How PTPTN payment record affects home loan? Way to Remedy it !

The PTPTN (Perbadanan Tabung Pendidikan Tinggi Nasional) loan is a government education loan scheme made to aid Malaysian students interested in pursuing higher education. Not to be confused with a scholarship, the PTPTN is more like a loan with an incredibly low interest rate.

Unfortunately, the low interest rate was abused through and through, and a large amount of borrowers tend to defer repayments even after graduating. Without stating the obvious, graduates who do not repay their loan are off to a bad start, possibly resulting in their inability to obtain a home loan.

What happens to a PTPTN defaulter?

1. Your CCRIS will be affected.

Not quite as scary as Ah Longs, the very mention of CCRIS still invokes fear in some people especially if they default on their loans. This is because it is now PTPTN’s practice to list the names of borrowers in the Central Credit Information System (CCRIS). Once their names are blacklisted, BAM, things will pretty much go downhill from there if not remedied.

Why? Consider this: before banks give out loans, they do a background check of applicants, specifically their CCRIS records. When they see the the many months of bad repayment, the banks will reject the applicant’s loan.

As long as borrowers are prompt in servicing their PTPTN loan, the agency will improve their credit reports. This shows that the borrowers are now responsible credit users, and therefore deemed worthy of their loan.

2. Loans get rejected one by one.

Defaulting on your PTPTN student loan will bring on disastrous repercussions that may snowball in the future.

Also, some employers and landlords have been known to check an applicant’s credit report before offering a job or leasing out their property. More importantly, besides increasing the likelihood of being rejected by banks when you apply for a credit card or personal, you will also have to face the possibility of not being to own a house thanks to your spotty CTOS or CCRIS report.

3. You miss out on good deals like the Rumah Selangorku affordable housing projects.

It was recently discovered that more than half of those who applied for Rumah Selangorku projects had their home loan applications rejected due to their debts with the National Higher Education Fund Corporation (PTPTN).

This is quite a shame because these beneficial housing projects were designed to help those in need of affordable homes, but being a defaulter, it is likely that you’ll have to skip it.

So beware the perils of being blacklisted for defaulting on your PTPTN loan. The state of your unhealthy credit will deeply affect your ability to obtain a credit card as well as car and home loans.

Luckily, there is a way to get yourself out of this conundrum.

How to remedy PTPTN bad repayment record?

To improve your CCRIS report, borrowers should clear any arrears in their PTPTN loan by making regular monthly repayments (and consistently too) in accordance to the Repayment Schedule (JBB) set by the agency. If you face financial difficulties, a negotiated with PTPTN is possible in order to have the debt restructured, thus making monthly contributions more affordable.

Step 1: See your PTPTN officer.

Step 2: State your problems and negotiate a loan restructure scheme with minimum monthly payment.

Step 3: Pay an agreed minimum amount (usually 50% of the arrears), receive a letter from PTPTN and forward to your appointed bank prior to applying for a home loan.

With consistency and determination, your CCRIS report would ideally revert back to ‘0’.

Very important tip! Be upfront. Not playing hide-and-seek with the elephant in the room can certainly help you be more proactive. You should also acknowledge that this is a legit issue by producing your PTPTN letter and aim to repay your student loan rather than sweep it under the rug.

1.3 million PTPTN borrowers are committed to repaying their loan. Are you one of them? According to the NST, as of April 2017, there are as many as 1.3 million PTPTN borrowers who are on track towards repaying their debts. The good news is, the outstanding loan amount from these “good” borrowers currently stands at RM10.9 billion. Not a bad feat, huh?

Eh, got discount ?

Yep! In true Malaysian style, we have one last bit of good news. A quick check on the PTPTN website told us that discounts are very much POSSIBLE under various incentives:

• If full payment is made, 15% discount is given
• If one payment to settle at least 50% loan is made, 10% discount is given
• If repayment scheme is adhered to through salary deduction or Direct Debit, 10% discount is given

**just for reference, update ptptn official website for the latest discount package

So if you aspire to be a homeowner, do work on first repaying your PTPTN loan before applying for that much-needed home loan. Good luck, and may the financial force be with you. 

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Any station in your area listed in MRT Line 1,2,3 ? Have a look here

The Klang Valley Mass Rapid Transit (KVMRT) System is set to be one of the most important and largest transport infrastructure projects Malaysia has embarked on. The KVMRT project will see the construction of three MRT lines; MRT Line 1, MRT Line 2 and MRT Line 3.

MRT Line 1

The MRT Line 1 Sungai-Buloh Kajang Line begins from Sungai Buloh and runs through the city centre of Kuala Lumpur before ending in Kajang, spanning 51 km with a total of 31 stations along its route. Phase One of the MRT Line 1 from Sungai Buloh to Semantan will be open to commuters by the end of 2016, while Phase Two, from Semantan to Kajang will be in operation by July 2017. 

 

MRT Line 2

The Government has allocated RM28 billion for the implementation of the MRT Line 2 for the Sungai Buloh-Serdang-Putrajaya link. There will be 37 stations, 26 of which will be elevated with 11 underground stations.The initial phase of the line between Sungai Buloh and Kampung Batu is due to be operational by July 2021 and the remainder of the line from Kampung Batu to Putrajaya Sentral is scheduled to be opened by July 2022.

