BigPay introduces fully digital personal loans with instant approval. Here’s a quick preview
As mentioned, BigPay is now offering digital personal loans to empower the unbanked community. BigPay is a digital finance platform invested by Capital A that started out as an eWallet with a physical prepaid card. At the moment, they have 1.2 million transactive card users and saw double year-over-year growth in 2021. According to Salim Dhanani, CEO and co-founder of BigPay, 55% of Malaysians are underserved.
Based on our early product preview, the Personal Loan option will appear as a new feature in the BigPay app in the Payments section. According to the introduction, the Personal Loan product offers approvals in just 5 minutes. Because it’s a fully digital service, there’s no paperwork required and you can request and make refunds within the app itself.
In our experience, BigPay offers loans between 1,000 and 5,000 RM with an interest rate of 8% per year. According to Salim, the interest rate is based on risk-based pricing, so a long-term BigPay user may get a cheaper interest rate. With regard to the term, BigPay offers installment terms of 6, 9 or 12 months. There is a 0.05% stamp duty. So if you apply for a RM5,000 loan, the stamp duty will cost you RM25.
For a loan of RM1,000 over 6 months, the repayment would be RM173.34/month. Meanwhile, a loan of RM5,000 over 6 months will be charged at RM866.66/month.
As you would expect from BigPay, the user interface is clean and simple. During the loan application, the app shows the monthly repayment, the total interest and other fees for a better overview. If you agree to the terms, you can proceed by providing your personal information and answering a few questions.
The entire application process is pretty seamless and straightforward. You don’t even have to submit a copy of your payslip, bank or EPF statement. If you meet their criteria, your loan should be approved within 5 minutes. However, if further checks are required, verification can take up to one business day.
Once the loan is approved you will be given the opportunity to review your loan offer and you will be required to watch a video to understand the terms. If you have any questions, it also provides you with a shortcut to chat with customer service.
To accept the loan you need to verify yourself via OTP and this is accepted as signing the money lending agreement. Refunds are made through the BigPay balance app itself, which currently accepts top-ups via online banking, credit or debit card, or cash at 7-Eleven. The loan is paid directly into your BigPay account, so you can use it for instant spending through your BigPay card or withdraw it as cash from an ATM.
The money lending agreement for the unsecured loan is issued by BigPay Later Sdn Bhd. They are a licensed moneylender regulated by the Department for Housing and Local Government (KPKT) under the Moneylenders Act 1951. The loan is currently not Sharia compliant, but BigPay plans to issue it in the near future.
For customers who do not repay either the principal or the interest on the loan, BigPay has the right to charge additional late payment interest of up to 8% per annum on the unpaid amount. If you do not pay an installment more than 28 days after the due date, BigPay can terminate the contract and take legal action.
Overall, this is a quick and easy way to get an on-demand loan, useful when you need cash for repairs or medical emergencies. This is also useful for sub-bank community, especially for consumers who don’t have access to a credit card. At the moment, the Personal Loans feature is not yet available to everyone and will be gradually rolled out to the public over the next six months. If you are interested, you can put yourself on the waiting list here.