10 Situations to Avoid Getting a Loan

It is unwise in the following situations to obtain credit and get into debt. It will jeopardize your finance during an emergency situation like when you are out of work


1. No regular income: When your income fluctuates from month to month there is no way to do a budget and include the repayments of the loan into your monthly outlay. It is also unlikely for you to obtain a loan without a regular source of income 

2. Not within your budget: Don’t get a loan when there is no extra fund to meet monthly repayments 

3. Live a more expensive lifestyle: When you can ill-afford to eat out at high-end restaurants and buy branded goods, you still can satisfy your hunger in a less expensive way. The cost of branded goods includes frequent advertisements and a higher margin for profit. A less expensive brand is just as good without the high cost of advertisement and a lower profit margin.

4. Replacing household items that are still in good working order: When you have the means there is no problem but don’t get a loan to replace electrical appliances or TV which are still in good working conditions.

5. Change a three-year-old car to the latest model: The car is in tip-top condition, why raise a loan and incur unnecessary debt and pay interest?

6. Getting things you want: Borrow money to satisfy your ego? It’s a stupid thing to do.

7. Sending your children overseas for further education: If it is within your means to study locally why incur a debt to send them overseas? Do you think it is a good thing to pledge your house to finance your children’s education abroad?

8. Throw a party to celebrate an occasion: Who cares about your celebration? Just do it among family members. Don’t get a personal loan just to spend it.

9. A holiday abroad: Have a good time locally instead of getting into debt and paying interest. Malaysia is one of the top ten destinations for holidaymakers. Discover more about your own backyard.

10. Renovate your house: Don’t beautify your house when it is in good repair even though the bank encourages you to take a loan as the value of your property has appreciated over time. 


The only good thing to raise a loan is to get a roof over your head.

Source: http://www.allaboutlivingwithlife.blogspot.com/2010/08/10-situations-to-avoid-getting-loan.html

Reduce Your Expenses

Expenses

The financial crisis worldwide has devastated many rich people and worse still many others are out of a job and even more, are going to be unemployed soon. The situation is so bad that there are people who have resorted to taking their lives away to escape from the financial meltdown.

Count yourself lucky that you are still able to keep your job. It is time to review your spending pattern and reduce your expenses as the worst is yet to come.

Lifestyle changes: Examine your lifestyle. Are you still going on a spending spree?
No more impulsive buying and refrain from purchasing non-essential items. Don’t renew the gym membership. Cancel those subscriptions that you don’t have the time to read. Instead of going to the movies buy DVDs and watch them at home. Terminate your connection to Astro and watch TV programmes instead.

Food: Instead of eating out you still can buy your favorite breakfast food and enjoy it at home. Eat more often at home because home-cooked food is healthier and cost less.

Health: Give up smoking and drinking. Drink water instead of carbonated drinks. Maintain good health to avoid incurring medical expenses.

Utility Bills: Make it a good habit to switch off all electrical appliances when they are not in use. Use energy-saving light bulbs. Install a showerhead to take bath. Turn on the air-conditioner and the fan during the early hours of the night and then turn off the air-conditioner later and allow the fan to circulate the air in the room. Make sure that there are no leaky faucets at home.

Your House: Make minor repairs before they become major ones.

Credit cards: Keep only those cards without annual fees. Use your cards only to take advantage of savings. For example, you use a CIMB-PETRONAS card for petrol purchases and you use a Citibank-Giant card for grocery shopping at Giant.

Shopping: Buy house brand items instead of popular brands at cheaper prices and the quality is more or less the same.

Books: For storybooks loan from the library instead of buying new ones because you read only once.

Big-ticket items: When you need to replace expensive household items get a zero interest installment plan from your credit cards so that you can spread the payments up to 12 months or more. By doing so your monthly budget will not be impacted and there is no additional cost to you.

When you are careful in your spending you will soon develop into a thrifty habit.

