In Malaysia, licensed moneylenders offer a vital alternative to traditional banking, providing accessible loans regulated under the Moneylenders Act 1951. These lenders provide structured loans with legal protections, contrasting sharply with unlicensed loan sharks who operate outside the legal framework and engage in unethical practices. Understanding these distinctions is crucial for making informed borrowing decisions.
Moneylenders are distinct from both banks and loan sharks. In Malaysia, there are three legal avenues for borrowing money: licensed financial institutions, cooperatives, and licensed moneylenders.
Licensed financial institutions include commercial banks and other financial services providers, offering a variety of financial products and services. These institutions are regulated by Bank Negara Malaysia (BNM) and the Securities Commission (SC).
Licensed financial institutions include commercial banks and other financial services providers, offering a variety of financial products and services. These institutions are regulated by Bank Negara Malaysia (BNM) and the Securities Commission (SC).
Licensed financial institutions include commercial banks and other financial services providers, offering a variety of financial products and services. These institutions are regulated by Bank Negara Malaysia (BNM) and the Securities Commission (SC).
It is important to note the presence of unlicensed moneylenders, commonly known as loan sharks. These are illegal and should be avoided at all costs.
Here's the requested information about the pros and cons of personal loans from licensed moneylenders presented:
This table provides a clear and structured overview of what to expect when considering a personal loan from licensed moneylenders in Malaysia. Apart from that it is important to know a few extracts from the moneylenders act:
Licensed moneylenders operate solely with their own funds, with interest rates capped by the Moneylenders Act 1951, which stipulates simple interest rates of 12% to 18% per annum, depending on the provision of security for the loan.
The Moneylenders Act defines the permissible activities and operations for moneylenders, including those who are employees, agents, or owners of the business. Section 29B of the Act criminalizes harassment or intimidation of borrowers by licensed moneylenders, distinguishing their methods from the often violent tactics of unlicensed lenders or loan sharks.
When considering a loan, it's crucial to conduct thorough due diligence to ensure you're dealing with a legitimate moneylender and not a loan shark in disguise. Here are three straightforward ways to verify if a moneylender is licensed:
By law, licensed moneylenders can only charge a maximum of 12% per annum for secured loans and 18% per annum for unsecured loans. These caps ensure that rates are fair and legally compliant.
The loan agreement should be a formal legal document and must be witnessed by an authorized third party such as a lawyer, legal officer, Commissioner for Oaths, or similar authority. This guarantees that the agreement is enforceable in court.
A legitimate moneylender must hold a valid license and should not have a criminal record or be declared bankrupt. Check the lender's registration number through the Ministry of Urban Wellbeing, Housing, and Local Government’s (KPKT) i-KrediKom mobile app. This app also allows you to lodge complaints and access information about borrower rights under the Money Lenders Act 1951.
We screen lenders so that you don’t have to. Not only does Lendingpot only work with licensed moneylenders but we only work with those that act that way. Many licensed moneylenders may not always act according to the rules and can hurt borrowers.
Always use common sense; if an offer seems too good to be true, it probably isn't legitimate. Be vigilant and thoroughly review all aspects of the loan agreement before committing
You can decide to apply it directly through each individual banks and moneylenders or you can apply it through Lendingpot to compare across multiple personal loan lenders online.
We have a dedicated team that will walk you through your entire loan process and help you do the market research you need.
Be ready to be spoilt for choice when we help you compare the best rates across all banks and non-banks so you only get the lowest interest rate and the highest cash out amount. Our rates are same as what the banks can offer or even better.
We do this entirely without cost to you. However our lenders pay us a referral fee to let them compete and win your business. Hence, you can be assured that our advice is unbiased and true to you. Additionally, we give rewards to our members when they get a loan as a way to share our joy.
For better understanding, check out our carefully compiled list of frequently asked questions (FAQs):
Under the Moneylenders Act 1951, the maximum interest rate for unsecured loans is capped at 18% per annum, while for secured loans, it is capped at 12% per annum.
The financing amount you can borrow is influenced by several factors, including your income, existing debt obligations, and credit history. Different lenders may offer a maximum loan amount of up to RM20,000, with loan terms ranging from 1 to 4 years, depending on their policies.
No, none of the licensed moneylenders on the Lendingpot platform will take your ATM card when you apply for a personal loan through us.
1. A copy of your NRIC (front & back)
2. Latest 3 months payslip
3. Latest 3 months bank statement
4. A copy of utility bill (i.e. water, electricity)
5. A copy of your EPF (detailed) contribution statement
A personal loan is a type of an unsecured loan. This means that you do not need to provide any collateral or have any guarantor in order to borrow money.
You may get the outcome of your loan approval in as quickly as 1-2 business days, provided all necessary documents are submitted in full and complete. Once the loan agreement is signed, the loan funds can be disbursed within approximately 1-2 working days.
Yes, you can do so.
1. Lendingpot operates as an online platform for personal lending, assisting borrowers in searching for, comparing, and applying for the most fitting financial solutions. We collaborate exclusively with moneylenders licensed by the Ministry of Local Government Development (KPKT).
2. Our services are completely free of charge, with no payments required from our users at any point. Moreover, we offer a RM10 cashback with every loan procured, making it an obvious choice!
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