Paying Your PTPTN Loan Repayments with Credit Cards – CC 200

Another Credit Card Tutorial by GenX @ http://www.GenXGenYGenZ.com

Update 16 February 2016 – PTPTN payments using credit card via online.

Update April 2016 – Many people have reported that they are unable to pay their PTPTN loan via MyGovXchange.

Update 22 April 2016 – Revision to credit cards to use for paying PTPTN Loans at Conclusion.

INTRODUCTION

If you are a local graduate, most likely you would have signed up with National Higher Education Fund Corporation or in short PTPTN (Perbadanan Tabung Pendidikan  Tinggi Nasional) to finance your tertiary education.

Decades ago, many smart students were deprived of the opportunity to pursue a degree because of financial reasons or limited places in our few local universities. And for those who are lucky to secure a place in a Public University, they may be forced to study in a field where they have no interest at all.

With the establishment of PTPTN, two major things happened:

First – with PTPTN, ALL Generation Ys are given the opportunity to pursue a degree.

Second – with PTPTN, universities and colleges mushroomed everywhere! This is because they are ensured of tuition fee payments by the government! The plus side to this is, one is able to pursue his desired degree in a private college. The downside is, not every university is of equal standard and some do not even have the necessary resources to provide quality education.

So with PTPTN, like the wise TDM said, the government can no longer fool the general public as there are no more idiots in Malaysia.

Seriously, I tell you, PTPTN is a live saver for most families regardless of whether they are from the lower income group or middle class. Nowadays, with the high cost of living plus many chasing after materialistic stuff, many parents do not have adequate savings to finance their children’s tertiary education.

For example, a couple in their mid thirties today are  earning a combined salary of RM100K per annum and are blessed with 3 smart children which give them a big headache as every one of them wants to be a doctor! Assuming they currently have RM200K worth of liquid investments which can be converted to cash anytime. The eldest child will enter university in 10 years time and they can save RM20K a year and deposit it into Fixed Deposit with interest rate of 4%.

In 10 years time, let’s assume their current investment would have ballooned to RM400K and they have saved an additional RM250K (the RM20K per year savings x 10 years with compound interest of 4%). This would mean they would have funds totalling RM650K by the time their first child enters university.

Do you know how much it cost to pursue a MBBS degree at IMU today? It cost more than RM550K!!! So in 10 years time, I would reckon the cost for MBBS at IMU would be more than RM650K!!! So, if they were to send their eldest child to IMU, that would mean they would have very little remaining in their savings to finance the second child’s (who will be entering uni in 13 years time) tertiary education and nothing left for the third child’s education (who will be entering uni in 15 years time).

Like I said, with PTPTN, universities mushroomed overnight everywhere and now we have so many local private universities offering  MBBS where the entire total tuition fees cost less than RM300K. Let’s assume in 10 years time the MBBS tuition fee would be inflated to RM450K.

So the eldest child, in 10 years time, enters one of the many private universities (for some reason, he can’t be enrolled in any of our public universities) to pursue his dream MBBS degree which would cost his parents RM450K.

Assuming PTPTN allows a maximum of RM30K per year for MBBS degree and the MBBS course is 5 years, that would mean that the child can borrow from PTPTN up to RM150K.

So after the first child completes his MBBS degree, the parents would still have RM350K (RM650 Savings/Investment less RM300K tuition fee paid with cash) remaining to finance the second child’s education.

And by the time the second child enters a local private university in 13 years time, say a MBBS degree cost would have inflated to RM500K. So from the RM350 remaining plus RM150K one can borrow from PTPTN, that is just about enough to cover the tuition fees for the second child.

When it is time for the third child to enter uni to pursue his dream MBBS degree in 15 years time, the parents would not have enough money (cash/liquid investment) remaining to finance his/her education even if PTPTN allows them to borrow maximum RM150K for the 5 years course. But our BN government, the best government in the world which has taken care of the Rakyat’s needs for decades without the Rakyat realizing it, have been forcing all salaried Malaysians to contribute to EPF for the Rakyat’s own good. And guess what, thanks to the BN government, the parents (by then would be in their early 50s) would have more than RM300K combined in their EPF Account 2 which they can use to finance their third child’s MBBS program and when they retire at age 60, they would still have more than RM1M combined in their EPF Account.

Note: the above assumes that the couple’s combined income stays at RM100K p.a. But we all know that this is not the case. Most probably the couple’s combined income would surpass RM200K by the time they retire unless one of them stops working for whatever reasons.

