In Malaysia you can borrow from a bank, a cooperative or a licensed moneylender. There are also Ah Long, who are illegal lenders. Knowing the difference helps you choose safely.
Quick comparison
| Bank | Cooperative | Licensed moneylender | Ah Long | |
|---|---|---|---|---|
| Regulated by | Bank Negara Malaysia | Malaysia Co-operative Societies Commission | KPKT (Moneylenders Act 1951) | Nobody (illegal) |
| Interest limit | Set by the bank, disclosed in the product disclosure sheet | Set by the cooperative | Max 18% a year unsecured, 12% secured | No limit |
| Agreement | Bank offer letter and agreement | Cooperative agreement | Written agreement in the prescribed form (Schedule J/K), attested | None or invalid |
| Collection | Bank procedures | Often salary deduction | Harassing or intimidating borrowers is prohibited | Harassment and threats |
Banks
Banks are licensed by Bank Negara Malaysia. Bank personal loans usually have lower rates but stricter eligibility, including credit checks and debt-to-income limits.
Cooperatives
Cooperatives are regulated by the Malaysia Co-operative Societies Commission. Much cooperative financing is offered to civil servants with repayment by salary deduction, for example through Biro Angkasa.
Licensed moneylenders
Licensed moneylenders, also known as Kredit Komuniti, are licensed by KPKT under the Moneylenders Act 1951. The law caps interest at 18% a year for unsecured loans and 12% a year for secured loans, bans compound interest and requires a written, attested and stamped agreement. The process is usually faster and more flexible than a bank.
Ah Long
Ah Long are unlicensed lenders. Carrying on a moneylending business without a licence is an offence under the Moneylenders Act 1951. Ah Long are not bound by any rate cap and often use harassment to collect. Do not deal with them.
How to tell a licensed moneylender from an Ah Long
- A KPKT licence number you can check on the KPKT website.
- A real licensed office address.
- A written agreement and a stamped copy for you.
- No requests for your ATM card, PIN or an upfront payment to release the loan.
- Repayments to a company account, not a personal one.
Which one suits you?
If you qualify for a bank loan and can wait, a bank may be cheaper. Civil servants can consider financing by salary deduction. If you need a faster process or do not qualify with a bank, a licensed moneylender is a legal option. Never choose an Ah Long. See our loans or our licence details.
Prepared by the SuperPinjamMan team, a KPKT-licensed moneylender (Licence No. WL4248/10/01-12/130928). Last updated: 16 October 2026. This article is general information, not financial or legal advice.
