Understanding BNM’s RM100k Loan Education Requirement for 2027

Understanding BNM’s RM100k Loan Education Requirement for 2027

Spending today is worth a lot more in future

Before we spend beyond our earnings, please remember that money which we overspend today will mean a much bigger ‘loss’ the future. For example, if I put in RM10,000 into the self-contribution for EPF, this RM10,000 could have turned into RM17,081 10 years later based on an average of 5.5 percent dividend returns from EPF. This is a 70 percent gain over 10 years due to the compounding effect despite EPF declaring just 5.5 percent every year for the next 10 years. If we used it now, then we are spending our future RM17,000.

I think this is why our Bank Negara Malaysia (BNM) would want us to really think very carefully before we proceed to borrow money. If we are borrowing it because we are starting a business, then this is for future monetary potential. If we are borrowing because we needed the money to pay for our credit card debts… this is why BNM is concerned and will make it compulsory for any borrower to complete a financial education module first before they can proceed with the borrowing.

Read on to know what will be implemented

Article in malaymail.com. From January 2027, anyone applying for personal loans exceeding RM100,000 will be required to complete a 15-minute financial education module under Bank Negara Malaysia’s (BNM) new policy aimed at assessing borrowers’ financial readiness and promoting smarter borrowing choices.

A BNM spokesman said the RM100,000 threshold was chosen for its balance of impact on banks and benefits to consumers, noting that it aligns with the bankruptcy threshold under the Insolvency Act.

“We want consumers to really self-assess whether they truly need this RM100,000 and understand the consequences of non-repayment, which can lead to bankruptcy,” the spokesman said. Article in malaymail.com

Workable meh? 15 minute financial education module. Who will track?

Okay, okay, many would say are you sure this is workable? Let’s be honest lah, workable or not depends on the people and also the enforcement yeah. For example, if the borrower claims that the financial provider DID NOT let them complete the 15 minute module and the financial provided could not provide the proof that the borrower has completed, then the borrower can stop repayments.

If such a thing is made compulsory, the financial provider will definitely ensure the borrower completes the module yeah. By the way the reason why it’s cleaner in Singapore is also because enforcement is much stricter yeah. If there’s a chance you get caught, you would NOT throw rubbish indiscriminately anymore. So, it’s essential to have the right process in place and actually enforcing it strictly will mean everyone following it strictly without fail. Since this is under BNM, let’s just say I have every confidence that this will be successfully implemented.

If you are an education institution and you like me to speak for free to your students…

I am happy to share personal finance tips. Free yeah, as long as it’s an education institution and it’s for benefit of future working professionals. Please do not source for speakers who will give a talk but will sell their course… (I have no course to sell).

Please do not get speakers who speak about personal finance but has zero knowledge about property investment. Remember… when we retire and we have no property, then renting a property is FOREVER. How many of us can survive financially if we have to pay rental until the day we say bye bye?

Happy spending… within our means. Keep away from the need to borrow any money to pay for our overspending.

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