Bank Negara reduces OPR by 25BP

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Bank Negara Malaysia has effectively reduced the OPR (Overnight Policy Rate ) by 25 basis points. This is around 0.25%. This would meant that Bank Negara in Malaysia would have to follow the OPR guidelines and to reduce their BR (Base Rate) by 0.25%. Literally all interest rates would have to be reduced with the latest announcement by Bank Negara Malaysia

How does it effect me?

Changes in Interest Rates effects the whole country’s economy and thus almost everyone with or without a loan is effected.

Benefits of Interest Rates reduction

Interest rates reduction punishes savers and rewards heavy debtors. If you are servicing any flexible interest loan such as house loan , you will see a small amount of decrease on your monthly installment statement. Loan such as Islamic based loan, Car Loans and Personal Loans(fixed interest) will not have any benefit as these loans interest are fixed throughout the whole loan tenure. This means that whatever you loan is the same from the start.

Unfortunately Fixed Deposit and Saving account interest rates will be reduced too. This means that whatever money you put in the bank will produce lower interest rates.

Winner of OPR Reduction

Property developer will be able to see benefits as loans are getting cheaper. Heavy debt and leveraged people are also able to see some benefits due to interest reduction.

I don’t have a loan will it effect me? 

Yes. Reduction of interest rates will create money supply thus increases inflation. This means that Malaysian Ringgit value will be dropping as Interest Rates are reduced. At the time of announcement the rate of USDMYR has increased to yearly high of 4.195. This means that investor are dumping ringgit due to lower interest rates. Inflation and Ringgit devaluation will ultimately reduce purchasing power and make goods more expansive.

Overall, the reduction of Interest Rates may help spur the economy a little bit if implemented wisely.

 

MBSB X-press Raya 2013 Personal Loan

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mbsb-raya-2013-promo
Pakej Express Raya MBSB
RM 50,000 loan for 10 years with flat rate of 3.99%
Valid for 19 years and above not exceeding 58 years at the end of tenure
Stable position with minimum salary of RM 1500
No guarantor needed
Government servant and GLC staffs only.
Only valid from 10th of July to 6th of September 2013

 

MBSB has come up with a great personal loan offer as of Hari Raya 2013. There are some of the details of the personal loan package are as above. Looking at the 3.99% flat rate, the rate is a pretty good bargain compared to what you have in the market currently for government staffs loan. You can only loan RM 50,000  no less and no more at 10 years repayment period. MBSB also gives a 3 days processing guarantee with a free RM 300 cash .

 

Please take note that this offer is only valid for Government servants and GLC staffs only. You must also be 19 years old and above while not exceeding 58 years at the end of loan tenure . This promotion is protected with Takaful insurance. So if you are keen, hurry up to take the offer before 6th of September.

 

 

 

MBSB Personal Loan

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MBSB personal loan has been long catered for Malaysian public servant with very competitive rates.  MBSB is now available for Private Sector Employees with higher interest rates, the range of private sector employees are limited to Public Listed Companies and selected GLCs. For a start this loan is also a Shariah compliant loan. The interest of the loan is defined by Current Islamic Effective Cost of Fund (ECOF-i) , this calculation is used as MBSB is not tied to Bank Negara Malaysia. MBSB recevied its financial license from Ministry of Finance (MOF) *Base Rate not being used for MBSB

Here are some of the personal loan packages that are offered by MBSB.

 

MBSB Personal Financing-I Private Personal Loan

MBSB Personal Financing-i for private sector ( Pembiayaan Peribadi-i Sektor Swasta )
Interest at  ECOF-i + 4.10%  which is 6.43% p.a flat rate for around 10 years
Maximum RM 400,00 Financing available
Maximum 10 years repayment
Selected Private sectors , Public Listed Companies, Certified Professionals
Public sector employees
No guarantor needed
Fast approval
Minimum 2 years permanent employment

*ECOF is MBSB terms for Base Rate

Finally, MBSB has decided to have personal loan for private sectors as well. This personal loan is shariah compliant buy and sell concept while it is an unsecured loan where no guarantor and collateral is required. MBSB Personal loan provides up to RM 400,000 of financing with a maximum repayment of 10 years with a fast approval process.

