For PTPTN loan education, there are two types of discounts:
- 20% discount for one time settlement of PTPTN education loan from 1st October 2012 to 30th September 2013 only.
- 10% discount for 12-month continuous repayment according to payment schedule or 1 time advance payment of equivalent amount, starting from 1st October 2012.
Let's see how much a person can save if he previously took a full loan (RM80000). The loan interest is 3% pa, that person graduated for 3 years and did not pay a single cent, so the total loan amount with interest is RM87200. After the person heard about Budget 2013, he decided to settle the loan with assistance from his family and relatives, so he got a discount of 20%, which is RM17440. So he actually needed to pay back only RM69760 for the education loan of RM80000.
If that person unable to settle the loan, he can still choose to pay according to the payment schedule. Let's say the monthly payment is RM500, so 1 year the repayment amount is RM6000. 10% discount which is RM600 will be given on the total repayment and adjusted in the loan account. In this case, the effective interest rate is dropped from 3% to 2%.
I'll share about the SSPN tax relief in my next post. Stay tune!