How to apply personal loan with bad credit?
Applying for a personal loan with bad credit in Malaysia can be challenging, but it is still possible if you follow the right steps. Here’s a guide on how to improve your chances of getting approved:
Step 1: Check Your Credit Score
- Obtain your credit report from CTOS or CCRIS (via Bank Negara Malaysia).
- Identify any errors or outstanding debts that may affect your loan application.
- If possible, clear any outstanding payments before applying for a loan.
📝 How to check your credit score?
- CTOS: https://www.ctoscredit.com.my
- CCRIS (via Bank Negara Malaysia): https://www.bnm.gov.my
Step 2: Choose the Right Loan Type
Since traditional banks have stricter requirements, consider alternative financing options:
- Bank Personal Loans (For Fair Credit Scores)
- Example: CIMB Cash Plus Personal Loan, Maybank Personal Loan, RHB Personal Loan
- Lower approval chances if your credit score is too low.
- Islamic Personal Financing (Shariah-Compliant)
- Example: Bank Islam Personal Financing-i, Bank Rakyat Personal Financing-i
- Profit-sharing system instead of interest (suitable for Muslim borrowers).
- Online Fintech Loans (Fast Approval, Higher Interest)
- Example: Direct Lending, JCL Credit Leasing, Axiata Digital Capital
- Fully online application with minimal documentation.
- P2P Lending (Alternative Financing)
- Example: Funding Societies, CapBay, MoneyMatch
- Investors fund your loan instead of banks.
- Licensed Money Lenders (Higher Interest, Fast Cash)
- Example: KPKT-registered lenders
- Check the KPKT website for legitimate lenders: https://www.kpkt.gov.my
❌ Avoid loan sharks (Ah Long) – they have extremely high interest rates and use aggressive collection methods.
Step 3: Prepare the Required Documents
Most lenders will require the following:
✅ Identification documents – MyKad / Passport
✅ Income proof – Payslips (3-6 months) / EPF statements
✅ Bank statements – To show regular income flow
✅ Employment letter – For salaried employees
✅ Business registration (SSM) – If self-employed
Step 4: Apply for the Loan
- Banks – Apply online via official websites or visit a branch.
- Fintech Platforms – Submit an online application (e.g., Direct Lending, Funding Societies).
- Licensed Money Lenders – Apply through KPKT-approved lenders.
📝 Bank Loan Websites for Application:
- Maybank: https://www.maybank2u.com.my
- CIMB: https://www.cimb.com.my
- RHB: https://www.rhbgroup.com
- Public Bank: https://www.pbebank.com
- Bank Islam: https://www.bankislam.com
- Direct Lending: https://www.directlending.com.my
Step 5: Improve Loan Approval Chances
✅ Apply for a lower loan amount – Easier to get approved.
✅ Consider a guarantor or co-signer – Someone with good credit can help you secure better rates.
✅ Offer collateral (Secured Loan) – Some banks allow loans with property or car as collateral.
✅ Ensure stable income – Lenders prefer borrowers with consistent income sources.
Final Tips
- Compare interest rates and repayment terms before choosing a lender.
- Avoid taking multiple loans at once, as this may lower your chances of approval.
- Check the lender’s credibility to avoid scams or illegal money lenders.
By following these steps, you can improve your chances of securing a personal loan in Malaysia, even with a bad credit score.
