Risk disclosure

A loan can help you meet a need for money, but it also comes with the responsibility to repay. Before you borrow, please understand the following risks.

Check that you can afford it

Work out your monthly income and fixed expenses, and make sure you can repay on time for the whole tenure. If your income varies, leave a buffer.

Flat rate and effective annual rate

We calculate interest using a flat rate. Because you repay principal every month, the effective annual rate on a reducing balance is higher than the flat rate. Compare loans using the effective rate. See our rates and fees page for details and examples.

What happens if you pay late

Late payments incur late payment charges and may affect your credit record, making it harder to borrow in future.

The law limits what late payment can cost you. Under Section 17 of the Moneylenders Act 1951, only simple interest of 8% a year may be charged on the overdue amount, counted day by day. Interest may not be compounded, and the rate may not be raised because you paid late.

Don't borrow more than you can repay

Don't borrow more than you can afford just to pay off other debts. If you're already struggling with existing debts, get professional debt advice first.

Read the agreement before you sign

Before signing, check the loan amount, interest rate, tenure, monthly instalment and every fee in the agreement. Under Section 27 of the Moneylenders Act 1951, the person attesting the agreement will explain its terms to you. If anything is unclear, ask before you sign.

Never sign an agreement that has the amount or the interest rate left blank. Preparing an agreement in which these are not truly stated, or are left to be filled in later, is an offence under Section 27B. You are also entitled to a signed, stamped copy of the agreement before the money is lent (Section 16).

Source: Attorney General's Chambers of Malaysia · Moneylenders Act 1951 (Act 400)