A Potentially 12% Interest Loan

Posted by Kris | Monday, March 17, 2014 | | 2 comments »

money loan advert
Microloan of RM200?!

Receiving a lot of pamphlets from the banks offering the consumers money. Here is one value added feature given to HongLeong account holders the opportunity to have a small credit line of RM200 at 0% interest as shown in the ads.

But wait a minute..0% interest?

See the fine print; There is a surcharge of RM15 per usage of the credit line. Assuming you use the entire RM200, a RM15 is actually 7.5% interest!! If you use less than RM200, the percentage of interest is even higher.

Wait, why do i say it is a 12%??

There is a late payment fee of RM1 every 3 days up to RM9. So if a person needs RM200 credit, it is highly likely he/she is desperate and will be slow to pay up.

So total of charges can be RM15 + RM9 = RM24 which for RM200 is actually 12%.

Late Payment FeeRM1 every 3 days, up to a maximum of RM9

In irony in life is that when you are rich , the banks will be throwing you money here and there offering loans you don't need, but if otherwise, you cannot depend on the banks to loan the money, as they don't want to let you the money!!

Nevertheless, I have no idea what is the market segment this bank is targeting. RM200 is just too small amount for anyone to make use of. It is like micro-credit to 3rd world countries. Not sure how much profit they are aiming and also it is definitely not worth the time and money to pursue a person owing RM200!! 

More profits are to be made from credit card consumptions :D Coincidentally, I got to know that this bank has one of the strictest requirements in the indusctry when it comes to approving credit cards!!! Double irony....


  1. ChampDog // 8:23 AM  

    This is a very good post. I think more people must aware of this. This is exactly my father in law fall into this trip. He told me, the banker told him there isn't any interest.

    Hey, this RM 200, you can get it many times right. It is not small. If too big, it scares people, that's why this trick works perfectly! Just RM 200 fast cash right, why not? You just don't need to think too much for that!

  2. Kris // 11:05 PM  

    Yes. Of course you can get it multiple times. That is the way to earn money.

    So I am wary to use standing instructions in this case. In case, suddenly tap the RM200, you need to pay the high "interest rate".

    There is nothing as free lunch in this world especially from the banks.