing this useful detail calculation on loan deferment with us. One things I notice is that this article only talk about the interest incur throughout the 6 months loan deferment period but never include the 6 months principal into the calculation. Is that right? For option A, shouldn’t we fork out additional 6 months principal instead of just RM10,000.02? Same to the rest of the option. Won’t the principal affect the total interest you need to pay at the end of the day? Another question from me is: From what I notice throughout the net, there is
…
Read more »

-2

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Vinz Chia

During the deferment period, you’re not required to pay a single sen of the usual monthly repayment (principal + interest). The remaining loan amount is “frozen” from April till September 2020. What we’re calculating is the additional interest you will have to bear when opting in for the deferment. For loans of properties under construction, it’s the same but with one difference: you need to settle the outstanding accrued interest (during this deferment period) before the disbursement of the loan. Otherwise, it will affect your repayment of the principal. As what RHB says: “We advise that the deferred monthly progressive
…
Read more »

0

Reply

    Mak Cik Kiah

    3 years ago

For auto loan, i don’t think banks are so kind hearted to give free “payment holiday”. Bank will never lose even a single cent by allowing customer to borrow for free 6 months…

Please check with the banks before posting this kind of info…

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Mak Cik Kiah

Banks are not losing money. Due to the nature of fixed/flat rate loans, interest is already calculated upfront and against the full sum of the loan each year (vs outstanding principal in a home loan). There’s no wiggle room for banks to charge extra interest during the deferment. The only additional charges that can be imposed is late payment fees, which BNM expressly forbids during the deferment period.

0

Reply

    Farid Omar

    3 years ago

Hi Mr. Phang

Thanks for your valueable articles. Im currently have islamic housing loan and you suggest to option in, rite? So in october i just need to pay as normal and my loan tenure will just extend 6 months only rite? My understanding is correct?

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Farid Omar

Hi Farid,

Please check with your bank on how the repayment for the 6-month accrued interest will be. It is mathematically impossible to repay the same monthly installment and extend the tenure by 6 months – the accrued interest must be paid back somehow. The main difference here is the 6-month accrued interest cannot be compounded, which makes a huge difference over 20-30 years.

1

Reply

    Lim

    3 years ago

Hi, first of all, thanks for the details. After I read through the details, I realised your option seems to be missing out on how RHB would calculate the repayment. This is what I quote from their website’s FAQ, “The monthly instalment/payments will first be allocated to pay off all outstanding interest/profit. Payment will only be subsequently allocated to reduce the principal balance once all outstanding interest/profit has been paid.” Link for your reference : https://www.rhbgroup.com/covid_retail/index.html If so, even if we pay the same installment after 6 months, it would not be an additional 21 months of tenure. I am
…
Read more »

1

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Lim

Hi Lim, as per another query, am replying the same: Both RHB and CIMB have stated that the installments from Month 7 onwards will go towards settling outstanding interest accrued from Months 1-6 (Apr – Sep 2020). However, here are the reasons why we didn’t mention it in the write up: 1) in both RHB and CIMB’s FAQ pages, they did not say whether interest will accrue on the accrued interest from Month 7 onwards. All banks explicitly state that the accrued interest will not accrue interest “during the deferment period”, but what happens from Month 7 after? If it
…
Read more »

1

Reply

    Rhen

    3 years ago

Question 1:If we opt for Option 3, must we speak to our bank officially n inform them to recalculate our higher installments without affecting the tenure. Or do we just increase our instalments ourselves (if we know how to calculate ourselves)

Question 2: what if we opt for the moratorium, n save the instalments over the next 6months, pay off the accrued interest after 6months n instead feed the whole saved amount as a lump sum contribution to reduce the principal amount? Does that work out better?

