It was less than a decade ago when the interest rate for PTPTN dropped from 3% to 1%. After the recent elections, opportunities to defer your payment was available. It’s temperamental.
The PTPTN Education loan scheme is crucial for the development of Malaysia. The price of education is hefty, we know that. But with 600,000 Malaysians who have yet to pay their loan, we are still unaware of the consequences. The terrain is uncertain. So we’ve put together this article with everything you need to know to plan a strategy. These are 3 things to know about PTPTN and what you can do.
1. Updated information 2018
The recent elections in Malaysia made major international headlines. The government body that ruled for 6 decades had its first defeat. With a new government comes new decisions. The PTPTN education loan had massive changes.
Before this change, PTPTN has had problems with people dodging and refusing to pay their loan. 1.9 million borrowers are due to pay back their loan. This has put a noose on the availability of the loan for other Malaysians.
The effort taken by PTPTN to ensure borrowers pay back their loans are all for naught. This included tainted credit records, barring from leaving the country and passport bans. But, this is not the case from the new government’s initiatives. All credit records are clean, you can now renew your passport and leave the country. Is this good or bad for the country? All we know is that it’s very optimistic.
This strategy is an optimistic belief that ‘New Malaysians’ will return their loans. With this fresh start, let’s see what else can ease our situation.
Getting 20% off your entire loan if you make a full payment by 31st December 2018 is still available. There is also another incentive in which paying 50% of your loan in one sum can get you a 10% discount. These incentives are superb. You don’t have to be a part of the 36 billion in unpaid loans if you use this to your advantage.
Also, Pakatan Harapan fulfilled their promise of lifting the burden of PTPTN borrowers. Before August 2018, fresh graduates could update their information on the PTPTN website. This would allow them to defer their payment if their salary was below RM4,000. The application date has now closed. Now, deferring is something we encourage if you have no means to pay your loan. But let’s talk about it.
2. Deferring your payment.
Malaysians who had to opt for deferring due to a salary below RM4,000, was it a wise decision? In some ways, yes. But before we start, deferring your PTPTN loan has different terms for different situations. As decisions are being made, terms change quite a lot. Contact your financial planner or the PTPTN office to find out more about terms of deferring.
Now, let’s break things down. If you would like to pay your PTPTN even with a small salary, you’re encouraged to. What good does deferring your loan repayment do?
It gives you time to manage your finances, find an adequate job and plan your loan repayment. By deferring your payment by 6 months to 1 year, you can lessen the burden on your wallet (for now) and focus on what needs attending. If you can’t find a job, you can appeal to receive a 24-month deferring period.
In what ways is the deferment of the loan for fresh graduates with salaries below RM4,000 good? It’s good because this gives you an undefined time limit to pay back your loan.
But, where does the damage go? The golden rule of taking a loan is the interest rate. As the Ujrah scheme only charges you 1%, you might take it for granted. Deferring your payment by a few years can hold back your opportunities.
Take into consideration the ever-rising inflation rate and loans that you will need for other investments. Yes, deferring will give you space to breathe but consider everything before you do so.
3. Are there other options?
Investing is a good place to start. But with low salaries and repaying a loan, you might find it difficult. You can begin repaying your loan at RM50 if you are still not capable. Either way, start paying your loan to get rid of debt as soon as you can.
You can begin investing in unit trust. Some banks can give you a higher percentage too. Don’t forget, it’s all about the right strategy. Investing in obtaining new skill sets can help you gain a higher salary.
You can also invest in a financial planner. Financial planners will figure out all the nitty-gritty details that you are too busy to look at. Skimping on your loan plan will backfire. You can get free consultations from a license financial planners to help you. Once you’ve secured all the different aspects of your financial safety you then can pay your financial planner. You can even pay through installments.
Whatever your situation is, you can always plan your way out. Focus on never acquiring debt again. Do your part for your country and everyone will thrive. Encourage your friends to pay their loans as soon as possible. It’s a blessing to have so many options in repaying your PTPTN loan. We as Malaysians should not take it for granted and in fact treasure the lenient system provided. Remember, there are more students every year who needed the help you received.
If you need help learning financial literacy or getting in contact with a financial planner, visit the website Smart Finance Malaysia for a free online consultation.
It’s a one-stop-shop that has free tools to track your finances.
Don’t forget! Plan, track and ask for help when it comes to your finances.