Wednesday, 26 June 2013

What is Koperasi Loan?

This article was first published on FreeMalaysiaToday website.

Similar to personal loan/financing offered by commercial banks, Islamic banks or DFIs (namely Bank Rakyat, Bank Simpanan Nasional and Agrobank), the interest/profit rate of this so-called credit cooperative loan is based on FLAT RATE!

Apa maksudnya? Kadar keuntungan/bunga tahunan dikira berdasarkan kepada jumlah pinjaman/pembiayaan, bukan seperti pinjaman/pembiayaan perumahan yang berasaskan "monthly rest".

So, extra careful whenever you think of applying for one :)

Apa-apa pun, adalah lebih baik mendapatkan pinjaman/pembiayaan peribadi daripada institusi kewangan dan koperasi daripada berhutang dengan ahlong.

Koperasi Loan?
June 26, 2013
It is a personal loan for employees of the government, statutory bodies, selected government-linked companies and municipal councils.
Are you an employee working in a government department, a statutory body, a government-linked company or a municipal council?  If you are, you could be one of the lucky Malaysians who qualify for Koperasi Loan – an easy-approval, low-interest loan with an ultra-convenient loan-repayment mechanism.
What is a Koperasi Loan?
A Koperasi Loan, or Credit Cooperative Loan, is a type of loan that is reserved specifically for workforce of government departments, statutory bodies, selected GLCs and municipal councils of Malaysia.
The amount that can be borrowed from a typical Koperasi Loan starts from as low as RM1,000 all the way up to RM250,000 (and sometimes even more).  Loan periods range from one year to 25 years.
As a financial product, a Koperasi Loan resembles a personal bank loan in almost every way.  It involves the lending of a sum of money from an institution to a borrower, at terms which are agreed upon by both parties.  And just like any personal loan, a Koperasi Loan can be taken for any purpose: from settling a debt, starting a business, getting married, buying a home or a car, financing your children’s education to taking a holiday, just to name a few.
Ultimately, the greatest difference between a Koperasi Loan and a conventional bank loan lies in the fact that the terms of a Koperasi Loan are usually much more flexible and “borrower-friendly” for those who are eligible to apply.
Key differences
Interest rate: Generally speaking, the interest rate of a Koperasi Loans is almost certainly much, much lower than that of a conventional bank loan.  As at June 2013, the lowest prevailing interest rate for a Koperasi Loan is 3.99%, compared to 7.6% for a consumer bank.
More flexible criteria:  Koperasi Loans are, on the whole, more lenient in the approval process compared to conventional bank loans.  In fact, Koperasi Loans can even be approved for borrowers with bankruptcy status, as well as those who could not get loans from banks due to less-than-desirable track records in the Central Credit Reference Information System (CCRIS) and the Credit Tip-Off System (CTOS).
Repayment method: Repayment for a conventional bank loan is done at a bank branch, via an ATM or through some form of direct-debit arrangement from a bank account.  Repayment for a Koperasi Loan is much simpler – it is conducted via direct deduction from one’s salary.
Loan payout: An important thing to take note about Koperasi Loan is that it does not disburse 100% of the loan amount to the borrower.  Usually, a percentage of the loan amount is retained, which can be interpreted as “one-time charge” incurred by the borrower.  The percentage retained can be up to 10% of the loan amount, or more.
Where do I get a Koperasi Loan?
There are many different types of Koperasi Loans all managed by different cooperative entities.  To apply for one, you could either approach such entities or go through an authorized agent.  An easier alternative is to use iMoney’s Koperasi Loan comparison table, where you can compare the rates and apply for one online at no charge.
This article is brought to you by iMoney, a price comparison website dedicated to helping Malaysians make the best use of their money. Check out their loan comparison tool here to compare interest rates across all Malaysian banks.

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