PTPTN 1% Ujrah Payment

For those who took a PTPTN study loan before 2008, you have probably heard of the PTPTN offer to change the 3% service charge for existing loans  to the 1% Ujrah payback scheme.

But before you register to convert to the Ujrah Payment method at PTPTN’s website, take some time to read what I have to say here.

Ujrah basically means “Upah” or pay in English. A more familiar term is “service charge”, so PTPTN is just re-naming the loan payment scheme to seem more Islamic.

But I guess that is the idea.

To convert the loan payment scheme to a more Islamic method.


However, the conversion to ujrah method  of payment only applies to those who have not finished payment by 2008. But for those eligible, what does this ujrah payment mean to you? Refer to the table below taken from the Pekeliling Bilangan 2 2008 of the PTPTN:


I guess the Table is self explanatory. It basically shows how much you save by opting for the Ujrah payback method.

How and  what is the formula they use to count the payment?

Very simple,

For example, RM5000 borrowed for a period of 5 years using the Ujrah method :

RM5000 x 1% x 5 = RM250  of total Ujrah to be paid to PTPTN

or RM50 of service charge per year to be paid to PTPTN, meaning you need to pay RM1050  per year. This is the fixed amount that has to be paid each year, whether or not you settle the payment early. Settling it later than the scheduled payment date and a compensation (penalty) will be charged.

As for the 3% baki berkurangan method (as you already know) it basically depends on how much of the loan you have left at the end of the year, 3% will be added to that amount each year. The faster you settle the loan the less you pay. The longer it takes you to pay, the more you have to pay.

Spoken like a true “along”.

But as the table shows above, if you payback according to the timeline given by PTPTN you end up paying more that if you pay using Ujrah.

more info on how the payback is calculated, please refer to the Pekeliling Bilangan 2 2008 of the PTPTN.

Bottom line

Whoa….not so fast, while it shows that the 1% ujrah method shows a smaller number of service charge to be paid to PTPTN, if you are disciplined enough you can save more if you settle the loan earlier than scheduled.

But it will be bad if you are not disciplined enough to even pay on time. This 3 % baki berkurangan method is an example of the “riba” the Islamic banking is trying to avoid so much. But it’s not the 3% that its against, it the uncertainty of how much of service charge that has to be paid is the problem.

But having said that, personally, I would rather stick to the 3% baki berkurangan method as it gives a reason to pay back the loan as quickly as possible and as my uncle would say, the most Islamic thing to do is to pay your debts as soon as possible, because you don’t know when you will die.

It’s not over yet

For those thinking of changing to the 1% you might want to consider reading the terms and conditions stated in the form here :

Read the terms and condition stated below the part that you are supposed to fill in. For those lazy to read it, here are some terms that you have to consider :

  • you will have to pay through salary deduction via LHDN, so there is no running away.
  • you will have to inform PTPTN 3 months in advance if you are going abroad during the paymend period
  • you will still be charged a 1% penalty if you don’t pay on time.
  • And this is the best part  “23. Walau apa pun yang tersebut diatas, PERBADANAN berhak pada bila-bila masa menurut budi bicara mutlaknya meminda atau menambah terma-terma atau syarat-syarat yang terkandung di dalam PERJANJIAN PEMBIAYAAN PENDIDIKAN.”

The real Bottomline.

For guys like me, a freelance web-designer, it’s pretty hard to say how much I can afford to pay a month simply because there are ups and downs in business. But honestly I don’t want to convert to Ujrah simply because of the condescending terms and conditions.

But having said that, if you have a stable career and have settled down, feel free to apply. At least you are sure to payback the loan on time, unless they change the terms and conditions “menurut budi bicara mutlaknya”.

Make your decision wisely.

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About iMyn

iMyn is the Co-Founder and some say Chief Content Officer of Has a craze in travel, writing and current issues.
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22 thoughts on “PTPTN 1% Ujrah Payment

  1. so in short are u saying that if i dont have a stable income yet, do not apply for ujrah? coz im planning to pay rm 100 monthly for the beginning…and then when i have my income, pay more…what should i do? -confused-

  2. Well, actually, if u sign ur agreement after 1st Jun (as mentioned in the pekeliling), u will automatically use the ujrah method to payback. So no choice. But if u r on the 3% system now, u can pay rm100 or whatever amount u want. Why i say if u dont have stable job dont apply ujrah is because they will straight away deduct from ur salary since u have to declare ur employer information as well as kwsp and lhdn. So whatever u do, they can still deduct ur salary. Even if u quietly change jobs the can still get kwsp or lhdn to collect from u. If u still have no money, they will claim from ur garantor lah. So like it or not u cant choose how much u want to pay.