1

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Rhen

Question 1: yes, you should speak to your bank to discuss your repayment options. From what I understand, banks will contact you about your repayment options towards the end of the deferment period, that’s your chance to decide. If you can choose to pay even more, the effects of principal reduction will mean you save more! Question 2: Yes, because principal reduction carries a huge saving over the duration of the loan. That said, the 6-month accrued interest is a significant sum to pay for generating 6 months’ worth of installments. You’ll be saving interest on one side, only to
…
Read more »

3

Reply

    JOE

    3 years ago

I don’t think option 3 is accurate. If the tenure is kept at the same tenure and you choose to top up your monthly to by RM69.36 monthly for the remaining tenure, how can this be RM139 more than option 1.

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        JOE

There are a few factors at play here. First, a small number multiplied over 30 years makes a difference. In this case, 69.36 x 360 = 24,969.60. Option 3 also ends at the original tenure vs Option 1, which ends 6 months later (from the deferment period). Secondly, the effects of principal reduction also apply, which makes a big difference over time. Both these factors work in your favour, in this case.

0

Reply

    Kiki

    3 years ago

How can your Total Invested be RM14,343.12 when you only have RM10,000.02 by opting for loan deferment. Good read tho!

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Kiki

RM14,343.12 is your 6 months worth of monthly installments that you have on hand during the deferment. RM10,000.02 is the interest accrued from the loan deferment that you need to pay.

0

Reply

    Jon Chua

    3 years ago

What about full flexi mortgage loan? My facility is a 2 account flexi mortgage. I usually bank in quite a bit more than my minimum monthly payment sum into my current account. If I continue doing that during the moratorium, and assuming I take up the moratorium, would I not be saving more since effectively the balance in the current account will not be debited towards loan payment, and the effect is that the interest charged will be on a lower outstanding sum (since the principal and interest are not debited for 6 months)?

15

Reply

    Then

    3 years ago

Thanks a lot for the explanation, iit’s very clear.i just want to confirm it’s worth to take the deferment if we choose the option 3,  ,

Another Q is do all the banks give all the 3, options or they will fix the option ?

How about flexi loan?

0

Reply

    Concerned individual

    3 years ago

Thank you for the comprehensive explanation and illustrations. But i find your final statement/conclusion to be intentionally. You left out the fact that option 3 required extra payment of 24, 963.60 which your assumption of 4% FD over the next 30 years does not generate sufficient to cover.

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Concerned individual

Don’t be confused, that RM24,969.60 (from RM69.36 repayment difference in Option 3) is not the additional interest you will be paying. That’s the extra amount you are paying to maintain the loan tenure (and not extend it), while taking into account the additional 6-month interest accrued during the deferment (ie RM10,000.02). For repayment Option 3, this interest is added to the outstanding principal at the end of the deferment period, and treated as “new outstanding balance” from October 2020 onwards (ie RM510,000.02).

0

Reply

    Marwin Lee

    3 years ago

If the curent invest return is less than the interest charge on my loan, is it better to use my car loan installment to pay for my housing loan?

0

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Marwin Lee

Yes, if you defer your car loan but opt out of the deferment for the home loan. The deferment is meant to free up extra cash anyway.

0

Reply

    Zulkifli Ahmad

    3 years ago

From my understanding, if you don’t do anything, the bank will automatically waived

the monthly payment but your 6 months interest will accumulate and loan period will be extended by 6 months. This will be as per option 2 as per yr example.  However you recommended option 3 which you pay a bit extra (after the 6 months) but no increase in loan period. So if i opt for option 3, then i have to contact the bank, correct ? If so plse reconfirm. Also, plse advise me maybank email address to query on this. Tq

1

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Zulkifli Ahmad

Option 2 will accrue more interest because your outstanding principal balance has gone up (due to the 6-month interest accrued), but you don’t pay extra each month after the deferment to offset the accrued interest. Option 3, where you pay a little extra each month, helps to offset this accrued amount. The banks will contact you about your options towards the end of the deferment period.

