Sunday, May 6, 2012

PTPTN : 1% Ujrah or 3% Conventional

Before I blogging further more about this issue, please note the post written here is my personal view and based on my understanding. To viewers, kindly do correct if I’m wrong and your opinions/comments are bigheartedly accepted.

Just a glimpse, I believe many of us will agree that 1% is a better method. Yezza, 1% or 3% charges, so of coz we choose the fewer figures, which is 1%, rite? However after I had reviewed and analyze both methods, I found out and would like to share info that readers/applicants should take note before decide convert to 1% Ujrah or stick to 3% Conventional rate method. 

My review here is regarding calculation method, payback period and agreement contents.


3% Conventional is based on REDUCING BALANCE (similar as home loan). Meaning the 3% is depends on your balance.  So, the fewer balance you have, the lesser you pay. In other means, if the balance still in bulk, you have to pay more. 3% calculation is based on formula below (which I print screen from PTPTN website) or may use the loan calculator as stipulated in the PTPTN website as well.

1% Ujrah is based on FLAT RATE (similar as hire purchase/car loan). Meaning the monthly amount you pay is the same figure (fixed) and if you skip the monthly payment, you will be imposed on penalty as stated in the agreement below.

1% calculation is based on formula below or may use the ujrah calculator.

Ujrah Chargers = Current Outstanding Balance x 1% a year x payback period
                              = RM28625 x 0.01 x 15 years 
                              = RM4293.75
Total Payment = RM28625 + RM4293.75
                               = RM32918.75 
Monthly payment = RM32918.75 / 180 months 
                                      = RM182.88

*Note : Current Outstanding Balance = loan principal amount + arrear amount
                                                                        = RM28000 + RM 625
                                                                           = RM28625

1% method is calculated based on the LATEST BALANCE (BAKI TERKINI) IN THE CURRENT YEAR (TAHUN SEMASA). So, it will include the arrear amount (the amount which borrowers didn’t pay for a few months or monthly payback amount is less than the figure stated in the schedule). That is why in the case above, the figures calculated is RM28625 not RM28000, even the loan principal is RM28000.


Next, please note of the ‘pay back period’ given as well. Some cases, during 3%, the period given is 10 years (120months), however after convert to 1%, the timeline is 15years (180months). The ‘pay back period’ is important bcoz it is included in payment calculation and it influencing the amount you pay. If the payback year given is longer, meaning the bigger total amount has to be paid. You may refer the formula below and detail calculation as above.

Ujrah Chargers  = Current Outstanding Balance x 1% a year x PAYBACK PERIOD

The 1% schedule of pay back period as below :


I’m not a lawyer or a legal advisor, however I think you have to consider some of the T&C stated in the 1% rate Agreement as below.

Agree to any rate? Meaning PTPTN can change the present 1% rate to any rate which is set by PTPTN from time to time? So, if suddenly the rate is change to 5% or 10% in future, the borrowers have to pay the new amount based on which is set by PTPTN in upcoming period,  rite.

PTPTN reserve the right to charge a 1% penalty if borrowers do not pay on time.

PTPTN has absolute discretion to amend or add any of the terms and conditions. Therefore, anything may happen such as if the management of PTPTN is change, then the new management be able to amend/add the T&C or any possibilities may happen. So, from 3% to 1%, then 1% to 5% huh?

Final point, I’m not sure about this part, but I heard with the 1% method, if the borrower’s die, then the beneficiaries will be responsible towards the loan (e.g. your parents/spouse/family has to pay the loan until clear up. It is different with 3% rate which the loan will be written off if the borrowers pass away. Therefore, it will not burden the family or beneficiaries.

As for ME, I stick to 3% Conventional, as I already paid almost 17K and my balance is only 7K when they offered me 1% Ujrah. Plus, bcoz I feel less comfortable regarding the “absolute discretion” terms.

For those who haven’t paid even a cent or plan to settle in LONG TERM, I suggest better to choose the 1% Ujrah with MONTHLY PAYMENT MORE than the amount stated in the schedule given. Bcoz in my roughly view, if you do a payment according to the schedule given, the whole amount you paid is MORE actually.

For those who plan to clear up the loan in SHORT TERM, I advise better bond to 3% Conventional. I salute those people! Congratz!

PTPTN should give DISCOUNT instead of INTEREST and Discount given is based on performance (e.g. 3.0 CGPA & above) to maintain the quality or giving discounts if payments are paid earlier before the timeline. I believe, discount method may encourage borrowers to pay earlier and clear up the loan before the timeline. Our country given discounts to traffic OFFENDERS for traffic summons, so absolutely may give discount for EDUCATION which is essential to country.

Or at least borrowers should only pay the loan without the interest/admin chargers as all the work done in managing the PTPTN should already have been allocated in the yearly budget, not from the charges. Besides, I suggest PTPTN start asking for reimbursement once the borrower’s salary reached a certain level. So, may less the burden for those who have a low salary.

I do really hope that the present and future Government to maintain and manage Economical & Quality Education System.

Eventually, I wish viewers will get detail outlook and may wisely decide which one is the best to opt.

Menilai bukan hanya dengan MATA FIZIKAL, tetapi gunakan jua MATA HATI, pasti dapat keputusan yang dicari!

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