When one offered a loan by the bank, usually he / she only focus on the interest rate, lock-in period and MRTA requirement, if any.
Most people don't know this "Default Clause" where borrower fails to pay the installment on time.
What will happens if you have bad paying habit like.... always forgot to pay, every 2 months pay one time, delay a month or two before making up the outstanding?
Well, you have to aware of the Default Clause, example:-
Hong Leong Bank
They call it "Additional Interest" AND "Default Interest"
Seem like there are no standard clause for the default set by Bank Negara, you just have to watch out, and be a good pay master.
The different in offered rate like BLR-2.0%~2.4% and default rate like 2.0% + BLR can be as low high as 4% and multiplying the outstanding balance, for a small outstanding loan like RM300,000 you might be charged additional RM1,000 a month without knowing it. If you only know it 2~3 years later, the additional interest charged to your account could be RM24,000 to RM36,000. So, you know how serious it is now?
If you drag more than 3 months, you may even run into 'bankruptcy procedure' initiated by the financial institution.