So what is ECOF-i?
ECOF-I is a short form for Islamic Effective Cost of Fund. This is the term used by MBSB to define Base Rate or Base Lending Rate.
MBSB Personal Financing-I (PF-i) is a personal loan for employees working in the private sectors. Before this, only employees working in the public sectors were able to apply for MBSB personal loan package and they were the only ones that were able to enjoy competitive interest rates. This personal loan is compliant to Shariah principles and based on the concept of Tawarruq and Murabahah. As it is an unsecured loan in nature, you do not need to provide any guarantor or collateral to apply for this personal loan.
As a start, the loan financing amount for this personal loan starts from as low as RM10000 to as high as up to RM300000 and this makes it one of the highest loan financing amount available in Malaysia as of now. However, the loan amount that you can borrow also depends on your gross income and credit ratings such as CCRIS and CTOS.
To make things even more interesting, the interest rate for MBSB personal loan is not the typical flat or fixed rate that you usually see from personal loan packages offered by other banks in Malaysia. MBSB calculates its interest rate on a monthly basis and its effective interest rate is very much lower than the effective rates of personal loan packages by other banks in Malaysia.
MBSB’s personal loan interest rate uses MBSB’s Islamic Effective Cost of Financing (ECOF) + 4.1%. With the current ECOFR, you will get approximately 6.50% is a decent monthly interest rate.
You can do your monthly loan repayment at the MBSB payment counter.
There will be a handling fee of RM120 for the loan application. If you transfer the money through interbank, there will be another RM4 per transaction. In addition, you have to buy Takaful insurance coverage to apply for this MBSB Personal Financing-i. If you are late for your monthly repayments, MBSB will impose a 1% late penalty fee based on the outstanding amount.
This MBSB personal loan is only open to all Malaysian citizens with full employment and working in a company for at least a minimum of 2 years. Despite that the personal loan is a personal loan for employees working in the private sector, it is only available to employees working in large public listed companies, multinational companies, and Government Linked Companies.
Furthermore, the loan applicant age requirement is between 21 years and not more than 60 years old by the end of the loan tenure. In terms of Takaful coverage, the loan applicant has the option of not to buy it because it is not compulsory.
A photocopy of MyKad for front and back
Latest 3 months’ salary slips or statements
Employment confirmation letter stating full name, job designations, years of employment, and other relevant details
Latest bank statements where the company credits the salary to
A photocopy of MyKad for front and back
A photocopy of Business Registration Documents
Latest LDHN form or Form B
Latest 6 months company bank statements
All other supporting documents required by MBSB should it be necessary
It is important for you to understand that as a company, MBSB is not under the control or jurisdiction of Bank Negara. Therefore, there is no Perbadanan Insurans Deposit Malaysia (PIDM) protection on your money. However, MBSB has a legal financial license that was directly granted by the Ministry of Finance in Malaysia.
MBSB stands for Malaysian Building Society Berhad and the company has been operating and providing financial services to Malaysians for more than 50 years. Although it is not a bank, MBSB has a special exemption from the Malaysian Government to operate as a finance company in the country. Therefore, MBSB has the permission to operate a wide range of finance-based businesses including savings accounts, student loans, personal loans, and others without complying with Bank Negara policies. To sum it up, the Malaysian Government and Employee Provident Fund (EPF) owns MBSB.