Where to get cash when you need it? - Malaysian Edition
A life crisis or a deal went sour - sometimes we just need more cash than our piggy bank could afford. Scroll down to see the options you have after exhausted your emergency funds.
1. EPF withdrawal
The cold-hearted forceful deduction of our monthly salary for 30 years is actually quite considerate when it comes to helping you dealing with life needs. You can withdraw your EPF if you need money for a valid purpose.
EPF allows you to withdraw:
i) Full amount for incapacitate to work (physical or mentally although I am not sure if depression counts) or leaving the country
ii) Account 2 for home purchase or eligible health purpose including for your kids below 16 years old
Click here to look at the full list for withdrawal
2. Refinancing any of your assets
Asset refinancing can be cheap as you guarantee the loan with your home. You could get a refinancing loan at ~4.5%.
3. Personal loan from banks
The obvious option compares to any other money lender. Most banks offer personal loan at 9-11% interest rates, which is very expensive and I advise you not to take such loans. The easier you get the cash, the higher is the cost. Well, if you must, make it 7% the max. Sweet deals if you are a government servant or GLC employee (nearly everybody have one of such relatives), there are some banks that offer only 3.99% flat rate for cash loan
4. Credit card "advance"
Credit card advance are a financial No! Don't! They are super expensive, with 5% upfront or min RM 50 charge and easily comes with 18% interest rates. But if you really need the money, what other choice do you have? Thanks to the rise of FinTech, technically, you could withdraw cash with rates even lower than personal loans - and less hassle, hopefully.
First, you need a credit card that offers low-interest instalment program. Could be between 0-4% for up to 36 months depending on banks. Consider PublicBank, UOB.
Next, use apps to pay someone (in this case, yourself)
PayPal - transaction fees +-1.5%
If you come from U.S. you have a few extra choice
- Square Cash allows you to pay an account with a credit card with 3% charge.
Or purchase gold coins (check the margin spread) so you could sell it back at little loss.
Next, call the bank and convert the purchase to instalment plans.
Viola! You get a short term personal cash advance at interest as low as 3%
5. Life insurance policy with cash out option.
Depending on your insurance policy, it may be an option to cash out but the penalty can be high. Lower coverage or even no coverage at all. And insurance policy is so complicated - they just have to do that don't they - you can jeopardy all the effort you put in these years if you did not read the fine print correctly.
6. Friends and family
For some people, this is the first resort - beware! I will say, be responsible for your finance, make this a later option. Money cause many family tension and lost of friendship so it is never worthwhile to burn your relationships on issues that can be solved by options above. Unless you got a rich relative or step-parents who's just rich or you don't care to hurt - this could be option 1.
Usually free depending on what kind of friends or family you have.
7. Peer to peer loans
Mostly people talk about P2P loans as investment tools but you can try to take a loan at this website. The loans are generally for business owners so I am not sure what are the ratio of approval for personal loans.
https://www.zopa.com - UK resident only at 3.9-5.9%/year
8. Social help
If you issue is of empathy in nature - loss of the family breadwinner, disaster, incidents - take heart that Malaysia tops the 10 most generous nation. Start by looking at the welfare department (after all that is what you pay your taxes for) then try this online directory of NGO's or media.
9. Pawn your stuff
Pawn is a quick money option at a price. But at least you can sleep tight, no having creditors knocking your door in the middle of the night. The industry is getting so advanced you can even read all the Q&A or WhatsApp them before walking into the shop.
http://www.pawnshop.com.my/ offers pawn at 2% interest a month for 6 months validity. That is 24% a year. Ouch.
Ar-Rahnu Islamic Pawnbrokers charges the same interest rates at lower upfront fees.
All in all
Never take cash from ALong [Local way of saying loan shark] or suspicious licensed money lender. And, if your crisis is gambling debt - no amount of loans can help you.
Disclaimer: NONE of the links in this post are affiliated. They are written as I know best in the bid to help anyone in need. Do your due diligence. Lynn's ringgit take no responsible for any deal gone sour.