Time for rules, transparency on loans, says Kelvin Goh, a Financial Planner
Kelvin Goh says mandating the disclosure of actual repayment costs benefits consumers and creates a competitive lending environment.
PETALING JAYA: A financial adviser has proposed that the government introduce guidelines for transparency in loan marketing.
Kelvin Goh, a certified financial planner with FA Advisory Sdn Bhd, called for the government to require lenders to include the effective lending rate when advertising a loan to reflect its true cost.
“When all banks are mandated to disclose the effective rate, it becomes easier for consumers to make meaningful comparisons, leading to a fair and more competitive lending environment,” he told FMT.
For example, Goh said, some borrowers had misunderstood that personal loans with a 4% interest rate (the flat rate) were cheaper than home loan refinancing with a 5% lending rate (the effective rate).
“The conversion from a 4% flat rate to an effective rate of approximately 7% reveals that the personal loan is actually more expensive than the refinancing loan,” he said.
He was commenting on Kota Melaka MP Khoo Poay Tiong’s call for the finance ministry and Bank Negara Malaysia (BNM) to review the action of banks and e-wallet companies that facilitate easy access to personal loans.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs.
Published By:
Kelvin Goh, CFP
I’m a digital marketer has transitioned into a financial planner. Over the past year, I have successfully achieved financial stability for myself. Recognizing the significance of financial planning, my current mission is to promote financial awareness among the people of Malaysia, encouraging them to make wise financial decisions, take control of their financial well-being, and ultimately attain financial independence.
About Me
Kelvin Goh is a Financial Advisor Representative (FAR) licensed by Bank Negara Malaysia, and a CMSRL holder approved by the Securities Commission Malaysia.
He is also an active Certified Financial Planner (CFP) member with the Financial Planning Association of Malaysia (FPAM).
