Education nowadays can get expensive but there are multiple ways for students to finance their education. One of the options is education loan.
In Malaysia, students can count on educational loans from the National Higher Education Fund Corporation (PTPTN) to finance their diploma, degree and Master’s courses at selected private institutions and all public institutions.
Moreover, the loan that you repay after graduation will help finance the next group of students looking to further their studies.
There are two options for you to consider when repaying the loan. You can opt for the conventional repayment option, which has a 3% service charge on the current reducing balance.
The other option is the Ujrah repayment option, which has a 1% service charge on the latest outstanding balance.
In recent months though, the Higher Education Ministry has extended the moratorium on PTPTN loans. This extension is borne out of the need to lessen the repayment burden of borrowers during the COVID-19 pandemic.
Here we share with you some useful tips on how to repay your PTPTN loan and become debt free.
1. Know the Terms and Conditions of Your Loan
Before you sign up for a PTPTN loan to study in a university or college in Malaysia you have to read the loan agreement. These loans come with terms and conditions that you need to take note of. Knowing the details will enable you to know what to do when action is needed to be taken.
For the conventional repayment plan, monthly installments increase progressively during the first 5 years of the repayment period. With the Ujrah plan, your monthly payments are the same each month.
2. Be Disciplined and Consistent
Being financially disciplined will help you in the long run. Be clear about what you owe and be consistent with payment. Be disciplined enough to pay back the stipulated amount in the loan agreement and at the exact time.
For instance, the payback period for the conventional repayment plan depends on your monthly amount while the Ujrah repayment plan takes a longer time and it’s fixed.
3. Opt for Salary Deduction
Paying back the PTPTN loan via salary deduction is one of the safest and best ways of ensuring your loan is repaid without hassle.
During the PTPTN application process, the amount that is deducted from your salary is determined. This gives you a clear understanding of how much you are expected to pay each month. To apply for a salary deduction, visit https://www.ptptn.gov.my/potonggajionline/ and follow the steps provided.
4. Pay Over the Counter
Making your repayment over the counter is another option that you should consider since it is readily available everywhere. You can do this at Digi kiosks at various Digi stores in Malaysia, counters at Bank Islam, POS Malaysia, Bank Rakyat, CIMB Bank and Bank Simpanan Nasional (BSN), e-pay service at KK Mart, Caltex, Mydin, PAK GROCER, Petron, myNews.com, etc. You can make payment at PTPTN counters across Malaysia and they are free.
5. Repay via the PTPTN website
Instead of visiting PTPTN counters which can be cumbersome during this current pandemic period, why not pay online? Aside from a smooth and hassle-free repayment, you won’t have to pay any extra fees when you pay on PTPTN’s website. Alternatively, you can also make payment directly through any online banking portal in Malaysia that supports PTPTN loan repayment.
6. Know the Consequencesof Not Paying
Loan defaulters will face penalties. It may negatively affect your credit score or you could be prevented from travelling overseas. The negative impact on your credit score means lower chance of approval for a new loan or credit card. Knowing these penalties of defaulting can be enough motivation for you to make payment on time.
7. Pay More than the Monthly Stipulated Amount
For those on the conventional repayment plan, paying extra consistently will help you repay the loan earlier and save money on the interest. For the fresh graduates who do not earn enough to do this, you can consider the Ujrah plan which has a flat rate for monthly installments.
Make sure you meet the financial agency to restructure the repayment agreement to get a suitable repayment amount.
In a Nutshell
Taking the PTPTN loan will help you attain the education you want. Despite the current challenges, there are various ways for you to make your loan payment and avoid future penalties. In doing so, you will help the next generation of Malaysian students who also want to further their studies just like you.
For more information on higher education and how to lower the cost of it, check out our Pathway Match tool.