0

Reply

    Vijai Ananth

    3 years ago

Dear Pang, I think adding the unpaid interest accrued during moratorium to the outstanding balance after moratorium is your assumption rather than a confirmed act by bank. I believe banks will not do that because that defeats the very purpose of waiving compound interest during moratorium. Interest accrued after moratorium period shall be compounded, yes, BUT interest accrued during moratorium period SHALL NOT be added to the outstanding balance after moratorium period. As per your example in the article ie: RM 10,000.02 is the unpaid interest & I believe this will be treated separately throughout the tenure, not by creating
…
Read more »

1

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Vijai Ananth

Hi Vijai, I agree that banks should not compound interest after the moratorium. But none of the banks have mentioned this in any way, in all of their FAQs. If they do not explicitly state so, we cannot assume that banks will continue to waive compound interest after the moratorium. Therefore, we went with what information we have. This also means if the accrued interest is allowed to compound, it’s going to be at the same rate as the principal, ie: 10,000.02 at 4% p.a. 500,000.00 at 4% p.a Even if you treat it separately, the calculations will end up
…
Read more »

0

Reply

    AK

    3 years ago

Hi RinggitPlus,

Thanks for the explanation. Can you explain more if my housing loan is a flexi loan? By right, the repayment amount monthly should follow outstanding balance in the account. So if I opt for the moratorium, but still repay the same amount each month into the account, technically my outstanding is reduced more (hence even interest calculated should be less) as my full repayment goes into reducing outstanding rather than used up for interest. Is that how it works?

4

Reply

    BJ

    3 years ago

Where do you find fixed deposit that can give you 4%?

0

Reply

    Mellisa

    3 years ago

Thank you for sharing such insightful article. I am curious as to how to attain Total Earned After 30 years of RM33,110.19 given the return of investment of 4% p.a.? What are the assumptions used for this calculation?

0

Reply

    Tan Wei Wern

    3 years ago

Pang, any update on the downloadable file calculation or live calculator from Hann? Thanks

0

Reply

    Ethan

    3 years ago

I saw my home loan next payment date change to Nov 2020.

But if I don’t want to take the 6 months deferment program, which mean i still pay as normal in this coming April 2020.

What is the benefit that I gain? Or not gain at all?

Thanks for your advise.

0

Reply

    Hasnah Zainal

    3 years ago

How to invest when the investment section of the bank is closed during the MCO?

0

Reply

    Asong

    3 years ago

On the 30th April 2020, Bank Negara Malaysia (BNM) and the Association of Banks in Malaysia (ABM) have announced that interest may now be charged to all hire purchase agreements, will the interest will be accrued during this moratorium period? Based in your article on the hire purchase, would like to ask other people opinion regarding the option 1, on the month October 2020, meaning to say we will have to pay lump sum of 6 months loan without being charged of any interest? Kindly correct me if am wrong? Thank you.

1

Reply

    Brian

    3 years ago

With the u-turn for the treatment of Hire Purchase, can you provide a simulation on the additional charge calculation?

1

Reply

    Pang Tun Yau

    3 years ago

    Reply to

        Brian

We are waiting for confirmation of the calculations from both banks and BNM before we proceed with the analysis. Please stay tuned for updates.

1

Reply

    Hasbeen

    3 years ago

Love your insights and calculations for us

0

Reply

    L

    3 years ago

What if I took a housing loan for a property which is still under construction i.e. I am only paying the interest monthly for now? So how will it affect me if I take the deferment?

0

Reply

    john

    3 years ago

If anybody is interested, I came across this calculator to calculate my monthly repayment after extending the loan moratorium on lowyat forum and thought it was pretty cool (verified the numbers myself): doctorfrugal.com/loanmoratoriumcalculator/

2

Reply

    Prof (B) MAL

    3 years ago

Credit card bankruptcies are the highest toll. Why is the Minister not putting emphasis in these. Banks are reluctant ans imposing high financial charges. In addition, they impose interest on annual rest basis. The Effective Rates would thus be higher than stated.

Would the bank accommodate payments or let them go bankrupt and Not pay the banks?

0

Reply

    Prof (B)

    3 years ago

The banks have been fleecing rakyat with all sorts of ‘salvaging’ package but with built in trap to pay more interest. Bt the irony is that complaints to BNM falls on deaf ears. They play a ‘postman’ role from bank to rakyat. Pass the complaint to bank and forward the response from bank to rakyat. Any breach of laws and regulations went pass them too.

