Three Steps To Easily Repay Your PTPTN Loan
The National Higher Education Fund Corporation (PTPTN) was established in 1997 with the sole purpose of providing student loans to those looking to pursue higher education.
Truly, the PTPTN education loan is a blessing to many Malaysians, as it allows them to pursue higher education without worrying about the cost of their education.
However, since then, we have also seen too many Malaysians shirk their responsibilities of repaying their loans, which has affected PTPTN’s ability to continue on its intended purpose. In fact, to date PTPTN has over RM40 billion in unpaid loans.
One thing you have to understand about PTPTN is that it’s a revolving loan scheme, which means that it relies on the payments of current borrowers to provide loans for future prospective students.
This means that when we default on our PTPTN repayments, we are actively sabotaging a future student’s prospects of getting a PTPTN loan.
Therefore, it is in the interest of all Malaysians for us to start repaying our PTPTN loans as soon as possible.
How to start repaying your PTPTN loans
However, this does not mean that repaying your PTPTN loan is something that you can do without putting much thought into it first.
This is especially true for people who have missed a lot of payments before, and don’t really know how to start or continue paying their PTPTN loans.
So, to help you repay your loan in a more efficient manner, here are three steps you can take.
1. Restructuring your loan
If you’ve been putting off your PTPTN repayments for quite a while, then the first thing you need to do is to restructure your PTPTN loan.
But wait, what is restructuring? How does it work? And how does it help in repaying your debt?
Before we can answer all these questions, let’s look at the most common scenario that happens when someone graduates:
Twelve months after his graduation date, Ali’s PTPTN repayment period starts regardless of his employment status. Since Ali has no income, he is unable to start repaying his loan and the unpaid debt continues to grow with each missed repayment. Six months after his repayment period begins, Ali finds work as a cashier at a supermarket. He decides to start making his PTPTN repayments but is shocked when his payment is rejected. He did not know that he would be asked to settle his outstanding repayments as a lump sum before being allowed to continue repaying his loan. Ali doesn’t have enough saved up to settle the outstanding amount, and so continues to miss his PTPTN repayments.
Twelve months after his graduation date, Ali’s PTPTN repayment period starts regardless of his employment status. Since Ali has no income, he is unable to start repaying his loan and the unpaid debt continues to grow with each missed repayment.
Six months after his repayment period begins, Ali finds work as a cashier at a supermarket. He decides to start making his PTPTN repayments but is shocked when his payment is rejected. He did not know that he would be asked to settle his outstanding repayments as a lump sum before being allowed to continue repaying his loan.
Ali doesn’t have enough saved up to settle the outstanding amount, and so continues to miss his PTPTN repayments.
This is where restructuring can help you. By restructuring your loan, you can add your arrears into your total loan amount, meaning you don’t have to resolve the full amount of your arrear, but you can start your monthly repayments.
By restructuring your loan, you are effectively renegotiating the terms of your loan. This includes your monthly repayments amount, and the period of time you’ll need to fully repay your loans.
Here’s an example of how restructuring works:
Ali has a PTPTN debt of RM32,000 and would like to clear it all in nine years; he also has RM3,000 debt resulting from the unpaid repayments to date. Without restructuring he would have to first settle the arrears with either a personal loan or credit card. In this case, he opts for a personal loan with a 10% interest rate and a tenure of five years.
In that case, his repayment would look like this:
|Interest rate||1% p.a||10% p.a||-|
|Tenure||108 months||60 months||-|
|Total interest paid||RM2,880.00||RM824.47||RM3,704.47|
In total, Ali’s original debt of RM32,000 ended up costing him a total of RM38,704.47.
On the other hand, Ali could also meet with PTPTN to restructure his debt into an amount that he can afford to pay. After restructuring, he will settle the full amount within 10 years (instead of the original 9 years) and will only need to pay RM500 for the unpaid portion of his outstanding loan (arrears) to begin the restructured repayments.
|Interest rate||1% p.a.|
|New tenure||120 months|
|New monthly payments||RM293.34|
|Total interest paid||RM3,200|
After restructuring, Ali’s total repayments will now amount to only RM35,200 (RM32,000 + RM3,200 + RM500).
Another question you might be asking, is what if you can’t afford to pay RM500 out of your arrears? Don’t worry because the amount you have to pay for the arrears is negotiable. With restructuring Ali not only has more time to settle his debt, and he is able to do it with lower monthly repayments while paying less in the end.
All you have to do is to head to any PTPTN counter or office near you, and discuss the terms of restructuring the loan in person.
2. Using auto-debit to repay your loan
Between your car loan, electric, water and phone bills, sometimes there’s just too many things you have to keep track of, that you might forget to repay your PTPTN loan.
Which is why our next strategy is to just set up an auto-debit payment to repay your PTPTN loans. With the auto-debit payment, you can rest easy knowing that your payment will be made automatically every month, so you don’t have to worry about missing another payment anymore.
But how can you set up your auto-debit payment? Here are the steps you need to take to set up your auto-debit payment.
i) First, login to your PTPTN account at this link.
ii) Next, click on the “Penyata Baki Terperinci”
iii) Next, you’ll be brought to a page where you can see the details of your loan, and the balance you have to pay. From there, scroll down and click on the “Pendaftaran untuk direct debit” button.
iv) And finally, just fill in the application form.
Once your application is approved, your PTPTN loan repayment will be automatically deducted from your bank account.
3. Using auto salary deduction
Another simple and easy way you can clear your PTPTN debts while also avoiding all those arrears is by signing up to the auto salary deduction programme.
As the name implies, this programme will deduct your salary automatically every month as repayment for your PTPTN loan. Just like the auto debit method, this method puts your PTPTN repayment on auto-pilot, as everything is done automatically for you.
To sign up for this programme, all you have to do is go to this link, and follow the steps listed down. You can also request for salary deduction in person at any PTPTN branch, but for this one you have to bring your salary slip with you as well.
Once all the necessary steps have been taken, PTPTN will key your details in their system and forward the suggested deduction amount to your employer. Once your employer has deducted it from your salary, your loan statement will be updated as well.
Make extra repayments if you have spare cash
Now you’ve restructured your loan, and you’ve set up your auto debit or your salary deduction, now all you have to do is look forward to the day when your PTPTN loan is fully paid.
But, if you want to pay it off faster, you can always make additional payments whenever you have extra cash.
How can you do this? Simple. All you have to do is head over to the closest PTPTN counter or office, and discuss with the agent over the counter regarding your extra payment and your balance after the extra payment.
Extra repayments can help you slowly but surely shorten the term of your loan, which in turn helps you settle your PTPTN debt that much faster – and could even reduce your total interest payments.
Now that you’ve learned all the steps to make settling your PTPTN loan much easier, don’t wait any longer and quickly apply what you have learnt to settle your PTPTN loans.
After all, PTPTN is a revolving loan scheme, which means that the amount you repay will help other students who need financial help with their tuition fees as well!
Get discounts for settling up
Starting from November 1, 2021 until April 30, 2022, there will be discounts on PTPTN repayments, a move which was announced during the tabling of Budget 2022.
The discounts that are offered are a 15% discount if you make a full settlement of your loan, a 12% discount if you make a 50% settlement, and a 10% discount for those who sign up for scheduled salary deduction or auto debit deduction.
As for the payment methods, borrowers who wants to make a full or half settlement of their loans are allowed to make their payments online or at any PTPTN counter near them, but they need to first obtain a confirmation of their debt balance through PTPTN’s official portal or by calling a PTPTN marketing executive.