You must be wondering what the heck the above example has got to do with your  PTPTN loan? Like I have mentioned many times previously, if you are a reader of mine, it means you are an educated person which means you would most probably die rich (if you don’t gamble, become a drug addict or waste money on materialistic stuff). Click here to read my article titled The Secret To Eternal Happiness.

Well, the purpose of the above is to show you Generations Ys (who utilized PTPTN loans for your higher education and thus giving you the opportunity to earn big bucks (that is if you plan your future well and execute your plan) that with PTPTN coupled with you starting to save money and invest wisely, there is no reason why your Generation Z child cannot pursue his/her dream degree in the future even it if cost hundreds of thousand Ringgit.

With the above introduction, I shall now go into the matter of interest – Paying PTPTN loans with Credit Cards 🙂

YOU CAN USE CREDIT CARD TO MAKE REPAYMENT TOWARDS YOUR PTPTN EDUCATION LOAN

I only found out that PTPTN loan repayments can be made with credit cards around midnight on 20 January 2016 thanks to fruitie, a Mod at LYN. And that got me excited because this info may be beneficial to close to 2 million Malaysians who have outstanding debts with PTPTN. And for the record, a fellow LYN member, and a Bro of mine for many years, by the nickname of Human Nature was among the first people to post at LYN that PTPTN loan can be paid with credit cards.

So, first thing I did when I woke up on 21 January 2016 was to call PTPTN and I managed to speak to a Branch Manager who reconfirmed that credit cards can be used to pay PTPTN loans!!! But only at the following places:

  1. PTPTN HQ and all branches nationwide at their counters only.
  2. One Stop Centre PTPTN KL Sentral and Putrajaya
  3. Urban Transformation Centre (UTC) Kuala Lumpur, Perak, Melaka, Johor, Kedah, Pahang and Sabah.

UPDATE 16 February 2016 – someone messaged me at LYN to informed me that he paid his PTPTN loan using his credit card via FPX (Financial Process Exchange) and was imposed a fee of RM0.53. So I googled FPX + PTPTN and somehow I cannot seem to find any info on credit card PTPTN repayments via FPX (but you can try).

The good news is, I did come across a “PTPTN – MyGovXchange dan Perkhidmatan Online eKL Manual” that teaches one how to use credit card to pay for his/her PTPTN loan repayments via My GovXchange. Click here to read PERBADANAN TABUNG PENDIDIKAN TINGGI NASIONAL (PTPTN) and go to section 4.2.2 where it will give you step by step instructions on how you can pay your PTPTN loan anywhere on earth via online using credit cards 🙂

Update April 2016 = Many people have reported that they are unable to pay their PTPTN loan via MyGovEchange as shown in the said manual above in section 4.2.2.

PTPTN

But before I go into details as to how by you using credit cards can benefit you, I had to understand how PTPTN loan works in respect of the repayments.

MAXIMUM PTPTN EDUCATION LOAN AMOUNT

Below table shows the maximum amount one can borrow from PTPTN a year:

Maximum Loan Amount PTPTN

Based on the above info, if your household income is more than RM8K per month and your child is pursuing an undergraduate degree in Engineering, your child is eligible for PTPTN loan amounting to maximum RM7,010 per year. So for a four year Engineering Program, that equates to maximum RM28,040. However if your child is pursuing a MBBS  Degree, then he/she is eligible for up to maximum loan amount of RM30K/year regardless of how much you or your wife earn.

REPAYING YOUR PTPTN EDUCATION LOAN

Firstly, one has to start repaying his/her PTPTN loan 6 months after graduation. And currently there are two methods as to how PTPTN imposes interest/management fee on the loan amount, i.e. Conventional or UJRAH.

Conventional Repayments

Assuming one has RM60,000 Education Loan from PTPTN and opted to repay the loan in ten years time.

Using PTPTN Calculator for Conventional Method – 3% Management Fee (Reducing Balance):

Conventional 10 years.jpg

By clicking on the “Bina Jadual”,  a table will be produced showing the repayments. For the first few years, the repayment amount is low starting at RM216.60 and eventually goes higher. But what I want to highlight is, you are imposed freaking high management fee, please refer to the 3rd column – Kos Pentadbiran.

Conventional 10 years 2

From the above, the total Management Fee works out to be RM11,758.92 for the entire duration of 10 years. In the first year itself, you will be paying RM1788.93 or 15.2% of the total Management Fee. As such, if you opt for a shorter duration, it would save you in interest. For example, say you opt to repay the loan in 5 years, you would only need to pay  RM5687.30 in management fees to PTPTN.