0

Reply

    Iylia Ihsan

    2 years ago

Hi Pang, for the new Moratorium announced by PM on 28th June. It is advisable to go for it? despite that I have taken RnR with the Banks I am serving with ? Thanks in advance.

0

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Touch n Go RFID: What Malaysian Road Users Need To Know

(Image: The Malaysian Reserve)

Malaysian tolls are moving towards a new system involving RFID technology that will replace the current Smart TAG lanes. In the last year or so, a few toll plazas have been selected to test run RFID lanes for public service vehicles such as police cars, fire trucks, and ambulances. Starting from September, the pilot phase will be extended to members of the public who are interested to test the system. Come January of next year, the Touch ’n Go RFID system is expected to be rolled out to the public for payment across all highways.

What is RFID?

RFID stands for “radio-frequency identification”. It’s a type of technology where digital data encoded in RFID tags is scanned by a reader via radio waves. It is not unlike a barcode being scanned by a reader at a retail shop, but for RFID the tag does not need to be within the line of sight of the reader as it operates on radio waves. You may already have been using RFID tags in some form without realising it – for example, RFID is used in access cards for the workplace or condominiums.

In comparison, the current
Smart TAG technology is based on infrared (IR) ray
. While absolutely harmless to humans, IR rays carry heat, which is why higher-end tinting films have high IR rejection levels to keep the car cool. However, one major inconvenience is that Smart TAG cannot be used in cars with these films installed, as the IR rays cannot reliably penetrate the film and be detected by the readers at the toll gates.

How will Touch ’n Go RFID be used at Malaysian tolls?

(Image: Touch ‘n Go)

The Touch ’n Go RFID will be a new electronic toll payment system that uses a sticker to pass through the toll. The RFID sticker is embedded with a radio frequency chip and can be fixed onto the vehicle’s windscreen or headlamp. As the vehicle passes through the toll, an overhead scanner reads the radio frequency from the Touch ’n Go RFID sticker to lift the toll barrier and charge the toll fare. It is able to reach a range of 27 metres with a 10-millisecond response time.

The Touch ’n Go RFID sticker can only be registered with and installed on one vehicle, so each sticker is unique to a specific vehicle. The RFID sticker will be linked to the
Touch ’n Go eWallet
, allowing users to check their balance and top up their credit via online banking and debit or credit cards. The Touch ’n Go eWallet is a mobile app, so you will need a smartphone to make the relevant top-ups, although there may be an offline reload option in the works.

When will Touch ’n Go RFID be implemented in Malaysia?

(Image: Touch ‘n Go)

The Touch ’n Go RFID pilot phase involving interested members of the public will begin on 3 September. This pilot study is only open to Klang Valley highway users who drive privately registered cars under the Class 1 vehicle group (motorcars, vans, jeeps, and pickups). The fee for Touch ’n Go RFID is waived for pilot users and installations of the RFID will be performed by an authorised person at an authorised centre. If you would like to register your interest as a pilot user and be one of the first to start using the Touch ’n Go RFID stickers, leave your contact details on the
Touch ’n Go website
 and you will be contacted with further information.

The findings from this pilot period will be used to help make the necessary refinements to the Touch ’n Go RFID system before it is fully rolled out on every highway in Malaysia in January 2019.

Wait, what about the old methods of toll payment?

You can still use your Touch ’n Go cards, MyKad, and SmartTAG readers at the toll plazas as usual. However, the SmartTag device will no longer be sold by authorised agents as of 8 August as the RFID sticker is intended as an eventual replacement to the SmartTAG device. All the same, Touch ’n Go is still continuing its after-sales repair services for faulty SmartTAGs as normal.

(Image: Motor Trader)

Which highways have the Touch ’n Go RFID lane?

The list of highways with the Touch ’n Go RFID lane in Klang Valley are as below.

