Quick Comparison: All Debt Consolidation Options
| Option | Interest Rate | Max Amount | Approval | Credit Impact | Best For |
|---|---|---|---|---|---|
| Cash-Out Refinance | 3.5-4.5% | Up to 90% equity | 6-10 weeks | None | Property owners with equity |
| Personal Loan | 6-12% | RM50k-150k | 1-3 days | Hard inquiry | Fast cash, no property |
| Balance Transfer | 0-6% promo | Credit limit | 1-2 weeks | None | Credit card debt only |
| AKPK DMP | 0% (negotiated) | All debts | 2-4 weeks | Negative | Severe hardship |
| Debt Settlement | Varies | Negotiated | Months | Severe negative | Last resort |
* Cash-out refinancing highlighted as best overall option for property owners
Cash-Out Refinance (Best for Property Owners)
Cash-out refinancing lets you refinance your home loan for more than you currently owe, and receive the difference as cash. Use this cash to pay off all high-interest debts in one go.
How It Works:
- Your property is valued by the bank
- You can borrow up to 90% of property value
- New loan pays off your old mortgage + gives you extra cash
- Use the cash to clear all high-interest debts
Current Interest Rates:
Most banks offer 3.5% to 4.5% p.a. for cash-out refinancing. Compare this to credit cards at 18% or personal loans at 8-12%.
Pros
- • Lowest interest rate (3.5-4.5%)
- • Large amounts available (based on equity)
- • No credit score impact
- • One simple monthly payment
- • Tax-deductible interest (in some cases)
Cons
- • Requires property ownership
- • Longer approval process (6-10 weeks)
- • Legal and valuation fees apply
Who Should Choose This:
Property owners with at least 20% equity who want the lowest possible rate and can wait 6-10 weeks for approval. Ideal for consolidating large debts (RM50,000+).
Property Owner? Cash-Out is Your Best Option
Calculate how much you can access from your property equity and start consolidating today.
Get Cash-Out QuotePersonal Loan
A personal loan is an unsecured loan you can use to pay off multiple debts. Since there's no collateral, rates are higher than cash-out refinancing but approval is much faster.
How It Works:
- Apply with income documents
- Get approved in 1-3 days
- Receive lump sum to pay off all debts
- Repay over 1-7 years at fixed rate
Interest Rates:
Typically 6% to 12% p.a. depending on your credit profile and bank. Still much better than credit card rates.
Pros
- • Fast approval (1-3 days)
- • No property required
- • Fixed monthly payment
- • Available from many banks
Cons
- • Higher rates than secured loans
- • Hard inquiry affects credit
- • Max amount limited (RM50k-150k)
- • Requires good credit score
Who Should Choose This:
Non-property owners who need funds quickly and have a good credit score. Also suitable for smaller debt amounts where cash-out refinancing wouldn't be cost-effective.
Balance Transfer
Balance transfer lets you move credit card debt to a new card with 0% promotional interest for a limited period. Good for short-term relief, but requires discipline to pay off before promo ends.
How It Works:
- Apply for balance transfer card/facility
- Bank pays off your existing credit card debt
- You pay 0% interest for promotional period (6-12 months)
- Must pay off before rate reverts to 17-18%
Banks Offering Balance Transfer:
| Bank | Promo Rate | Revert Rate | Fee |
|---|---|---|---|
| Maybank | 0% for 12 months | 17.5% | 3-5% |
| CIMB | 0% for 6 months | 18% | 3% |
| Public Bank | 0% for 12 months | 18% | 3.5% |
| Hong Leong | 0% for 12 months | 17.5% | 3% |
| RHB | 0% for 6 months | 18% | 4% |
Warning: Revert Rates!
If you don't pay off the full balance before the promo ends, the rate jumps to 17-18%. Also, there's usually a 3-5% upfront fee on the transferred amount.
Pros
- • 0% interest during promo
- • No collateral needed
- • Quick approval
- • No credit score impact
Cons
- • Only for credit card debt
- • Limited to credit limit
- • High revert rate (17-18%)
- • Upfront fees apply (3-5%)
Who Should Choose This:
Those with credit card debt only who are confident they can pay off the full amount within 6-12 months. Not suitable if you can't guarantee full repayment before promo ends.
AKPK Debt Management Programme (DMP)
AKPK (Agensi Kaunseling dan Pengurusan Kredit) is a government agency under BNM that helps Malaysians in financial distress. They can negotiate with creditors to reduce or eliminate interest on your behalf.
How It Works:
- Contact AKPK for free counseling
- They assess your financial situation
- AKPK negotiates with your creditors
- You make one monthly payment to AKPK
- AKPK distributes to creditors
What AKPK Can Negotiate:
- Reduced or 0% interest rates
- Waived late payment fees
- Extended repayment period
- Lower monthly payments
Pros
- • 0% interest possible
- • All debts covered
- • Free service
- • Professional counseling
- • Legal protection from creditors
Cons
- • Affects CCRIS record
- • Can't get new credit during program
- • Strict compliance required
- • Takes years to complete
- • Credit impact lasts after completion
How to Apply:
- 1. Call AKPK at 1800-88-2575 (toll-free)
- 2. Visit any AKPK branch for counseling
- 3. Bring IC, salary slips, and debt statements
Who Should Choose This:
Those who genuinely cannot afford their current debt payments and are at risk of default. Do NOT choose AKPK just to get lower rates - the credit impact is significant. Choose this if you're truly in financial distress and other options aren't available.
Debt Settlement / Negotiation (Last Resort)
Debt settlement involves negotiating with creditors to accept a lump sum payment that's less than what you owe. This severely damages your credit and should only be considered when all other options have failed.
How It Works:
- Stop making payments (damages credit)
- Save money for lump sum offer
- Negotiate with creditors (or hire agency)
- Creditor accepts reduced amount to close account
Risks and Consequences:
- • Severe credit score damage (can take 7+ years to recover)
- • May face legal action from creditors
- • Forgiven debt may be taxable income
- • Collection calls and harassment
- • Debt settlement companies charge high fees (15-25%)
Pros
- • Can reduce total debt owed
- • Faster than full repayment
- • Option when truly broke
Cons
- • Severe credit damage
- • Tax implications
- • Legal risks
- • High fees if using company
- • Stressful process
Who Should Choose This:
Only those who have exhausted all other options, have no assets, and cannot afford AKPK payments. This is truly a last resort before bankruptcy. Consider AKPK first - it offers similar benefits without the severe credit damage.
Which Option is Right for You?
Answer these questions to find your best option:
Do you own a property with equity?
No property, but need fast cash?
Only credit card debt, can pay off in 6-12 months?
Can't afford any payments, in severe hardship?
All options exhausted, truly broke?
How Much Can You Save?
Use our calculator to see your potential savings from debt consolidation.
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