Koperasi Loans are arguably one of the most popular personal loans in Malaysia. However, they aren’t very well understood. Considering this, we’ve decided to highlight the most important features of this loan type. Here’s everything you need to know.
What Are Koperasi Loans?
Also referred to as cooperative loans, they’re a type of personal financing scheme offered by Foundations (Yayasan) that are available only to civil servants working in different arms of the government. This loan type is under the Cooperatives Act of 1993.
Management Of Koperasi Loans
These loans are usually managed or funded by cooperatives in Malaysia. They create these credit facilities either directly from their funds or source them from other financial institutions. Because of this, the resources of these institutions are somewhat limited. Some local banks that cooperatives rely on for funding in Malaysia include RHB Islamic IDSB and CIMB Koputri, among others.
Eligibility For Koperasi Loans
As we mentioned earlier, koperasi loans are almost exclusively for civil servants—individuals in this category range from those who work to employees of government-linked agencies and institutions. In addition, individuals should have been in the service of the said government agency for a minimum of six (6) months. Otherwise, they don’t qualify for this loan either.
Credit Criteria For Koperasi Loan Application
Unlike most personal loans, the credit requirements for securing a koperasi loan aren’t too steep. One likely reason is that it configures the repayments to deduct from the borrowers’ monthly automatically, so there’s less risk of non-payment. You’ll have less trouble securing this type of loan even if you currently have a high debt service ratio (DSR) or other current and demanding payment commitments.
Documents Required For Loan Application
Depending on the corporative loan provider, you may need to present several documents before the paperwork for the loan can be finalized. Some documents most koperasi loan providers typically ask for include;
- A clear photocopy of your National Registration Identity Card (NRIC)
- Valid bank statements
- Pay slip for the last three (3) months
- A verified letterhead from your government employer
- A valid copy of Tenaga, ASTRO, or any other utility bill
- A clear photocopy of your savings account book (the specifics of this may vary, depending on the lender).
Also, unlike most personal loans, you get a significantly longer loan repayment time frame with koperasi. It is because the loan tenure can stretch as long as ten (10) years. In contrast, it’s tough to get more than seven (7) years with conventional loans.
Like every other legitimate loan, you won’t be asked for any upfront payment to secure a koperasi loan. Where transactional fees apply, this is usually debited from the loan sum, making this type of loan more than ideal for most city workers. See one of the best koperasi loans in Malaysia right now here.