MRT Line 3

The MRT Line 3 which is part of the third and final line for the Klang Valley Mass Rapid Transit Project is at its planning and development stage. The announcement of the project will be revealed at a later date.

Ps. The MRT Corp tender announcement followed Prime Minister Datuk Seri Najib Razak’s Budget 2018 speech on October 27, where he said that the government will expedite the construction of MRT3 and expects it to be completed by 2025, earlier than the initial target of 2027.

More information about MRT :

I) Fares range from RM 1 to RM 3.90 between Sungai Buloh Station and the Semantan Station. Only cash and Touch ‘n Go cards will be accepted. MyRapid card will not be useable on the SBK Line.

II) Senior citizens, the disabled and students are entitled to 50% discount. Tokens with the concession fare will have to be purchased from the customer service office.

III) Several of the park-and-ride facilities have also begun operating on 16 December. This includes Sungai Buloh station, Kwasa Damansara station, Kwasa Sentral, Bandar Utama and Pusat Bandar Damansara.

IV) According to MRT Corp, the four-car train sets with the capacity of 1,200 passengers and the line can cater up to some 400,000 passengers per day, with a headway (train-to-train gap time) of 3.5 minutes.

All information just for reference, vary due to news update time to time. 

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6 Property Investing Tips!

Neighborhood: The quality of the neighborhood in which you buy will influence both the types of tenants you attract and your rental rate. For example, if you buy in a property near with good security, higher property price in surrounding township, high quality of neighbourhood would be built such as Bangsar, Taman Desa etc . However, if you have limited budget for property investment, more focus on security aspect. 

Property Taxes:  Property taxes are a critical concern, as an investor planning to make profit from sale, you want to be aware of how much you will be losing in paying tax. High property taxes may reduce your profit seriously. Check out more on Real Property Gain Tax (RPGT) ,different charges imply on property for the sale within 5 years after SPA signing. There is several ways can avoid RPGT too. [check out more in our page]

  

Security & Crime: No one wants to live next door to a hot spot for criminal activity. Go to the police or the public library for accurate crime statistics for various neighborhoods, rather than asking the owner who is hoping to sell the property to you. You can filter some property with good management or security offers such as 2-tier or 3-tier security provided with physical guards station, access card scanning in lobby and lift, guard house filtering and boom gate. (Most of the condominium maintenance fees including security services)

Segmentation of Market: Locations with growing employment opportunities tend to attract more people – meaning more tenants. Existing or new development of mall, office buildings or shoplots will bring up the demand of working class tenants. Some of the working class tenants will prefer properties that are reachable by public transport. If you prefer with family-sized tenants, more accessibility or better environment is an extra advantage. If you're targeting for students market, a property within 5km or walking distance to famous university or college will be a good option for you.

Future Development: The municipal planning department will have information on all the new development that is coming or has been zoned into the area. If there are many new LRT or MRT stations, business parks or malls going up, it is probably a good growth area. These new development might help in boost up the area population and make it an hot-spot area. However, some additional new housing could also provide competition for your property. If the new housing is different category (eg. Rumah WIP/ higher or lower 200k in property price) with the property you intend to purchase, it shouldn't be a problem. 

Rents:  Rental income will be the bread-and-butter of your rental property, so you need to know what the average rent in the area is. If charging the average rent is not going to be enough to cover 80% of your mortgage installment payment, then you have to keep looking. Nowadays, property market hard to get 100% coverage rate for installment unless grabing an under-construction project will do as you buy in with current year price for future property. Check out more on rental return with  Return On Investment (ROI) formula. (more information regards ROI from our page)

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Top 4 reasons why banks decline your home loan

Here are the top four reasons banks might decline your loan application:

1. High Commitment
You have high commitments compare to what you are earning monthly. If you’re earning RM5000 monthly and utilised more than 70% of this income, you’re creating a higher risk for the banks. People with high commitments tend to struggle when bad economic hits and it is a bad business for the bank. Every bank has a sensible borrowing guidelines to minimise the risk.

2. Bad credit
Again, if you have a poor history of paying loans or repaying credit card, a bank is not going to trust you to pay off a home loan. Clean up your act by settling your debts and paying off credit card bills promptly, so you come across as a more realistic prospect for lenders.

3. Low Income & Unstable Employment
Banks will be looking closely at your employment background to confirm whether you have a steady employment and a regular income. Unstable employment normally means you work less than one year with the same company and frequently change job. If you’re a fresh graduate, it’s understandable. But, if you have been working for years, changing job too often is not a good thing.

Good income normally means you are earning more than RM10,000 and manage your commitment low. If you’re earning more than RM5000 monthly and kept your commitment low, you are considering favourable to the bank.

However, if you’re earning less than RM3000 monthly, you will be perceived as a higher risk borrower and your loan application may be declined on these grounds.

If you are currently unemployed, your chances of being approved are extremely low, as you cannot repay a home loan if you do not have a viable income – and do you want that additional financial stress while you are out of work? Once you have a steadier employment history, banks will look at you more favourably!

4. Property Location
Not all the properties in Malaysia are favourable for a bank to finance. A Bank will prefer to finance a property that has potential increase in value and has reselling value. If your property located at landslide area, oxidation pond, flood, near high cable tension or with any negative factor, it’s will not favourable to the bank.

Even you have the best credit background and earning thousand of ringgit if the property location is not favourable, your loan will still be declined.

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