Kuala Lumpur – Karak Expressway (KLK)

Damansara – Puchong Expressway (LDP)

Kemuning – Shah Alam Highway (LKSA)

Cheras – Kajang Highway (GRANDSAGA)

Lebuhraya Grand Sepadu (GRANDSEPADU)

Shah Alam Expressway (KESAS)

Kajang Dispersal Link Expressway (SILK)

Maju Expressway (MEX)

Duta – Ulu Kelang Expressway (DUKE)

Stormwater Management And Road Tunnel (SMART)

New Pantai Expressway (NPE)

Besraya Expressway (BESRAYA)

Sistem Penyuraian Trafik KL Barat (SPRINT)

Kuala Lumpur – Kuala Selangor Expressway (LATAR)

Ampang-Kuala Lumpur Elevated Highway (AKLEH)

Guthrie Corridor Expressway (GCE)

To sum up, the Touch ‘n Go RFID is a step forward for Malaysian roads. This technology is implemented in various ways on expressways and city highways in many countries, and is definitely a step up from the IR-based SmartTAG, whose shortcomings usually result in annoying delays at the lane. However, it will also depend on the implementation of the RFID system, which is probably why Touch ‘n Go requires the installation to be done at authorised centres. Just as important is the fact that the implementation of this technology will effectively remove the constant fear of SmartTAG thefts, which is embarrassingly common in Malaysia.

(Sources:
Touch ‘n Go
,
The Star
,
Paultan
)

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    Ibnu

    2 years ago

Question: if I have RFID already fixed to my car bumper, and my eWallet is loaded with enough credit, I don’t have to have a smart tag (with TNG card) to pass through the special RFID lane?

5

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    R Siva

    1 year ago

If i use the rfid to enter the highway

 when i exit and there is no rfid at the toll, what happend? how do i exit

12

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    Chong

    1 year ago

where do i buy the GO RFID card???

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Clear All Bank Debts For B40, Says PPBM Youth Chief Wan Ahmad Fayhsal

(Image: The Malay Mail)

PPBM Youth Chief Wan Ahmad Fayhsal has called on banks to implement a targeted debt jubilee, where those in the B40 group will have all their debts completely cleared.

“We are in trying times and banks have been making large profits for years so a debt jubilee will be ideal,” stated Wan Ahmad Fayhsal, who is also the deputy youth and sports minister. A debt jubilee is when a bank cancels the debt of the borrower and clears it from the public record. “But we understand that not everyone will require a debt jubilee, so it should be targeted and done gradually.”

The PPBM youth chief further explained that government-linked companies and institutions with shareholdings in banks had a “social obligation” to the people and should make sacrifices. According to him, calls for banks to forego interest payments and debts were not new and that similar proposals were being mooted in other countries, too.

(Image: Astro Awani)

Wan Ahmad Fayhsal said that if a complete forgiveness of debt was not possible, banks should at least forego collecting interest payments on loans. Or, at the very least – extend the moratorium without interest. “That would not be unreasonable, and I think it will still be fair to banks and it won’t create shocks to the system,” he said.

The deputy youth and sports minister further opined that the moratorium should be without any time limit for those who remained unemployed. “The banks can collect repayments once a borrower has obtained a job,” he said, confirming that this was the wing’s proposal for the soon-to-be-presented national Budget.

“We (PPBM Youth) believe that the national economy must be driven by the ‘real’ economy which produces goods and services, and not the financial economy which has led to inflation,” declared Wan Ahmad Fayhsal, adding that there was a real need to alleviate the suffering of the youth, especially those who had lost their jobs. “The ‘real’ economy is for the man on the street, not shareholders.”

(Source:
Free Malaysia Today
)

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CIMB Crowned Best Bank In Malaysia At Euromoney Excellence Awards 2023

CIMB Bank has been crowned the Best Bank in Malaysia at the Euromoney Awards for Excellence 2023, in acknowledgement of its progressive approach to digitalisation and efforts to provide innovative solutions to meet its customers’ evolving needs.

One such solution is the
CIMB OctoSavers Account-i offering
, which features a fully digital eKYC account opening functionality and end-to-end online onboarding process. This particular product – which was launched back in 2021 – has been well-received, seeing a 94% year-on-year total deposit growth as of end-2022.

