A personal loan is an unsecured loan borrowed from a bank, credit union or online lender that you can use for any reason you have, and you would need to pay it back in fixed monthly payments.
An unsecured loan is not protected by any collateral, so if you happen to default on the loan, the lender is not able to automatically take your assets.
A secured loan is usually protected with a collateral (most of the time it's your property), and the interest rate in this type is lower than an unsecured loan. It can be more risky because you might lose your property if you are not able to make the payments, so it's important to understand how secured loans work.
A conventional loan follows the Conventional Financing Principles where lenders lend to borrowers to make a profit from the interest charged on the principal amount. For property loans, the borrower pays an interest on the outstanding principal amount. Interest rates can be fixed or based on a floating rate (e.g. BLR, KLIBOR).
An Islamic loan follows the Islamic Financing Principle which avoids interest-based transactions (Riba), and instead introduces the concept of buying something on the borrower’s behalf, and selling it back to the borrower for a profit. In place of interest, a profit rate is defined in the contract. Like Conventional Financing, profit rates can be fixed or based on a floating rate (e.g. BFR).
Interest rates in Malaysia are usually charged on a flat rate basis. The flat interest rate refers to the type where the interest is charged on the original amount, thus having nothing to do with what was paid initially.
It's possible but can be very hard to get a personal loan if you're unemployed because all the banks will request to provide a proof of income. Usually the best loan terms and rates are often reserved for customers with a good credit history, and for those in employment.
Generally, banks are reluctant to lend to students, as they're unlikely to be employed any time soon and may struggle to make repayments on time.
A short-term loan is one which is scheduled to be repaid in less than a year and the interest rate for this type of loan will usually be higher than a long-term loan. However, at the end of the term, you pay less interest than the longer duration loans.