BNPL vs Personal Loan: Which is Better for You in Malaysia 2025?
Buy Now Pay Later has grown to RM 2.8 billion in Malaysia. Should you use BNPL or get a personal loan? We compare both options in detail.
BNPL Market Size (Q4 2024)
RM 2.8 Billion
Overdue Payment Rate
2.9%
Down from 5.8% in 2023
Personal Loan Growth (Jan 2025)
RM 8.82 Billion
The rise of Buy Now Pay Later (BNPL) services like Atome, GrabPay Later, and SPayLater has revolutionized how Malaysians shop. But is BNPL always the better choice compared to traditional personal loans? This comprehensive guide helps you decide.
Quick Comparison Table
| Feature | BNPL | Personal Loan |
|---|---|---|
| Typical Amount | RM 50 - RM 5,000 | RM 5,000 - RM 250,000 |
| Interest Rate | 0% (if paid on time) | 2.5% - 8% p.a. |
| Repayment Period | 3-12 months | 1-7 years |
| Approval Time | Instant (seconds) | 24 hours - 3 days |
| Credit Check | Minimal or none | Required (CCRIS/CTOS) |
| Documentation | IC only | IC, payslips, bank statements |
| Late Payment Penalty | RM 10 - RM 50 | Additional interest + penalty |
| Best For | Small purchases | Large expenses |
BNPL: Pros and Cons
✓ Advantages of BNPL
No Interest if Paid On Time
Most BNPL services offer 0% interest if you complete all payments on schedule. This makes it cheaper than credit cards (15-18% p.a.) or personal loans.
Instant Approval
Get approved in seconds at checkout. No waiting days for loan approval. Perfect for urgent purchases or flash sales.
No Paperwork
Only need your IC/MyKad. No need to submit payslips, bank statements, or employment letters like traditional loans.
Build Spending Discipline
Fixed payment schedule helps budget better. Breaking large purchases into smaller monthly amounts makes expensive items more manageable.
✗ Disadvantages of BNPL
Small Amount Limits
BNPL typically limits you to RM 50 - RM 5,000 per transaction. Not suitable for major purchases like renovations, weddings, or education expenses.
Encourages Overspending
The ease of BNPL can lead to impulse purchases. Having multiple BNPL accounts makes it hard to track total debt. Data shows BNPL use is rising alongside household debt.
Late Payment Hurts Credit
Starting 2025, BNPL providers report to CTOS and other credit bureaus. Late or missed payments will damage your credit score, affecting future loan applications.
Limited to Retail Purchases
BNPL can only be used at participating merchants. Cannot use for rent, medical bills, loan payments, or cash needs.
Personal Loan: Pros and Cons
✓ Advantages of Personal Loans
Large Loan Amounts
Borrow RM 5,000 - RM 250,000 for major life expenses: home renovation, wedding, education, medical emergencies, or debt consolidation.
Cash to Your Account
Money is deposited directly to your bank account. Use it for any purpose, not limited to shopping at specific merchants.
Longer Repayment Period
Spread payments over 1-7 years. Monthly installments are lower and more manageable compared to BNPL's 3-12 month schedule.
Builds Credit History
Consistent loan repayments improve your CCRIS/CTOS score, making it easier to get approved for future home loans, car loans, or business financing.
✗ Disadvantages of Personal Loans
Interest Charges
Personal loans charge 2.5-8% p.a. interest. Over a 5-year loan, you could pay RM 5,000+ in interest on a RM 50,000 loan.
Strict Approval Requirements
Need good credit score, stable income (min RM 2,000/month), employment for 6+ months, and debt service ratio below 70%. Many applicants get rejected.
Processing Time
Takes 24 hours to 3 days for approval and disbursement. Not suitable for urgent purchases. BNPL approves in seconds.
Early Settlement Penalties
Some banks charge 3-5% penalty if you pay off the loan early. You are locked in for the full tenure.
Which Should You Choose? Real Scenarios
Buying RM 1,200 Smartphone
BNPLSplit into 3-4 monthly payments of RM 300-400 with 0% interest. Much better than paying credit card interest or taking a loan.
RM 50,000 Home Renovation
Personal LoanBNPL cannot handle this amount. Personal loan at 5% p.a. over 5 years = RM 943/month. Manageable and predictable.
RM 3,000 Laptop for Work
BNPLIf merchant accepts BNPL, split into RM 1,000 x 3 months = 0% interest. Save on loan processing fees and interest.
RM 15,000 Wedding Expenses
Personal LoanToo large for BNPL. Personal loan gives you cash to pay multiple vendors (venue, catering, photography). Flexible 2-3 year repayment.
Multiple Small Online Purchases
Neither - Use Cash/DebitDanger zone! Multiple BNPL accounts make it hard to track spending. Easy to accumulate RM 5,000+ debt across 10 merchants without realizing.
📚 Compare All Loan Options
📖 Complete Personal Loan Guide
Everything about personal loans in Malaysia 2025: Rates from 3.5%, approval tips, DSR calculator, required documents. RM 5,000 - RM 300,000 available.
Read Full Guide →🔍 Home vs Personal vs Car Loans
Complete comparison of all loan types: Interest rates, terms, eligibility, pros & cons. Find the best financing option for your needs.
View Comparison →📊 Understanding Interest Rates
Fixed vs variable rates explained. Learn which type saves you more money and when to choose each option for loans.
Learn About Rates →Final Recommendation
BNPL is excellent for small to medium purchases (RM 50 - RM 5,000) at participating merchants when you can pay off in 3-6 months. The 0% interest is unbeatable. However, for large expenses above RM 5,000 or when you need cash flexibility, personal loans are the better choice despite interest charges. The key is discipline - whether you choose BNPL or loans, always ensure you can afford the repayments before committing.