  3. Pros of ujrah:
    -U pay less than before, assuming u pay according to schedule
    -u dont have to worry about having to transfer money to ptptn every month bcoz its deducted from ur salary.

    Cons of ujrah
    – u r bound by their terms and conditions. Even if u want to go out of the country, u have to make a formal letter to inform ptptn abt it.

    Pros of the 3% method
    – you are somewhat free to pay how much u want per month, as long as its more than the service charge.
    – if u settle the loan faster, u dont have to pay a lot of service charge, since the service charge is calculated according to 3% of the remaining loan amount at the end of the year. The less that amount is, the less the service charge.

    Cons of the 3% method.
    -in normal circumstances, you pay more than the 1% ujrah

  4. Thanks for putting this up! I was wondering about the same thing!
    I pay my ptptn loan in bulk i.e. not monthly.

    also another thing is that they have this clause:

    PERBADANAN berhak mengenakan Upah Pengurusan Pembiayaan sebanyak 1% setahun atau apa-apa kadar
    yang ditetapkan oleh PERBADANAN dari semasa ke semasa ke atas Jumlah Pembiayaan sepanjang tempoh
    bayaran balik yang ditetapkan mulai Tarikh Kuatkuasa Bayaran Balik Pembiayaan Tersebut.

    what do they mean by apa-apa kadar yg di tetapkan? do they mean they can change the 1% whenever they want?

    1. I think kadar-kadar yang ditetapkan refers to the denda lewat pembayaran. that is calculated seperate from the 1% annual ujrah. the denda lewat is 1%, stated in one of the agreement clauses..

  5. Quote “And this is the best part “23. Walau apa pun yang tersebut diatas, PERBADANAN berhak pada bila-bila masa menurut budi bicara mutlaknya meminda atau menambah terma-terma atau syarat-syarat yang terkandung di dalam PERJANJIAN PEMBIAYAAN PENDIDIKAN.” ”

    I have some question regarding the quote above. Aren’t the original contract (the 3% contract) also stated the same thing?
    If I am not mistaken, the terms and conditions are almost similar in both contracts.

    err… Do you know if we can repay the “ujrah” back in one whole lump sum when we have enough money? I know that it’s trough salary deduction but is it possible to pay back in one whole lump sum in the future?

    1. There are similarities between the 3% agreement and the 1% agreement but at least the 3% agreement didnt ask you to disclose your KWSP account, your employer information and other personal information.

      I’m sure you can pay lump sum for the ujrah, the question is, do you have to still pay the 1% if you settle in one shot. Well, I’m not quite sure, but if the Ujrah uses the same principal as an Islamic Banking loan, then even if you pay lump sum, the lump sum amount will still include the 1% service charge. Kindda sucks huh? Well, this was a complaint about Islamic finance, where the payment is structured in such a way, that there is no motivation to pay up early.

      1. It’s not that Islamic banking doesn’t allow to waiver the 1% service charge, its the bankers who usually refuse to negotiate

  6. Thank you for the fast reply. I am having headache for applying the Ujrah….

    I am not sure about Islamic Banking but I will go to PTPTN and ask about how they compute for the lump sum payment when I want to do so in the future.

    But as far as I know, in order for me to get the same total interest that I need to pay for PTPTN, I have to settle the loan within 5 years to 10 years time using the 3% charges. So, I don’t really have any complain.

    Regarding the KWSP information, did you provide the account number for them? I got their offer letter but it is just asking me to allowed them to contact KWSP to get my information. I have sign the same letter 3/4 yrs ago when I apply PTPTN…..

    Employer’s info…yaa…i did provide them with my current employer’s name, address and phone…that’s all…….if I suddenly change company and forget to update that info…then i guess that info is useless too…hahaha…just a joke, just a joke…

    1. Well, I started taking PTPTN way back in 2002, so maybe the rules then were different. I was not asked for any personal details whatsoever, but if I applied for the Ujrah 1%, I have to do that.

      But Ujrah is not all bad lah. I mean if you have a stable job and you don’t want to worry about payment, its good for you. But if you are pretty sure you can afford to pay a lot in one year (or better still, lump sum), then don’t change. Take note that if you plan to pay lump sum, do it as soon as possible. The total loan you need to pay lumpsum 5 YEARS FROM NOW is more than the total loan you pay lump some NOW due to compound interest. (Try reading the post on compound interest on if you’re not sure about it).

