5 Things to Watch Out For When You Apply for Koperasi Loan
koperasi loan

5 Things to Watch Out For When You Apply for Koperasi Loan

(This article was originally published on the 5th April 2018 and updated on the 6th of September 2021).

In any given situation where money is involved, precautions must be taken seriously to avoid unnecessary negative outcomes such as losing your hard-earned money. When applying for any sort of loan, especially during an emergency, there are scammers out there ready to take advantage of your vulnerability by using their sneaky scamming procedures.

If you are looking to apply for koperasi loans, keeping a lookout for these certain aspects is crucial. To help you keep you and your money safe, listed below are the 5 things to watch out for when you apply for a koperasi loan.

Before we proceed, here is a little elaboration on what is koperasi loan for those that are still unfamiliar with this Syariah-compliant mode of financing.

A koperasi loan is a personal loan that is offered to civil servants, particularly government employees on both federal and state levels, local governments (majlis), statutory bodies and selected government agencies. This is a popular financing mode among civil servants as it offers more leniency and flexibility in terms of applying, as compared to commercial banks and licensed moneylenders (credit community).

This flexibility can be attributed to the repayment scheme that these cooperatives adopt, which is through salary deductions to Angkatan Koperasi Kebangsaan Malaysia Berhad (Biro ANGKASA or Jabatan Akauntan Negara). Most cooperatives also accept applications from borrowers with records of outstanding loans in CCRIS or CTOS, listed as Special Attention Accounts (SAA) as well as AKPK.

Source: Mostafa Meraji

1. No upfront cash payment is required at any time, even after the loan is approved


Source: Jomnichapa

A legitimate lender will never ask a borrower to pay anything before receiving the loan. Any insurance cost, advance payment, stamp duty, legal cost or processing fee will be deducted from the loan instead of you having to find the money to pay for it first. There is never a need for a borrower to make an upfront payment before receiving any loan.

Many Koperasi (Co-operative) distribute their personal loans through a network of agents. All authorized koperasi loan agents, like Direct Lending, receive their commissions directly from the koperasi when the loan is disbursed. They are prohibited from collecting any payments or fees from the borrowers. If the agent you are dealing with asks you for your ATM card or to pay him or her for a commission or fee after your loan is approved, walk away if you have identified these warning signs.

2. Be clear about the payout and fees deducted from the loan proceeds


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When applying for a koperasi loan, make sure you ask and understand what fees the koperasi deducts from your loan amount to arrive at the cash amount you receive (the loan payout) and what happens to your debts after you die.

The most common fees will include:

  • Stamp Duty
  • An insurance premium coverage that protects you from not being able to service the loan in case you have an accident
  • 1 to 2 months of advance payment, as the Biro ANGKASA deduction in your payment will usually take place 2 months after you have received the loan

Also, ask if there is any membership fee required for the loan. There are several koperasi that charges RM25 to RM30 membership fees per month for the first loan with them. This is deducted from your salary together with your monthly repayment and is not refundable. Koperasi loan that does not require membership fee includes Yayasan Ihsan Rakyat and Public Islamic Bank – MCCM.

As of the date of writing, the Koperasi Loan in the market typically has a payout ranging from 80%+ to 98%, after deducting all the fees mentioned above. This means for every RM1,000 loan, you receive cash in hand between a range of RM800 to RM980. Make sure you understand the payout and feel comfortable with the cash amount you will receive before proceeding.

3. Know the interest rate and the loan payout


Source: Kenchiro75

When applying for a koperasi loan, do not just focus on the interest rate but also pay attention to the payout. The payout indicates the final cash amount that you will receive in hand.

Which one is more worth it?


A loan with a higher payout and higher interest rate or a loan with a lower payout and lower interest rate is more worth it? To compare, here is an example to illustrate.

 Koperasi Loan AKoperasi Loan B
Loan AmountRM10,000RM10,000
Interest Rate6.5% p.a.7% p.a.
Tenure10 years10 years
Monthly Loan RepaymentRM137.50/ monthRM141.67/ month
Total Cash On HandRM8,000RM8,800
Total Payment (after 10 years)RM16,500 (RM137.50 x 120 months)RM17,000 (RM141.67 x 120 months)
Total Cost IncurredRM8,500 (RM16,500 – RM8,000)RM8,200 (RM17,000 – RM8,800)

Loan B costs you less despite the higher interest rate as you get more cash on Day 1. So, make sure you do this comparison before deciding which loan best suits you.

4. Does it sound too good to be true?


Source: Luis Molinero

Many different koperasi are offering such personal loans and each one of them has different requirements. Typically, products with low interest rates and high payouts have stricter requirements compared to those with high interest rates and low payouts. That is fair, right?

Refer below for the selected koperasi loan products available and their requirements (The information in this table below is accurate during the time of writing).

 Interest Rate (p.a.)PayoutRequirements
Co-op Bank Pertama2.69% – 3.99%Up to 95%– Accounts for outside commitments
– Trade references (Non-banking info) is acceptable (i.e. Courts, Singer)
– No negative CTOS record
– No SAA* in CCRIS
– Not listed under AKPK
Public Islamic Bank (MCCM)3.99% – 4.45%Up to 98%– Accounts for outside commitments
– No negative CTOS record
– No overdue for more than 2 months SAA* in CCRIS
– Not listed under AKPK
Koperasi KOPUTRI5.9%Up to 95%– Does not account for outside commitments
– No overdue for more than 2 months or SAA* in CCRIS
– Only those with a CTOS record less than RM5,000 can apply
– Not listed under AKPK
RCE (Yayasan Ihsan Rakyat)From 5.99%Up to 90%– Does not account for outside commitments
– Overdue and SAA* in CCRIS can apply
– Listed under AKPK can apply
**SAA – Special Attention Account

Therefore, do watch out when you are being offered a fast processing koperasi loan with an interest rate of only 1.99% or 2.99%, a 90%+ high payout, and accept your application even if you have a bad CCRIS and CTOS record. The actual result would be far from it when the Koperasi does the “akad” call with you.

5. Do not wait until the last minute


Source: Patty-Photo

If you foresee a need to borrow for any reason, such as a renovation project, education purposes, or a major purchase, it is better not to wait until the last minute but to always plan ahead. Although the process of koperasi loan application can take only up to 2 working days*, early planning gives you more time to search for the best deals in town. In the worst case scenario, if the agent you are dealing with is dishonest and you find out that the actual loan details are not the same as what you were told before you applied, you have the right to cancel the loan and move on to find a better deal.


We hope that you find this article as a useful guide before you apply for a koperasi loan. It is always advisable to check with your loan provider on the highlighted points stated before committing to a personal loan.

This article is prepared by Direct Lending – a fast, simple and safe online personal loan platform; koperasi loan for civil servants and personal loan from licensed moneylenders for private sectors in Malaysia.

Need extra financing? Check your eligibility with us today for free, with absolutely no upfront payment or processing fees. Rates from as low as 2.69% p.a

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