Source:http://www.allaboutlivingwithlife.blogspot.com/2008/10/reduce-your-expenses.html

The Best Credit Card Deal at Ringgit Plus

There is an exclusive offer at   RinggitPlus When you apply online at their site for an HSBC credit card you will get a free tablet (Huawei Mediapad 7 Youth 2) upon approval of your application. This is in addition to all the goodies offered by HSBC as mentioned in my article, The Best Credit Card to Apply for Now.  The offer from HSBC includes an HTC smartphone and up to RM1199 cashback. The special offer from RinggtiPlus is valid from October 5, 2014, to January 8, 2015. You can read their terms and conditions here 

 RinggitPlus is Malaysia's leading comparison website. They offer comprehensive free services in the following areas:

Credit cards 

Personal loans and home loans

Savings, current accounts, fixed deposits

Home broadband plans

Dining, gadgets, fashion, household items discounts

Insurance: Travel Insurance, Critical illnesses, medical cards   

There is also a blog offers educational articles about financial matters

For all things relating to money it pays to visit this site first to get the best deal.  

Get your Credit Score at Credit Bureau Malaysia

Apart from CTOS and CCRIS database, you can obtain a copy of your credit report from Credit Bureau Malaysia. In fact, this is the only place to obtain your Credit Grade, Credit Score, and Probability of Default.

To obtain your copy of the individual credit report, you go to their website at https://www.creditbureau.com.my/  and then you click Self Enquiry Report followed by Individual Report;  you will see a Self Enquiry Checklist in three pages. Complete the form and sign on the second and third copy and then you email or fax the completed forms with the required documents. Before sending the documents remember to transfer RM2 to their account 512352604549 at MBB. You will receive your report on the same day by email.   

  

 I have got a credit score of 575 out of 900 and my credit grade is CC. The probability of my defaulting based on statistics and the population average, within the next 12 months is 4.54%. You can see the MySCoRE Assessment here:

According to Credit Bureau Malaysia, to maintain a healthy credit you should:   

1.     Always pay your bills on time

·         Even if it is the minimum payment

·         Late payments will affect negatively in your credit report
(eg: interest charges/outstanding amount may accumulate higher than the limit of credit)

2.     Keep the balance of your accounts/credit cards at least 35% of your total credit limit. (eg; Credit Card limit RM 4000, balance maintain at RM1400)

3.     Try to obtain a mixed form of credit. (eg; Housing, Hire Purchase, Credit Card)

·         A credit card is a very risky term of credit, hence obtaining a mixed credit term allows the lender to gauge you better.

4.     Don't apply for too much credit at once

·         The rule of thumb of 'everything in moderation' also applies to credit applications

·         Note that obtaining a lot of credit will, in turn, deem you as a risky customer/paymaster.

·         Note that the limit of the Credit Card is taken into account, not the outstanding for evaluation by the credit grantor

5.     Keep track of your credit report for at least 2 years

·         Regular checks help ensure that your credit information is intact /accurate.

The Best Credit Card to Apply For Now

I have already got three credit cards and I have also bought the cheapest smartphone in Malaysia recently; otherwise I will definitely apply for an HSBC credit card today.

According to their online promotion here, you will receive the following goodies upon approval of your application:

·         Swipe your HSBC credit card one time within 30 days from the date of the welcome letter, you get RM50 cashback.

·         When you are among the first 2500 new cardholders to spend RM1500 within the same 30 days period, you will get an HTC smartphone (model HTC Desire 210) worth RM499.

·         When you apply online you get additional RM50 cashback.

·         Waive the annual fees when you swipe your HSBC credit card for a minimum of 12 swipes in a year.

A useful tip to qualify for the Smartphone:

You can spend RM1500 wisely to qualify for the reward by buying a big-ticket item with a zero interest installment plan. Get a laptop or tablet or sign up for an online course and invest in yourself.

When you looking for a smartphone and a new credit card, look no further apply for an HSBC credit card now. The offer ends December 7, 2014. 

7 Smart Ways to Spend Money

You spend money every now and then, but how do you spend it wisely? Here are some tips to spend money meaningfully: 

1.      Buy what you need but not what you want: Your wants are unlimited but your resources are limited; it is best to live within your means to avoid overspending and getting into debt.

To be without some of the things you want is an indispensable part of happiness. - Bertrand Russell

2.      Buy things to enhance productivity: Technological items like smartphones, personal computers are tools to get information instantly and get work done faster and more conveniently like online banking and purchases.Where public transport is inadequate a car of the basic model is good enough to take you to your destination much quicker and save time.  

