What is a Debt Consolidation Personal Loan?
A debt consolidation personal loan is an unsecured loan you can use to pay off multiple debts at once. Unlike cash-out refinancing which requires property, a personal loan only requires proof of income and a decent credit score.
How It Works:
- Apply for a personal loan with your income documents
- Get approved in 1-3 days (some banks offer same-day approval)
- Receive a lump sum to pay off all your existing debts
- Make one fixed monthly payment over 1-7 years
Personal Loan vs Cash-Out Refinance
The main difference is that personal loans don't require property as collateral. This makes them faster to get but comes with higher interest rates (6-12% vs 3.5-4.5%). If you own property with equity, cash-out refinance is usually the better option.
Personal Loan vs Cash-Out Refinance: Which is Better?
| Factor | Personal Loan | Cash-Out Refinance |
|---|---|---|
| Property Required | No | Yes |
| Interest Rate | 6-12% | 3.5-4.5% |
| Maximum Amount | RM50,000 - RM150,000 | Up to 90% of property equity |
| Approval Time | 1-3 days | 6-10 weeks |
| Credit Impact | Hard inquiry | Minimal |
| Best For | Renters, smaller debts, urgent needs | Property owners with large debts |
Own property? You'll likely save more with cash-out refinance.Learn more about cash-out refinance →
Best Personal Loans for Debt Consolidation 2026
Here are the top banks offering personal loans suitable for debt consolidation in Malaysia:
| Bank | Interest Rate | Max Amount | Tenure | |
|---|---|---|---|---|
| Maybank | 6.5-12% | RM150,000 | Up to 7 years | View Details → |
| Public Bank | 6.8-11% | RM150,000 | Up to 7 years | View Details → |
| CIMB | 7-12% | RM100,000 | Up to 7 years | View Details → |
| Hong Leong | 6.5-11% | RM150,000 | Up to 7 years | View Details → |
| RHB | 7-12% | RM100,000 | Up to 5 years | View Details → |
| AmBank | 6.8-11% | RM150,000 | Up to 7 years | View Details → |
* Rates are indicative and may vary based on credit profile. Contact banks for exact rates.
How Much Can You Borrow?
Your personal loan limit depends on your income and existing debt commitments. Here's a rough estimate based on monthly income:
| Monthly Income | Estimated Max Loan |
|---|---|
| RM3,000 | RM30,000 - RM50,000 |
| RM5,000 | RM50,000 - RM80,000 |
| RM8,000 | RM80,000 - RM120,000 |
| RM10,000+ | RM100,000 - RM150,000 |
* Estimates assume no existing loan commitments and DSR below 60%. Actual amounts may vary.
Not Sure if You Qualify?
Get a free assessment and find out how much you can borrow for debt consolidation.
Who Should Use a Personal Loan for Debt Consolidation?
Personal Loan is Right for You If:
- You don't own property or are renting
- Your total debt is under RM150,000
- You need fast approval (days, not weeks)
- You don't want to touch your home loan
- Your credit score is decent to good
Consider Other Options If:
- You own property with equity - cash-out is cheaper
- Your debt exceeds RM150,000
- You have very poor credit
- You can't afford monthly payments - consider AKPK
Own Property? Cash-Out Refinance May Be Better
If you own a property with equity, you can likely get a much better rate with cash-out refinance (3.5-4.5%) compared to personal loans (6-12%). This could save you thousands in interest.
Example Savings:
RM50,000 debt at 12% personal loan = RM6,000/year interest
RM50,000 debt at 4% cash-out = RM2,000/year interest
You save: RM4,000/year
Documents Required for Personal Loan
For Salaried Employees
- IC (MyKad) - front and back
- Latest 3 months salary slips
- Latest 3-6 months bank statements
- EA form / Latest tax return (BE form)
For Self-Employed
- IC (MyKad) - front and back
- Business registration (SSM)
- Latest 6 months bank statements
- Latest 2 years tax returns (B form)