In addition to the CIMB OctoSavers Account-i, the bank’s CIMB Clicks and newer
CIMB OCTO
 mobile banking apps have also received continuous enhancements to provide a superior digital-first banking experience. These include initiatives to introduce more digital solutions on the apps, enhance their functionality and reliability, as well as add more security measures.

CIMB also innovated various other products and services as part of its digital drive, including its SpeedSend remittance service to deliver an easier and more user-friendly international fund transfer experience. The use of machine learning and AI capabilities further contributed to growth in credit card and personal loan applications, as well as unit trust transactions – among other things.

Ultimately, these digital initiatives have yielded positive results in driving transaction growth among customers; as an example, statistics showed that 80% of CIMB customers are digitally active on its platforms. More specifically, the number of active CIMB Clicks users recorded an annual growth rate of 13.9% over the past three years, whereas CIMB Clicks mobile users increased by 38% since 2020. On top of that, 71% of the bank’s total transactions by value is made via digital transactions, up by 11% from the previous year.

The chief executive officer of group consumer and digital banking for CIMB Group, Effendy Shahul Hamid said that the Best Bank in Malaysia award by Euromoney is a testament to CIMB’s commitment in delivering the best financial products and services to its customers, supported by the bank’s advanced technology. “Driven by a culture of innovation, we will strive to avail best-in-class solutions that deliver value and enable our customers to bank and transact conveniently, and safely,” he said.

The Euromoney Awards for Excellence 2023 is an annual ceremony that seeks to acknowledge and recognise banks around the world for their excellent performances in a variety of segments. For this particular round, the awards programme saw a record number of 1,700 submissions to compete in more than 50 regional awards and best bank awards in 100 countries.

(Source:
Euromoney
)

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About THE AUTHOR

Alex Cheong Pui Yin

Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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Public Bank and Western Union have mobile phones for you

Having another mobile phone is never too much of a good thing. Especially when you don’t have to pay for one.

From now until 31 Jan, making a Western Union money transfer at Public Bank could
win you a BlackBerry Curve 9380 or Samsung Galaxy Ace Plus
!

Every transfer for any amount you make earns you one entry. All you have to do to take part is text your Money Transfer Control Number (MTCN) over to Public Bank.

In addition, you’ll also get a mystery gift for every transfer of RM1,000 and above. As always,
terms and conditions
 apply.

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ringgitplus

ringgitplus

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UOB Announces Revision To UOB Yolo Credit Card, Effective 1 January 2020

UOB has announced some sweeping changes to its popular UOB Yolo credit card. The changes, which will come into effect on 1 January 2020, will fundamentally change the card’s offerings as it includes a change in cashback rates as well as cashback-eligible transactions.

From next year, the UOB Yolo will be a much-changed card. For starters, the card will now award a maximum 5% cashback on three categories: Online, Dining, and a new Contactless category. Cashback will be capped at RM30 per month.

Besides that, UOB has simplified the requirement to be eligible for cashback. Currently, cardholders need to perform a certain number of transactions with the card to unlock 5% (8-15 transactions) or 8% (more than 16 transactions) cashback, and each transaction must be a minimum RM10. From 1 January, this will be simplified to a minimum of 5 transactions worth RM15 and above.

More importantly, the revision will negate multiple transactions made on the same day, to the same merchant. If the cardholder makes multiple transactions to the same merchant on the same day, only the highest spend transaction will be taken into computation for cashback – and the total transaction count will be one regardless of actual transactions made to that merchant on that day.

However, UOB will increase the monthly cashback pool for the Yolo card, from RM120,000 currently to RM160,000 moving forward. Note that cashback is awarded on a first come, first served basis to cardholders that fulfils the cashback requirements.

UOB is also removing JomPay transactions from cashback eligibility for the Yolo card. One of very few cards to offer cashback for JomPay transactions, it looks like another card is scratched off this already small list. That said, it does seem like Grab transactions will no longer be disregarded from cashback.

