• Personal Loan BYTES FROM OUR KITCHEN

    Debt Consolidation Loan

    Debt-consolidation-loan

    A debt consolidation loan is a financing scheme that helps you manage your existing debts. The loan consolidates all your existing debts into a single account that helps you in many ways. You can save on the total interest payable and conveniently keep a track of expenses with one account. The loan can prove to be beneficial when you are looking for a way to get out of your current pile of debt.

    What Kind of Debts Can I Consolidate?

    You can consolidate a number of unsecured loans with the help of a debt consolidation loan. This includes one or more of the following types of lines of credit:

    Eligibility Criteria

    You can apply for a debt consolidation loan if you meet with the following requirements:

    • You must be older than 21 years of age.
    • You must not be older than 60 years or your retirement age by the time the loan facility matures.
    • You must be a Malaysian citizen or an expatriate working in Malaysia.
    • The minimum income requirement may vary from bank to bank.
    • You must be an active credit cardholder of any bank in Malaysia or must have an active account for 2 or more years from the following:

    Documents Required

    You will be required to present a set of documents according to your employment type. Here are the details:

    Salaried Employees

    • 1 photocopy of your MyKad (both sides).
    • Salary slips of the last 2 months or the latest EPF statement.
    • Any one of the following documents, wherever required:
      • Bank statements for the last 3 months.
      • Last BE form with the tax payment receipt.
      • Recent EA form dated within the last 12 months.

    Self-employed Individuals

    • 1 photocopy of your MyKad (both sides).
    • Latest B form with the tax payment receipt.
    • One copy of your business registration form.
    • Bank statements for the past 6 months.

    Fees and Charges

    Stamp Duty 0.5% of the approved financing amount.
    Early Settlement Charges Up to RM200 or 3% of the outstanding balance.
    Late Payment Charges 1% of the total due amount calculated on a daily basis.
    Late Payment Charges (after the loan’s maturity) IIMM*% of the total amount due (applicable for Islamic banking only).

    *IIMM: Islamic Interbank Money Market

    Debt Consolidation Plan Providers in Malaysia

    Bank Name Interest/Profit Rate Offered Loan Amount Obtainable Loan Tenure For More Info.
    Citibank 11.90% p.a. to 12.90% p.a. RM5,000 to RM150,000 24, 36, 48, and 60 months  
    Standard Chartered Bank 0.583% (flat rate) per month As per the bank’s discretion 12 to 84 months  
    Bank Islam (Base rate + 2.25)% p.a. Up to RM200,000 Up to 10 years
    Current base rate = 3.65% p.a
    Bank Rakyat A discount of up to 1.20% p.a. RM50,000 or more 1 to 10 years  

    Calculating Debt Consolidation Repayments

    In order to understand the debt consolidation plan’s working mechanism, let’s take a look at the following illustration:

    Loan Amount Tenure Current Rate Current Instalment Amount Debt Consolidation Rate Debt Consolidation Instalment Amount Savings
    RM100,000 10 years 11.37% p.a. RM1,399 10.17% p.a. RM1,331 RM68 per month
    Total savings: RM8,160

    How to Apply?

    Once you decide to opt to go for debt consolidation plan, you can approach any of the banks offering debt consolidation loans with your request for the same via the following ways:

    • Phone: Reach out to the bank via its customer service numbers and request for a debt consolidation loan.
    • At the bank’s branch: You can also apply for a debt consolidation loan by visiting the bank’s branch and submitting the details of your existing credit lines in the application form and submitting the required documents.
    • Online: You can also apply for a debt consolidation plan at the concerned bank’s website by submitting the duly filled application form along with all the required documents for the process.

    Advantages of Debt Consolidation Loan

    A debt consolidation loan can serve as the solution to your existing debt problems. Here are the advantages of this plan:

    • Pay lower monthly instalments with debt consolidation plan.
    • Save on the net interest payable with debt consolidation loan.
    • Enjoy peace of mind by conveniently tracking your monthly expenses with only one account.

    Keep in Mind

    Before you decide to take up a debt consolidation loan to clear off your existing debts faster, you should keep certain things in mind.

    • The loan approval directly depends upon your credit score. If your credit score is high, your chances of getting a debt consolidation loan approved will be higher.
    • Taking a debt consolidation loan might affect your credit score. If you fail to make timely payments, your credit score can drop.

    Debt Consolidation Loans for Bad Credit

    If you want to get a debt consolidation loan, but your credit score is lower than the average limit of credit score, you can opt for a debt management plan. Debt management plan is offered by multiple debt consolidation and credit companies. These companies can help you find the best plan for your credit score. Keep in mind that you can get a debt consolidation loan with a low or bad credit score, but the interest rates in such cases may be higher than standard rates.

    How are Credit Score and Consolidation Plan Related?

    Your credit score directly affects the approval of your loan application approval. If your credit score is on the higher side, you can get the lowest rates of interest with your debt consolidation loan and the loan can be approved faster. Whereas, with a low credit score, your chances of getting a loan approval drops and if you get a loan approved, the interest rates associated to it will be higher.

    FAQs

    Q. How much loan amount can I get with a debt consolidation loan?

    A. The amount obtainable can vary from bank to bank. The loan amount also depends upon your monthly salary and the amount of debt you have currently among the different lines of credit. For example, you can get as much as 10 times your monthly salary with Citibank’s debt consolidation plan.

    Q. How much can I save with debt consolidation plans?

    A. The amount you can save depends upon the package and the bank offering the loan. In order to maximise your savings related to interest payable, maintain a good credit score. By maintaining a decent credit score, you can get the plans with low rates and flexible repayment tenures.

    Q. How do I choose the right debt consolidation plan for my current requirements?

    A. In order to find the perfect debt consolidation plan for your current debt requirements, you are required to thoroughly research and compare the plans available according to the amount obtainable, repayment tenure range, interest or profit rates associated with these plans, and fees and charges you have to bear with these plans.

    Q. Is there any other document I need to submit for the loan application process?

    A. If you are consolidating your credit card debts, you might require to present the recent credit card statements or latest closure quotation of personal loans if you currently have loans under your name.

    Q. Does the debt consolidation loan application process require me to be accompanied with a guarantor?

    A. You are not required to bring a guarantor to the application process of your debt consolidation loan.

  • reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.