KUALA LUMPUR (Nov 11): Starting Jan 1, 2027, anyone applying for personal financing over RM100,000 must complete a 15-minute financial education module under Bank Negara Malaysia’s (BNM) revised policy, according to a BNM spokesperson.
Developed with the Credit Counselling and Debt Management Agency (AKPK), the module covers key topics like effective interest rates, penalty charges, and contract terms. It helps borrowers assess their finances, understand loan risks, and make informed decisions.
A BNM spokesperson said on Tuesday during the central bank’s Media Workshop on fostering fairer conduct among financial service providers, that the RM100,000 threshold reflects the bankruptcy limit and the higher risk of non-repayment.
Lessons from the RumahKu module for first-time homebuyers showed that 20% of participants delayed financing to reassess their decisions, demonstrating the module’s effectiveness.
“We want consumers to really self-assess whether they need the RM100,000 and to understand the consequences for non-repayment, which can lead to bankruptcy,” the spokesperson said. “The module will allow them to review their current debt obligations, assess affordability, and understand additional costs they may not initially be aware of.”
BNM’s revised personal financing policy also bans the flat rate and Rule of 78 methods for new loans, requiring lenders to use the reducing balance method instead.
This aligns with recent changes to the Hire Purchase Act 1967 to improve transparency and fairness.
With the reducing balance method, interest is charged only on the remaining loan, so borrowers pay less over time, unlike the Rule of 78, which front-loads interest.
The policy also strengthens disclosure of effective interest rates, affordability checks, and responsible lending, as nearly half of bankruptcies from 2020–2024 involved personal financing.
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