The sweeping changes to the UOB Yolo Visa credit card changes the nature of the card quite fundamentally. While the number of transactions required to unlock cashback has been reduced, the cashback rate and cashback amount have also been reduced. There is good news, as the inclusion of Contactless transactions offers another avenue to earn cashback – just don’t use it on petrol, utility, or telco payments as those are not eligible.

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Pang Tun Yau

Pang Tun Yau

A seasoned tech journalist who now focuses on his other passion, Pang is a firm believer in old-school DCA and optimised spending.

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    Chris

    3 years ago

Are all e-wallets now available for 5% cashback for UOB YOLO Card?

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    Pang Tun Yau

    3 years ago

    Reply to

        Chris

Your mileage may vary depending on how early you make the transactions. Some users verified that those that were supported before the revision can still get cashback, as long as you fulfill the 5x spend requirement.

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ePenjana RM50 E-Wallet Credit Only For Those Who Download MySejahtera App

(Image: Bernama)

Senior Minister Datuk Seri Ismail Sabri Yaakob has revealed that you must download the MySejahtera app in order to qualify for the RM50 e-wallet credit offered under the Penjana short-term economic recovery plan.

Datuk Seri Ismail Sabri said that this is to encourage more Malaysians to download the app, which will assist health authorities in efforts to contain the Covid-19 pandemic. The app enables contact tracing at business premises via the use of its QR code.

Under the
ePenjana initiative
, eligible Malaysians will be given RM50 worth of e-wallet credit as well as an additional RM50 in value through vouchers, cashback, and discounts offered by e-wallet partners. In addition to the new requirement of downloading the MySejahtera app, you must be a Malaysian aged 18 and above and earning less than RM100,000 annually in order to qualify for ePenjana credit. The ePenjana programme will run from July until September 2020.

This e-wallet credit initiative is similar to the previous
RM30 digital incentive
 introduced by the Pakatan Harapan government under its e-Tunai Rakyat programme. However, unlike the e-Tunai Rakyat credit, the ePenjana credit can only be used for offline or physical purchases.

You can download the MySejahtera app on
Google Play
, the
App Store
, or the
Huawei AppGallery
.

(Source:
The Malay Mail
)

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    SW

    3 years ago

If we sign up for the app now will we still be eligible next month? Or should we download the app next month?

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    bunsan

    3 years ago

How to claim all those benefits? I have downloaded and installed the app but no mention of the incentives being credited to me.

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Bank Islam, AKPK Sign MoU To Expand Financial Management Programmes For Individuals And SMEs

(Image: Bank Islam)

Bank Islam Malaysia Bhd (Bank Islam) and the Credit Counselling and Debt Management Agency (AKPK) have inked a memorandum of understanding (MoU) to expand financial management programmes for individuals, as well as small and medium enterprises (SMEs).

Through this partnership, the AKPK representatives will offer financial management education to Bank Islam’s clients. Based on the modules jointly developed with Bank Islam, the topics that will be covered include banking products or services that cater to the needs of the participants.

“These holistic and practical modules will strengthen the knowledge of participants and help them make appropriate financial assessments,” Bank Islam said in a statement.

(Image: Bank Islam)

Furthermore, the programmes under this initiative are not limited only to Bank Islam’s clients; they will be extended to participants who are enrolled in the AKPK’s financial education programmes as well. This expansion is to improve the wellbeing of all customer segments and to increase financial inclusion among Malaysians.

For context, the financial management programmes that are being expanded under this Bank Islam-AKPK partnership have actually been offered since the beginning of the Covid-19 pandemic. Its success has encouraged both parties to strengthen their cooperation, marked by the recent signing of the MoU.

Besides the programmes, chief executive officer of Bank Islam, Mohd Muazzam Mohamed said that the bank is also seeking to provide value-added services, such as financial planning and negotiation services. “Bank Islam aims to take steps to further enhance its role as a provider of
shariah
-compliant financial products and services to meet the needs of all market segments,” he added.

(Sources:
Bank Islam
,
The Edge Markets
)

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Nur Adilah Ramli

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