Lending rules: Malaysia
What the published rules require for unsecured consumer loans in Malaysia, in the order a loan is made, and how TS LMS handles each step.
Last reviewed 22 October 2026 · Email me when these rules change
Lender type covered Licensed moneylender (moneylending company licensed under the Moneylenders Act 1951, branded by KPKT as 'Kredit Komuniti' / community credit)
- 01
What licence do you need to lend in Malaysia?
Moneylending licence from KPKT
What the rules require
Non-bank moneylending requires a moneylender's licence (Lesen Pemberi Pinjam Wang) under the Moneylenders Act 1951 (Act 400) and the Moneylenders (Control and Licensing) Regulations 2003, supervised by KPKT's Community Credit Control Division (Bahagian Kawalan Kredit Komuniti). Each licence states the licensee's name, registered and approved operating addresses, conditions, licence number and validity period. Online lending is not a separate licence: an existing licensee must apply to KPKT, and approval is added as a permission or condition on the existing licence.
Effective: being checked against the official text · Rules as of October 2026 · Source: Soalan Lazim (FAQ) – Bahagian Kawalan Kredit Komuniti: Pemberi Pinjam Wang dan Pemegang Pajak Gadai · Soalan Lazim (FAQs) Pemberian Pinjaman Wang Dalam Talian (Kredit Komuniti), dikemaskini 6.09.2021
How TS LMS handles it
Products, credit rules and limits are set up for each lender and country. Changes to credit policy and to products need a second person's approval, and every change is kept in the audit log.
- 02
Is there an interest rate cap in Malaysia?
Interest caps: 12% secured, 18% unsecured per year
What the rules require
Interest on secured loans may not exceed 12% per year and interest on unsecured loans may not exceed 18% per year. Total interest charged may not exceed the principal except by court order (section 17A(2) of Act 400). Overdue amounts may bear late interest of 8% per year, calculated daily on unpaid principal and interest.
Effective: being checked against the official text · Rules as of October 2026 · Source: Soalan Lazim (FAQ) – Bahagian Kawalan Kredit Komuniti: Pemberi Pinjam Wang dan Pemegang Pajak Gadai
How TS LMS handles it
Each product can carry an annual rate ceiling and always carries a ceiling on the total cost of credit; a quote above either is refused.
- 03
How are loan fees regulated in Malaysia?
Only stamp duty, legal costs and refundable charges
What the rules require
Under section 23 of Act 400, the only loan costs a moneylender may charge a borrower are stamp duty, legal costs relating to negotiating the loan, and any other charge only if it is recoverable by the borrower as a debt or deducted from the amount owed. KPKT's online-lending FAQ lists requiring an advance deposit before the loan is disbursed as a prohibited practice.
Effective: being checked against the official text · Rules as of October 2026 · Source: Soalan Lazim (FAQ) – Bahagian Kawalan Kredit Komuniti: Pemberi Pinjam Wang dan Pemegang Pajak Gadai · Soalan Lazim (FAQs) Pemberian Pinjaman Wang Dalam Talian (Kredit Komuniti), dikemaskini 6.09.2021
How TS LMS handles it
Every charge on a product counts towards the rate check, each product carries a ceiling on the total cost of credit, and staff cannot set a charge above the product's.
- 04
What affordability checks are required in Malaysia?
Affordability assessment
What the rules require
Being checked against the official text.
How TS LMS handles it
Income and the debt-to-income ratio are assessed and kept with the credit decision; a limit above the suggested amount needs a written reason.
- 05
Can loan contracts be signed electronically in Malaysia?
Prescribed Schedule J/K agreement, witnessed; e-signatures under Act 658
What the rules require
How TS LMS handles it
Where loans are signed electronically, the agreement is stored unchanged and signed only after approval, and the signature record keeps who signed, when, the agreement's fingerprint and the device. Money is released by a second staff member who is not the approver, and not if the payout account differs from the one approved.
- 06
What identity checks and anti-money laundering duties apply in Malaysia?
BNM AML/CFT policy applies to licensed moneylenders
What the rules require
How TS LMS handles it
ID document and face checks, and sanctions and PEP screening, are built in. A sanctions match blocks approval and release until compliance clears it with a second officer's confirmation, and a PEP match needs a written enhanced due-diligence note before staff approval.
- 07
What are the data protection and credit bureau rules in Malaysia?
PDPA 2010 consent and cross-border rules; CCRIS via credit reporting agencies
What the rules require
How TS LMS handles it
Personal data is kept for set periods by type and then removed, and a borrower's request to access their data can be answered from the system. Contacting a borrower's emergency contact requires the borrower's recorded consent.
- 08
How is debt collection regulated in Malaysia?
Collection only at approved premises; harassment is an offence
What the rules require
How TS LMS handles it
Calls and messages are limited to set hours, and calls to a set number a day. Contact with third parties can be switched off entirely, or allowed only as an exception with the borrower's consent and, where set, compliance approval, using a script that never mentions the debt. Every contact is logged.
This page summarises published rules for general information; it is not legal advice. Rules change: check the current text with the authority before acting.