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Personal loans are indeed still possible for those who get by on small incomes. You just have a few more things to consider before getting one in comparison to in the future when your finances are in better order. Without further ado, here are some items worth considering before you take up a personal loan:

Choose a Longer Tenure

Some people dislike being saddled with debt and wish to be rid of them quickly, if at all. However, if you currently earn only a small income, you might want to go for a personal loan with a longer tenure. This will keep your monthly installments lower, which will allow you to stretch your ringgit without snapping it. You can pay more than your minimum installment amount in the future when you can better afford it, provided your bank allows you to do so.

Get Lower Interest Rates

The interest rate imposed on your loan will affect the amount of money you’ll ultimately repay to the bank that approved your personal loan. While shorter-tenure, higher-interest-rate loans might sound appealing due to the lower interest costs, you might be biting off more than you can chew and end up in worse financial straits than before in the form of late payment charges. You might want to play it a little safer instead and go with a longer-tenure, lower-interest rate loan instead. You’ll end up paying more in interest costs, but the loan will also be more affordable and suitable for your current budget. Of course, if you can find a loan with a lower interest rate and the same tenure, by all means go for it if you can!

Get a Guarantor

A guarantor is a person who gives a guarantee that they will pay your debt if you happen to default on your personal loan. Of course, this is a very risky undertaking, so you might understandably find it difficult to secure one. Nevertheless, some banks may require you to have a guarantor before granting you a personal loan. This might happen if you’re earning a really low income that is below their minimum income requirement, if you have a bad credit history, or if you’re looking to borrow a huge sum of money, in the opinion of the lending bank.

Get a Takaful Plan

Your personal loan, once taken, has to be repaid even in the event of your permanent disability or death. If you pass away, your estate – the assets and monies that you own – will be used to pay your loans, and this might inconvenience your loved ones who will see their inheritance reduced through no fault of their own. One way to prevent this from happening is to take out a Takaful plan, which might actually be insisted upon by some banks. A Takaful plan is a type of insurance cover that will repay your loan if you end up permanently disabled or dead. As a bonus, your Takaful contribution can even be deducted from your loan amount!


So, you see, personal loans aren’t impossible even though you may be earning a starting-level salary or income. You just need to consider the loan more carefully first!

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