3.      Buy experiences to gain more than happiness: According to an article, Buy Experiences, Not Things,

 waiting for an experience apparently elicits more happiness and excitement than waiting for a material good (and more "pleasantness" too—an eerie metric). By contrast, waiting for a possession is more likely fraught with impatience than anticipation.  So treat your friend to a movie, go sightseeing, and have a lunch date with your co-worker. When you entertain others you are also networking and building a relationship.    

4.      Buy books and take courses as a personal investment: You take courses to gain new skills or sharpen your existing skills. Technical skills are essential for your career success. Books are food for your mind.  Books provide insights and broaden your horizon. You will be wiser and much more knowledgeable to deal with problems and make decisions. 

An investment in knowledge pays the best interest. - Benjamin Franklin.

5.      Buy quality products for durability:  Look for quality products like buying a pair of quality shoes to last at least a year rather than buying one that lasts for two months. Quality goods are not necessarily branded items that are more costly. So choose wisely,

6.      Buy below normal price: Buy at the right time such as during a sale, at a discount, or when the item is under a promotion or it is offered at a special price.  Using coupons and buying generic brands for household items are the way to pay less and get similar quality.

7.      Buy with your credit card: When you use the right credit card you are entitled to a rebate or cashback for your purchases. In this way, you pay less. CIMB Bank PETRONAS MasterCard is such a card. In their monthly statements, the discounts for your petrol purchases and other purchases are stated separately. You will be happy to save while you spend.      

A man who both spends and saves money is the happiest man because he has both enjoyments. - Samuel Johnson

Noteworthy quote:

In my early life I made two very important discoveries. In the first place, I discovered that making money was easy. And in the second place, I discovered that making money and spending it foolishly was completely meaningless. - Peace Pilgrim

Credit blacklist for 170,000 PTPTN defaulters unless repayments made, ministry says

Graduates who have defaulted on their National Higher Education Fund (PTPTN) loans will enter Bank Negara’s bad credit list next year unless they start repaying the RM1.2 billion borrowed from the government, Education Minister II Datuk Seri Idris Jusoh said today. Idris said these 170,000 PTPTN defaulters will be given a grace period of three months to avoid being listed in the Central Credit Reference Information System (CCRIS) – which could affect their chances of securing car and housing loans.

“When we announce the implementation of that move later, we will give a period of three months for the borrowers to discuss and then make payments before their names are listed in the CCRIS,” Idris was quoted saying by Bernama today.

In explaining Putrajaya’s revival of its plan to blacklist defaulters, Idris said that some borrowers had taken advantage of  PTPTN’s flexible policy and refused to make any repayments.

“We have the borrowers’ details and know that some of them have lucrative salaries but do not come to PTPTN at all within three years to discuss or make any payments,” he was also quoted saying.

Earlier today, Berita Harian reported that PTPTN will list defaulters in the CCRIS from next year onwards in order to regain the funds.

The 170,000 defaulters are said to owe a total of RM1.2 billion which they borrowed in the 1998 to 2010 period.

Many students borrow from the PTPTN but the fund is itself teetering under the burden of unpaid loans and has resorted to blacklisting defaulters so that they cannot leave the country.

In February this year, Malay Mail Online reported PTPTN saying in a recent statement then that as many as 468,592 borrowers have defaulted on their loans amounting to RM3.3 billion as of November 30, 2013.

The fund said that as of end of November it has issued study loans to 2.34 million people, totalling RM53.23 billion.

On August 21 last year, the Cabinet scrapped Putrajaya’s plan to list PTPTN defaulters in the CCRIS blacklist after the proposed move was roundly criticised across the political divide – including Youth and Sports Minister Khairy Jamaluddin.

Just a day before Putrajaya shelved the controversial proposal last year, Pakatan Rakyat leaders had threatened to kick off a nationwide protest campaign if the government continued with the CCRIS move.

The CCRIS is where information on borrowers to the Credit Bureau is stored. Credit data from financial institutions is automatically kept and processed in the CCRIS and subsequently synthesised into credit reports, which will, in turn, be made available to institutions upon request.

An individual with a bad credit report would automatically face trouble when applying for future loans with these institutions.

Source: https://www.malaymail.com/news/malaysia/2014/10/09/credit-blacklist-for-170000-ptptn-defaulters-unless-repayments-made-ministr/760437