Hi my name is Ka Hoe and I’m the founder of J Advisory and today I’m back with another money misconception, which I recently had a zoom meeting with one of the bankers that reach out to me, thank you so much. So, time and time again, I cannot address this misconception, more or enough. So, I think many of us actually have this understanding that, even my self (la), you know, when I first bought my first house.
And this understanding that when you get a loan approve with Bank A, for example, is compulsory to buy MRTA from that bank right? So, is it true, or is it not? So after when I did my research, ladies & gentlemen, actually you don’t, it’s not compulsory for you to actually purchase your MRTA with the bank that approve your loan.
Of course, some of the not so professional officer, loan officer may pressure you to getting it but actually it is your choice (who to purchase it from). So what is a MRTA? Okay, some you may be thinking like ,what’s MRTA, what are you talking about? So MRTA is called ‘Mati Rumah Tentu Ada’. No, (I was) just joking. it’s actually call ‘Mortgage Assurance Term Assurance’.
So what does it do is basically, when you get a bank loan, the bank feels that if should something happened to you because you’re going to repay the loan over the course of 30 years, that if you die or you are disable, they are able to recuperate that money that they loan to you from the insurance company.
So, with proper education even Bank Negara (Central Bank) have mentioned it many times in their guideline that no banks are able to force you into getting an insurance policy with them, even though they approve your loan. The bank’s duty is in the business of getting loans right, or approving loans right. So, that’s as far as they go.
Of course, I understand that as a loan officer right now, (it) is so competitive they have a lot of sales target not only just the loan sales target, but they also have the credit card sales the insurance sales, which some of the listeners out there could relate, in the sense that how they are being pressured into getting a MRTA with them right.
So, if you’re one of them, you know, do let me know in the comments section, because I do share a lot of this information with my own clients. But I guess I don’t do it enough so that’s why I wanted to make this video for you. So, if ever you guys are being pressured into it, feel free to go into Bank Negara’s website which I’m going to place it into the link below. Hopefully I can find it.
Alright, and I’ll see you guys soon. Let me know if you have any other money misconception that you want me to answer, you know. Drop me, (or) drop the topic in the comments section as well. So, see you guys.
Photo Credit – David Bee
p.s I couldn’t find the circular I saw a few years ago in Bank Negara website but I manage to google another article HERE