Want to renovate your home, start a business, or pay off your credit card bills? You’re probably planning to apply for personal financing.

However, you’re also not sure what it’s all about. You have so many questions in mind: What’s the maximum amount you can borrow? What’s the repayment period like? Do banks or financial institutions need any collateral? Read on to find out.

What is it really?

Personal financing means that you can borrow a fixed amount of money from financial institutions for various purposes and return it with interest on agreed repayment terms.

You’re probably thinking, “That sounds like just about any other loan out there”. Well, not really. If you take a closer look at the details of personal financing, it will quickly tell you otherwise.

For starters, personal financings are commonly small or medium-sized amounts, in comparison to larger ones like housing loans. Where the latter is usually capped at a specific percentage of a house’s purchase price, the former can range in size from RM2,000 to RM250,000.