Let’s focus on the students who are currently taking the PTPTN loan, and we have interviewed many of them from different universities to get into their minds and learn more about their understanding towards their existing PTPTN loans.
Based on our interviews, one of the most common reasons they opted for a PTPTN loan is because they felt that they’re out of other options. However, it is wise to take a step back and think through your options before applying.
The 1st option will always be borrowing from your parents or family members.
The 2nd option to go for would be scholarships. A scholarship normally does not require a monetary repayment but it does require a bonding period which specifies how long you are required to work for the company providing the scholarship.
The 3rd option will be a PTPTN loan because it is easy to apply for and offers a low interest rate which we are going to discuss more in this article.
The last option to go for is a study loan from a bank. It offers a larger loan amount which is also available for overseas study, but this type of loan does come with a higher interest rate. For example, OCBC educational loan charges 6.5% interest per annum.
It is important to keep in mind that if your scholarship provides tuition fee discounts automatically from your university, you will most likely still be eligible for PTPTN. However, if your scholarship falls under a third party sponsorship program, there might be a certain clause in the agreement which will prevent you from taking PTPTN.
For example, one of our interviewed students has to choose between her dad’s company scholarship or PTPTN and she decides to go with PTPTN because it offers more benefits. You should always check with your university council to further clarify the terms and conditions.
The repayment period of the PTPTN loan has a grace period of 6 months, you will not be charged Kos Upah with 1% flat interest if you finish all the repayment within this period. 1% flat interest is an absurdly low amount for a loan but many students seem to forget that they still have to pay it back.
Will you pay less monthly for a longer repayment period or pay more each month for a shorter period? Let’s say if you have an RM50,000 loan payable in 15 years with a minimum payment of RM319.44 per month, should you place your extra cash in a Fixed Deposit Account to gain interest or pay towards your PTPTN loan to settle this debt faster?
Based on the calculation above, you will have savings of RM34,744.01 after 15 years for Option 1. However, the advantage of Option 2 is that you will have an extra cash flow of RM458.33 per month for 5 years after shortening your repayment period to just 10 years instead of 15 years.
If you start saving your extra cash after repaying your PTPTN loan immediately, your savings amount under Option 2 will still not be able to exceed the savings amount under Option 1 because you started depositing later. Nevertheless, there are two more things that you should keep in mind when choosing a repayment plan. Firstly, the extra cash flow from Option 2 might be useful for you for a period of 15 years. Secondly, your debt service ratio will be higher under Option 1.
The majority of the students we interviewed were not sure of the long-lasting punishment if they fail to pay back their PTPTN loans, and most of them didn’t have a positive plan to pay back. If you fail to pay back, you will be blacklisted which means you will be restricted from renewing your passport and unable to leave the country. This might affect your working trips, and being unable to travel abroad, for this reason, seems unrewarding. On top of that, this will be reflected on the CCRIS (Central Credit Reference Information System) which will affect your approval on the future home loans, personal loans and car loans.
Learn more about The Real Consequences Of Not Paying Back Your PTPTN Loan.
Yes, PTPTN is still the best study loan available to Malaysian students. It is important to always learn more about the PTPTN loan that you’re applying for and to appreciate its encouraging benefits for helping students to obtain their educations which is critical for the growing demands of higher education in the working places. There are many spending habits that can be adjusted during your repayment period, so spend wisely and keep the PTPTN loan running for the future generation.
If you have more questions, don’t miss our “Top 6 Questions About PTPTN” article.