The answer to that question is a resounding “Yes”, and the good news is that it’s not as complicated as it seems. Just run through this series of questions and answers with us and you’ll be an expert on the topic in no time.
How do overseas Malaysians differ from local applicants?
Local applicants are taxpaying citizens of Malaysia who hold an Employee Provident Fund (EPF) account and earning in local currency in a company located in Malaysia, unlike overseas Malaysians who reside and earn income in foreign countries.
What are the types of loans those living overseas can apply for?
Overseas Malaysians can apply for the same loans that are available to local Malaysians. You’re welcome to apply for any available loans offered in Malaysia, so do your research on the best loans available. You can even commit to credit cards or loan refinancing as long as you meet the banks’ criteria.
What documents do you require to qualify for a local loan?
Before applying for any loans, first you must make sure you have the following documents:
• NRIC number to prove you are 21 years old or above
• Your foreign employment pass and offer letter to prove you are a jobholder and that you have a stable earning source
• Your foreign payslips for the past three months as evidence of your income history
• Name of your foreign bank where your salary is credited along with bank statements (if required)
• Income tax returns in foreign country
• All the necessary documentation regarding your income and liabilities to assess your current loan commitments
• Must have at least one commitment in Malaysia in the form of either loan or credit card
Why do Malaysians living abroad need an existing commitment in Malaysia to take a loan?
It’s easy for banks to access information on locals for background check. However, the same cannot be said for overseas Malaysians. It can be difficult for banks to ensure that you are a legitimate client instead of someone who is indulging in fraudulent activity if you have no credit history or background in Malaysia. By having an existing commitment in Malaysia, banks will be able to verify your eligibility, legitimacy, and whether or not you are capable of repaying the loan.
Does your country of residence matter?
Banks prefer if you are residing in a neighbouring country like Singapore, but if you are staying somewhere farther away like China, Qatar or Dubai, then they will consider the economic stability of that country.
Does the type of company I work for matter?
Your chances are higher if you work for a multinational company compared with a foreign company the bank has never heard of. Banks tend to trust employees of reputable companies more, as this indicates you are a skilled employee and that there is less of a chance you will lose your job.
What should be my minimum income level to apply for a loan?
You should be earning at least an equivalent of RM3,000 a month before you think of applying for a loan
What should be my debt servicing ratio (DSR) for my loan to be granted?
The banks will look at how much of your income you spend on your daily household expenditures and how much on existing commitments.
The maximum DSR allowed by banks is 70 per cent out of which 30 per cent should be household expense and 40 per cent on other debt commitments. The lower the DSR the more favourable it is.
What are the additional requirements for a home loan?
To apply for a home loan, the bank will consider the type of land you plan to purchase. They will also demand that your existing commitment in Malaysia should be in the form of a loan existing for at least three years so that the bank is assured that you will service your loan instalments on time.
Also, paying your booking fee upfront goes a long way in influencing banks to accept your loan request. Additionally, it is favourable if you have a co-applicant in Malaysia, so that they have someone to go to in case of loan default.
What are the additional requirements for a personal loan?
It would be a plus point if you have owned a Malaysian credit card for the past six months. Use this as your existing commitment in the country. If you have savings in your account, that will also help in the approval of your loan application.
How much loan amount will I be granted by the bank?
For a home loan, you will be granted a maximum of RM400,000 to RM500,000. For personal loans, the amount depends on your monthly income. If you earn RM5,000 per month, then you can get up to five times the amount of your salary.
Can I apply to different banks for loans?
It is not necessary to apply for a loan at a bank that you are already engaged with. In fact, it may be a good idea to choose a different bank if you are offered a more favourable interest rate or terms and conditions.
This is true if you are looking to apply for credit cards, personal or home loan. However, if you’re refinancing a loan, you should stick to the same bank as all the terms and conditions for refinancing will be completely different elsewhere.
This article is courtesy of Loanstreet.com.my, an independent loan comparison and application website that also offers personal financing tips. Visit the website to learn more about your current financing options.
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