It comes with an attractive ECOF-i + 4.10% p.a with monthly reducing balance. At the time of writing BLR 6.43, you will be getting 11.1% p.a. How is this different from other banks who are offering 8.8% p.a. (flat rate) ?  The effective interest rate of flat rate is actually near double while with monthly reducing balance, you are probably getting the same interest rates as advertised.  So the effective interest rate for 8.8% p.a. would probably be somewhere 16% to 17% p.a. EIR.

Charge and Cost

Takaful insurance is optional for this loan. There is a 1% p.a penalty for any late repayment. Standard 0.5% Stamp Duty is applicable. Early settlement for the loan with permissible with settlement fees based on  pelarasan ibra “Rebate” calculation.

Eligibility

This loan is only available for Malaysian citizens. The minimum age requirements is 21 years old while not more than 60 years old (or retirement age) at the end of loan tenure. This loan is available to private sector however to limited selected Public Listed Companies, Government Link Companies, Multinational companies, Private Education companies and Certified Professionals. The list is defined by MBSB. You will need to have at least 2 years permanently employed to be eligible for the loan.  The minimum salary for the loan application is RM 3,000.

Repayment

Repayment for the loan is to be done via Direct Salary Deduction , or Biro Angkasa program

Repayment table

MBSB Personal Loan repayment table

Pros

  • Very high financing amount at RM 300,000. Also dependent on factors such as borrower’s income

Cons

  • Limited to selected private companies

 

 

MBSB Mumtaz-i Public

 

MBSB Mumtaz-i for Public Sector
Interest at  ECOF-i – 2.0%  which is 3.66% p.a flat rate for around 10 years
Maximum RM 250,00 Financing available
Maximum 10 years repayment
Government servants only

MBSB Mumtaz-i is a personal loan that is catered for borrowers from Public servant which consists of selected permanent GCLS, and Government servants. This personal loan is Shariah complaint with no requirements for guarantor and collateral. One can loan a maximum of RM 250,000 for Mumtaz-i.  The interest rates of this loan is much lower as repayment is done via salary deduction schemes such as Biro Angkasa and Auto Salary Deduction.

This package offers one of the lowest interest rates for MBSB Personal loans.

Charge and Cost

Takaful is optional with this loan.

Eligibility

MBSB Mumtaz-i is only available for public servants only. This loan is available for anyone from 19 years old until 60 years no exceeding retirement age.

 

 

MBSB Afdal-i

MBSB Mumtaz-i for Public Sector
Interest at  ECOF-i + 1.0%  which is 4.40% p.a flat rate for around 10 years
Maximum RM 400,00 Financing available
Maximum 10 years repayment
Government Contract servants only

MBSB Afdal-i is offered to contractual Government staffs and selected GLCs. This loan offers as high as RM 400,000 financing. Repayment of the loan can be done with Biro Angkasa or Salary deduction

 

Documents needed 

Employed

  • Copy of MyKad ( Back and Front)
  • Most recent 3 months salary statement
  • Most recent 3 months bank account statements
  • Most recent BE form or EA form or EPF statements
  • Employment confirmation letter

Self Employed

  • Copy of MyKad (Back and front)
  • Business Registratio Forms
  • Most recent B form and LHDN receipt
  • Most recent 6 months bank statements

Things you should know about MBSB

MBSB stands for Malaysian Building Society Berhad has been around for over 50 years and is providing financial services to Malaysia. Although not being a bank, MBSB is an Exempt Finance company allowing it to operate finance based business ranging from savings account to student loans while not operating under Bank Negara’s policy. MBSB  is actually very much owned by EPF and Malaysian government.