      Another way is to use unit trust to your advantage. Save money monthly in unit trust, and in 5 years or so you will have enough money yo pay lump some. Since the interest on unit trust is at least 10% per year (conservative estimate but usually it’s more if you take a more aggressive portfolio), you will end up paying less than what you borrowed. You just have to find a way to get the PTPTN guys off your back for those 5 years..haha

  7. yeah…i understand that…

    That’s why I prefer to drag the loan longer as unit trust or share offer a higher interest rate 😀

    I do study things like simple interest and compound interest in my degree and I took UTC exam before…so I kinda know a bit of those:P

    I just kinda worried because of lots of negative comment bout this Ujrah. I guess maybe you are right. The contract that we sign when we borrowed are different…anyway thanks a lot for the info….now i know that i should use Ujrah as i can drag it longer…ooops…so bad of me..:P It is nice to chat with you and thanks again 🙂

  8. Thanks for shedding some light in this. I applied to convert mine to Ujrah without knowing what it is, really. I borrowed from PTPTN in 2002, and I have been paying double the amount I need to pay almost every month to speed up the loan payment. Now I have about RM2000+ left to pay, so I’m not sure if I should just stick to the 3% charges or convert to Ujrah. All these figures are giving me headaches 😀

    1. I guess just stick to your current plan. I think at RM2000 left, it doesn’t make much difference. Besides, if you change to Ujrah, you risk giving away personal information to the government, which is not really a good idea..

  9. Whoa ‘Even if u want to go out of the country, u have to make a formal letter to inform ptptn abt it.’ <– So inconvenient for me. Thanks for the heads up. I got the forms and stuff and were about to confirm next week. I got my loan way back from 2006. Thanks again for breaking this down for us. 😀

    1. Yeah, actually the bad thing about the 1% Ujrah is the bond that comes with it. But then again, they cant control everyone from going out of the country, right?

  10. Dear iMyn,
    thanks for the valuable insight. Tomorrow is the last day of the Ujrah offer, and after reading your article, now Im definitely sure no to change my 3% contract.

    You are a webdesigner? I cant find your portfolio anywhere in this site!

    1. Yup, but now it more like “I WAS a webdesigner”. I’m trying not to promote myself as a webdesigner anymore because I have shifted my interest to developing content, such as this website. Planing to create more websites like this in the near future.

  11. Hi iMyn, need to clarify something with you, i’ve already converted to ujrah and planned to pay back more than I should pay monthly i.e. ahead of schedule, do I still have to pay the total of ujrah? taking your example RM5000 x 1% x 5year total ujrah is rm250. let say I pay them double so I’ll complete it within 2.5 years. Do I still have to pay them RM 250 instead of RM 100..

    1. Well one of the features of an Islamic loan is the amount paid cannot be affected by time. So, no matter how much you pay must be constant no matter how long you take to pay it. The thing is, the service charge is calculated in the beginning of the repayment period. once it’s set, it cant be changed.

      So the answer is no, if you pay double, you don’t change the amount of service charge because the way it is calculated is as follow :

      RM5000 + 1% = Rm5000 + RM50 = RM5050 –> this is the amount that will be divided into 5 years = RM5050 / 5 years = RM1010 per year is the instalment

  12. hi iMyn! I think I prefer the 1% agreement. However, I want to further my studies to master level for 2 years so I have to apply for “Penangguhan Bayaran Balik PTPTN”..which mean that I will delay my payment for 24 months. but one of the conditions in the form states that “kos pentadbiran akan dikenakan di sepanjang tempoh penangguhan”. does it mean that I will be charged an extra cost for delaying my payment for 24 months? as you mentioned, they will charge 1% for late payment. so how much do I have to pay for that extra cost? please help! thanks.

    1. I think if you apply for “penangguhan bayaran”, you wont be charged. But if you dont tell PTPTN that you want to study, then they will charge 1% late payment. But again you need to confirm with PTPTN, as I’m not 100% sure about the late charges related to “penangguhan bayaran”

  13. PTPTN loan start to gain profit NOT to help student to further studies. Therefore, NOW, they start back at even if u applied for ujrah they still wanted the riba 3% to balance to date then only calculating future 1% ujrah system. Final work, it’s just for the profit but not helping students!

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