Drowning in Debt? You're Not Alone
If you're reading this, you probably know the stress of juggling multiple debts - the credit card bills that never seem to go down, the personal loan payments, maybe even BNPL that seemed harmless at first. We understand.
The good news? If you own a property, there's a way out that most Malaysians don't know about. You can consolidate all your high-interest debts into your home loan at a fraction of the interest rate.
Common Debts Malaysians Carry:
Credit Cards
15-18%
Personal Loans
6-12%
Car Loans
3-5%
BNPL (Shopee/Grab)
18-24%
Overdraft
7-9%
What is Debt Consolidation?
Debt consolidation means combining multiple debts into a single loan with a lower interest rate. Instead of paying 5 different creditors with different due dates and interest rates, you make one payment each month.
The Simple Math:
❌ Before Consolidation
- Credit Card 1: RM15,000 @ 18%
- Credit Card 2: RM10,000 @ 18%
- Personal Loan: RM20,000 @ 8%
- BNPL: RM5,000 @ 24%
- Total: RM50,000 | 5 payments | Avg ~14% interest
✅ After Consolidation
- Cash-Out Refinance: RM50,000
- Interest Rate: 4%
- All debts: PAID OFF
- Total: RM50,000 | 1 payment | 4% interest
How Much Can You Save? Calculate Now
Debt Consolidation Savings Calculator
See how much you can save by consolidating your debt
Enter total of all debts you want to consolidate
Enter your total debt amount to see how much you can save
Savings shown are estimates based on interest rate difference. Actual savings depend on loan terms, fees, and your credit profile.
3 Ways to Consolidate Debt in Malaysia
| Method | Interest Rate | Requirement | Best For |
|---|---|---|---|
| 3.5% - 4.5% | Own property with equity | Property owners with significant debt | |
| Personal Loan | 6% - 12% | Good credit score | Non-property owners, smaller debts |
| AKPK Program | 0% (frozen) | Financial hardship | Those who can't get other options |
Note on AKPK: The AKPK (Agensi Kaunseling dan Pengurusan Kredit) debt management program is a last resort option. While it freezes interest, it also affects your credit score and ability to get new credit for years. Only consider this if you truly cannot manage your debts otherwise.
Why Cash-Out Refinance is the Best Option for Debt Consolidation
Lowest Interest Rate
Home loan rates (3.5-4.5%) are the lowest available. Compare to credit cards (18%) or personal loans (6-12%). Your money works for you, not the bank.
One Monthly Payment
No more juggling multiple due dates, minimum payments, and creditors. Just one payment added to your existing home loan payment.
Lower Monthly Payment
Longer tenure means lower monthly payments. This frees up cash flow for savings, emergencies, or paying off the loan faster when you can.
No Credit Score Impact
Unlike AKPK, cash-out refinance doesn't negatively impact your credit. In fact, paying off credit cards can improve your utilization ratio.
Ready to Be Debt-Free?
Find out how much you can save by consolidating all your debts into one low-interest payment.
Which Banks Offer Debt Consolidation in Malaysia?
Most major banks offer cash-out refinancing which can be used for debt consolidation. Here are banks known for their debt consolidation-friendly policies:
Maybank
View Rates →
CIMB
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Public Bank
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RHB
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Hong Leong
View Rates →
AmBank
View Rates →
Pro Tip: Apply to 2-3 banks simultaneously. Different banks have different approval criteria - what one rejects, another may approve. Our advisors can help you identify the best banks for your specific situation.
Can I Consolidate Debt with Bad Credit?
Yes, but it's more challenging. Here are your options based on your situation:
If You Own Property with Equity
This is your best option. Banks focus more on property value and income than credit score for secured loans. Even with some late payments, you may qualify for cash-out refinance. Banks like RHB and AmBank are known to be more flexible.
If Your Credit Score is Very Low
Consider improving your credit first: pay all minimums on time for 3-6 months, reduce credit utilization below 30%, and clear any outstanding CCRIS issues. Then try again for cash-out refinance.
Last Resort: AKPK
If all else fails, AKPK (Agensi Kaunseling dan Pengurusan Kredit) can help negotiate with your creditors. They freeze interest and create a repayment plan. Downside: it affects your credit for years and you can't get new credit during the program.
Documents Required for Debt Consolidation
Personal Documents
- IC (MyKad) - front and back
- Latest 3 months salary slips
- Latest 6 months bank statements
- EA form / Latest tax return (BE form)
- EPF statement
Property & Debt Documents
- Current home loan statement
- Property title / S&P agreement
- Credit card statements (all cards)
- Personal loan statements (if any)
- Other debt statements
Frequently Asked Questions About Debt Consolidation
Related Guides
Compare All Debt Consolidation Options
Cash-out vs personal loan vs balance transfer vs AKPK
Cash Out Refinance Guide
Complete guide to accessing your home equity
Refinance Calculator
Calculate how much you can save
Best Refinance Banks
Compare bank rates and features
Documents Required
Complete checklist for application