Procrastination or just plain kedekut?
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 this?
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 or not?
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
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.