The Policy Document on Personal Financing aims to promote prudent and responsible financing practices with respect to the provision of personal financing by financial service providers, while encouraging responsible borrowing behaviours by financial consumers.

This Policy Document introduces new requirements to:

(a) ensure clear reporting by financial service providers with regards to Bank Negara Malaysia’s existing expectations on the application of the maximum tenure of 10 years for financing offered under a home financing product or secured by an unencumbered property for personal use;

(b) prohibit the offering of personal financing where interest/profit charges are computed using flat rate and/or Rule of 78 method;

(c) reinforce expectations for financial service providers to disclose the effective interest/profit rate to financial consumers; and

(d) ensure that financial consumers who apply for personal financing with amounts exceeding RM100,000 attend and complete a financial education module.

These requirements are set out under:

(a) paragraphs 10.3 to 10.10 on the application of the maximum tenure; and

(b) paragraphs 10.11 to 10.12 on the prohibition of flat rate and/or Rule of 78 method;

(c) paragraph 10.13 on the disclosure of the effective interest/profit rate; and

(d) paragraphs 10.17 to 10.18 on financial education.

Issuance Date
30 September 2025

Effective Date
30 September 2025, except for the following paragraphs, which will come into effect on 1 January 2027:
(a) paragraphs 10.3 to 10.13; and
(b) paragraphs 10.17 to 10.18.

Issuing Department
Jabatan Konsumer dan Amalan Pasaran

Documents

• Policy Document on Personal Financing
• Exposure Draft on Personal Financing Feedback Statement