Conventional 5 years 2

UJRAH Repayments

Using the UJRAH Calculaor with the same loan amount for RM60K with 10 years repayments, the Management Fee works out to be RM6K only.

PTPTN Repayment 2 10 years

And with 5 years repayment, the Management Fees reduced further to just RM3K!!!

PTPTN Repayment 3 5 years.jpg

From the above examples, it’s a no brainer that one should opt for shorter duration to repay their PTPTN loans and go with UJRAH method to save thousands of Ringgit.

Seriously, 10 years is a long long time to be in debt and anything can happen. Most people will tend to want to repay a smaller amount and go for longer duration. But if you are reading this, you are unlike the masses which opt for longer loan repayments and end up paying more in interest besides staying longer in the shit hole of debt. Some may argue that with inflation, it’s better to stretch loan repayments longer, we are paying “less” in the future. This may or may not be true BUT I can tell you the super rich do not pay a sen in interest to anybody and will  save every single sen they can today for tomorrow. If you are like me where you cannot comprehend why one opts for 9 years car loan, then why would you want to stretch your Education Loan to 10 years.

If you at the very beginning start repaying your loan with a bigger amount by opting for 5 years repayments, it means, right after you graduate and get a job, you have less disposable income to splash on materialistic stuff like iPhone 6s, holidaying and clubbing. And the thing is, with you having a job, your lifestyle will definitely be better than your student years where you are really on a tight budget. In five years time with promotions and salary increment(s), you would have been accustomed to the lifestyle that your disposable income allows you. And the moment you clear off your PTPTN loan, suddenly you find that you have extra cash in hand every month which you have no idea how to spend, haha. And if you really know what is good for you, you would use this extra cash and invest it for your future.

PTPTN DISCOUNT

Back in 2014 Budget, the government announced that for those who pay their PTPTN repayments on time, they are entitled to a 10% rebate. And for those who settle in full their PTPTN loan, they are entitled to 20% discount!!! Too bad the offer has expired.

Discount Budjet 2015

With the above, it is best that you update yourself on the latest development on your PTPTN loan. And if the government ever offers another 20% discount if one was to pay in full his/her PTPTN loan, you should take up the offer and then make a final payment with your credit card and then go perform 0% Balance Transfer. Click here to Mr-stingy’s article where he used 0% Balance Transfer to pay off his Petronas “Education Loan”.

And there is no harm in you calling PTPTN officers to see if they will offer you discount if you were to settle you PTPTN loan in full today or revised your repayments to a shorter duration and save some interest/management fees.

CONCLUSION

PTPTN is really good as it gives all Malaysians, regardless of their standing in society, the opportunity to learn a skill and pursue their dreams. The only set back is that many so called private universities/colleges were set up, main purpose not to educate their students, but to make money out of them. A few of them have even closed down leaving their students in a dilemma. So, make sure you only enroll with reputable Universities/Colleges that have strong financial standing and that the majority of their graduates are employed within the first 6 moths after graduation (before you need to start repaying back your PTPTN loan).

For those of you who are in debt with an outstanding PTPTN loan, instead of opting for 0% Installment Plans to purchase materialistic stuff, you should be clearing off your PTPTN loan and be debt FREE sooner.

Click here and read my article titled 0% Installment Plan Is A Trap and I’ll show you 2 examples as to how one can end up deeper in the shit hole of debt. First a guy earning RM2.5K/month and another person earning RM5K/month.

Recently, there was talk that PTPTN was running low on funds as many did not repay back their loans. And with weak oil prices that have affected our economy, everyone will be facing some cash flow problems. So, if you have been paying back your PTPTN loan on time and regularly, I salute you, However, if you are one of those who refuses to repay back your PTPTN loan and are now earning big bucks, you should consider repaying back your PTPTN loan so that PTPTN can continue to give the same opportunity you have enjoyed to others for decades to come.

PAYING YOUR PTPTN LOAN WITH CREDIT CARDS

PTPTN with credit card

For your benefit, below are two articles which you should read and learn how to earn meaningful cash back with credit cards

The Best Credit Cards in Malaysia for Insurance Utilty and PTPTNUPDATE 21 March 2016Click here to read my article titled The Best Credit Cards for Insurance Premium and Utilities and even PTPTN too. A Special Edition To Assist All Malaysians to earn Extra FREE Pocket Money to cope with the high cost of living.

The Best Cash Back Credit Card ComboUpdate 22 April 2016The Best Cash Back Credit Card Combo. This article will teach you how to earn minimum 3.3% effective cash back with credit cards for any type of transactions including your PTPTN loans.

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