Pulau Kapas is a small island located only about 6km off Marang in the east coast state of Terengganu (about 1h north of Kuala Terengganu). It has quite and relaxed atmosphere because it is bypassed by the majority of the backpacker circuit looking for a more remote place like the Perhentian Islands. Pulau Kapas only get fairly busy on the weekends when locals come to island. There are a few good snorkeling spots around the island. All accommodations and beach are on the west coast facing the mainland. The west coast is the weather side has no sand beach, only rocks - it can be reached after a short walk through the jungle. Pulau Kapas shuts down during the monsoon season between November and February.
Cherating is the only real backpacker hub at the east coast of the peninsula on the mainland. Offering plenty of affordable chalets and a relaxed atmosphere, it is good place to stop for a night or two on the way up or down the east coast. The beach itself is not that spectacular and misses the palm directly at the beach. But it has a good vibe and few things you can do like taking a tour or renting a kayak up the river into the mangroves. There is also an active surfer scene when the waves are right. Cherating is located about 30km or 1h by local bus north of Kuantan.