The Ujrah-nization of PTPTN Loans

This is for all you diligent people whom, like me, are faithfully paying off your debts on time.

PTPTN had recently announced an update on its plan to convert the existing 3% to 5% administrative charge (better known as 'interest rate') study loans to 1% repayment schemes based on the islamic finance concept of "Ujrah". Safe to say, I will not elaborate, because you are not interested. You are interested in the money you need to repay your dear government, the goody2shoes that you are, and that, my friend, you will get.

The public and the media have all placed emphasis on the interest rate differential and there has been heavy traffic on http://www.ptptn.gov.my due to the torrents of former students applying for this conversion. All this, without truly understanding what the conversion is really about. With that said, let's get down to the nitty-gritty. You will want to know if you really are better off Ujrah-nizing your loan.

To begin, let's lay out the conditions that set the basis for the loan conversion (despite it being on their FAQ in their website ( http://www.ptptn.gov.my/gateway/docs/FAQ-UJRAH2.pdf ), i know you won't want to read it in Bahasa Melayu, all you urbanised bas3rds):

1. Eligibility: For those who have an existing loan balance as at 1 June 2008, with the exception of those who have had legal action taken against them with respect to the loan, and those who have breached the loan terms and conditions in any way. So, again, this is for you diligent loan payers.

2. Interest: Calculated based on: Loan balance as at 1 June 2008 X 1% Ujrah payment X Tenure (years)

That's all you are told in their current website, but is that all you need to know? The rest of the info in PTPTN's existing FAQ pertains to some obvious technicalities to which answers make sense (a.k.a. no-brainers, go see for yourself.)

Firstly, if you have any inclination towards finance OR you've bought a car and bothered to understand your repayment schedule, you'll notice that the interest is calculated as a lump sum amount based on a backdated balance. In other words, your PTPTN Loan, which is a reducing balance loan per se, like a housing loan/mortgage, is now being converted into a hire purchase.

Secondly, the calculation provides one multiplier based on tenure. What tenure?!

A little digging reveals the old 'pekeliling' (better known as a circular) that PTPTN had issued in 2008 detailing the Ujrah-nizing somewhat. Before you ask: Yes. This started in 2008. It has yet to be implemented. Hence my earlier reference to this shenanigan as an update. The link to the circular is here ( http://www.ptptn.gov.my/docs/Pekeliling/2-2008.pdf ).

Tenure is based on the remainder of your existing loan's tenure. Unless you're applying for a loan then it's based on a schedule.

Alright, with the facts down, We get to the numbers. Let's just use mine for example:

My tenure starts from 1 December 2007. As at 1 June 2008, that leaves me with 173/180 months left. The balance I have on 1 June 2008 is RM38,031.29. At this rate, my repayment rate is RM271.06 per month.

With the Ujrah conversion, my new balance, including the lump sum Ujrah of 1%/12 X 173 X RM38,031.29 = RM5,428.84,  is RM43,514.13, and translates to RM251.53 per monthly repayment.

Save RM19.53 per month? Hell YEA! for 173 months, that's RM3,379.20! w00t!

But... is it better, really?

Within the next 24 months, I envision myself earning at least double of what I do now. So I plan to make higher repayments then. Per the old loan schedule, this will reduce the principal and in turn, the future interest charged. But per Ujrah, it doesn't matter if I make the payments earlier or later. I pay the same amount of interest anyway.

.....bah I just explained the main difference between a hire purchase loan and a housing loan.

But this is for the benefit of ex-students, and those who don't understand.

Bottom line, if you're sticking to the schedule or if you're dragging, you'll be better off with the conversion. Capische?

Marriage In The Malaysian Chinese Culture

It's coming to the end of year 2010. I'm at about a third of the average Malaysian lifespan. It just so happens that during this year, many people are getting married, with more announced to come next year.


I've gotten to thinking: Until I was part of a wedding ceremony where I was really close to the couple, I had never felt so much as a tingle in a wedding. It came as a surprised to me. I felt moved by the vows, touched by the families and friends who gave their best wishes, and I was floored by that brief moment of silence where words could not escape a mouth in the chapel. It was a beautiful moment. Love was truly in the air, and it was a celebration etched in my heart forever.


In hindsight, I began pondering the past weddings I've attended. I would never have thought of the married couple. The entire process would be just that - a process. The courtesies would be extended. The tables would be filled; Glasses raised and toasted to a proverbial eternity. Hundreds of people from families extended to the third degree will worship you for a day and be done with it, looking forward to the next. I can't help but wonder what the whole point of it all is, because I just don't feel the love.


Chinese culture in dictates 4 main ceremonies: The proposal, the pre-wedding, the wedding day, and the wedding night. In Malaysia and in such commercial/modern times, the first and last ones are ignored as it is more on superstition. There is much more practicality and celebration (which goes hand in hand with commercialisation) in the middle two ceremonies. To cut it short, the majority of the pre-wedding involves decoration and dowry, while the wedding day involves a lot of feasting and traveling. This translates to inter alia a hefty budget. Having said all that, and in the wise words of the Black Eyed Peas: Where Is The Love? Isn't that what leads to marriage in the first place?


I've heard many an explanation. Some give the excuse that the large budget is a sign of how much love you have for each other. Some say it's to let everyone know and celebrate your once-in-a-lifetime occassion. But the explanation I found most appropriate is that it's an age old tradition where in each act and item symbolically represents the commitment of the couple to each other. In our culture, we must celebrate it, and so it is imperative that it be made known to the world that a man and a woman have paired up and are now praying for a hundred children (ouch). Marriage is a celebration by itself, and in this day and age, it has become stereotypical. The love has always been there, taken for granted.


But love comes in many forms. I have witnessed quite a few. The media today has even given us a multitude of examples we have not seen, and there is much more where that came from. Yet the predominance of these ceremonies have it drilled in our thick skulls that marriage, which is by extension, love, is defined within the walls of our heritage. Now I sound like an ingrate bastard child set out to revolutionise our cultural identities. But I digress, so this brings me back to the first question: What is the point of marriage?


Me and my wrong mind think that it's simply a social milestone that's been in our heritage for heritage's sake. That said, I'm glad that I have the honour of experiencing one of the happiest marriages I've ever seen. So I conclude: It's the union that I covet, and the love that I seek. Marriage is simply an avenue of celebrating it all. I just don't see it happening for me. 


Here's to your happily ever after. YUUUUMMMMMMMM-SENG!