KUALA LUMPUR: Bank Negara will not review its directive on the maximum personal loan repayment period of 10 years, as doing so would burden the loan applicant unnecessarily.
Governor Tan Sri Zeti Akhtar was speaking in response to Congress of Unions of Employees in the Public and Civil Services (Cuepacs) and the National Cooperative Organisation of Malaysia’s appeal to the Government to consider reviewing Bank Negara’s ten-year repayment period to 15 years.
"No, there will be no revision.
"In the world, 10 years for a personal loan is the highest. It is usually about six years in other countries,” Zeti said after the closing ceremony of the 5th Annual Global Policy Forum by the Alliance for Financial Inclusion.
“When a person borrows to either pay for a television or a wedding, that is squandered within a few days,” she said, “(If the repayment period is longer) he or she will then have the misery of owning that loan for 15, 20 or 25 years for what they spent in a few days.”
Zeti pointed out that personal loans are different from housing loans, where applicants eventually own an asset after repaying the loan.