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POWER! BORROWING BASICS

POWER! BORROWING BASICS. 28 JAN 2014 DESMOND CHONG. AKPK set up by BNM on April 2006 to provide:- Financial Education Credit Counselling Debt Management All services to individuals are FREE OF CHARGE. AKPK DATA BASED. REASON FOR DEFAULT. OPEN YOUR EYE.

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POWER! BORROWING BASICS

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  1. POWER! BORROWING BASICS 28 JAN 2014 DESMOND CHONG

  2. AKPK set up by BNM on April 2006 to provide:- • Financial Education • Credit Counselling • Debt Management • All services to individuals are • FREE OF CHARGE

  3. AKPK DATA BASED

  4. REASON FOR DEFAULT

  5. OPEN YOUR EYE

  6. SOMETHING DIFFERENT!

  7. LIFE CYCLE

  8. GOAL

  9. GOAL MUST BE SEEN CAN’T SEEN！

  10. 1

  11. WHAT IS POWER! Programme provides young adults & prospective borrowers with practical financial knowledge & debt management

  12. CONTENTS Chapter 1 - Cash Flow Management Chapter 2 - Borrowing Basics Chapter 3 - Wise Usage of Credit Card Chapter 4 - Buying a Car Chapter 5 - Buying a House Chapter 6 - Managing Your Debts

  13. “To borrow or not to borrow?” …….that is the question!

  14. WE ALWAYS LOSS

  15. HARD TO GET

  16. THEY CAN GET IT M’SIA RICHEST : ROBERT KUOK HK RICHEST : LE KA SHENG

  17. CREDIT & DEBT

  18. RULES OF BORROWING • For productive purpose only • Within your means • With a moral commitment

  19. COMMON SOURCES OF BORROWING • Licensed financial institutions • Co-operatives • Licensed money lenders • Unlicensed money lenders • Browse website of BNM at www.bnm.gov.my for a complete listing of licensed financial institutions

  20. DEBT TO INCOME RATIO • Important factor in credit assessment • Ratio = Monthly loan repayments x 100 • Net monthly income • General rule: Ratio should not be mora than 40% En. Daud’s gross monthly income is RM3,800. His total monthly loan repayment - housing, car payment & credit cards is RM2,128 = RM2,128 x100% RM3,800 = 56%

  21. RISK OF GUARANTOR • Guarantee is risky for guarantor • Responsible for unpaid portion of loan, including interest if principal borrower defaults • Think first before agreeing to be a guarantor! • Ensure guarantee for loan is for productive purpose

  22. Types of Interest Rates

  23. COMPOUND INTEREST • Interest is paid on principal & on accumulated past interest • Interest calculation can be on a daily, monthly or annually rest Advantages: More return on investments Disadvantages: More interest payment on loans

  24. PURPOSE

  25. PAY CAPABILITY

  26. PAYMENT HISTORY

  27. THANK YOU Make Prudent Financial Management a Way of Life Website: www.akpk.org.my Toll Free Number: 1 800 88 2575 71

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