Key Takeaways
- Managing high credit card debt can be overwhelming, but consolidation offers a practical solution to regain financial stability.
- Key strategies for credit card consolidation include balance transfers, personal loans, restructuring credit card loans into term loans, and enrolling in AKPK programmes.
- Bluebricks specialises in assisting individuals with high credit card debt by facilitating personal loan applications.
If you’re dealing with high credit card debt, Malaysian banks may reject your loan application, even if you have a high income.
However, don’t give up just yet! There are options available, including credit card consolidation, to help you regain control of your finances.
In this article, we’ll explore methods to secure a personal loan, even with high credit card debts. Here’s what you need to know:
- Loan Amount: Calculate the total amount you need by adding up your current credit card debt, personal loans, external debts, and immediate financial obligations.
- Interest Rates: They can range from as low as 3% per year to as high as 18%, depending on your credit profile and the lender’s terms.*
- Loan Tenure: You may qualify for repayment periods of up to 10 years, offering flexibility in managing monthly payments.*
*Note: Loan interest rates and tenure are determined based on your personal circumstances, such as:
- Where do you work?
- Are you single or married?
- Are you employed full-time, on contract, or self-employed?
- Is your basic salary over RM5,000?
- Do you live in an expensive urban area or a more affordable suburb?
- Are you single or married, and what is your educational background?
- High-risk industries, such as tourism during the pandemic, may affect your eligibility.
Solutions for Personal Loans for Credit Card Consolidation
At Bluebricks, we specialise in credit card consolidation, offering a practical method to manage high debt. Our approach involves:
- Settling your credit card debts WITHOUT requiring collateral, calculating interest, or needing a guarantor.
- Submitting the consolidated debt as part of a personal loan application to the bank.
- Repaying the principal amount and our one-time service fee once the loan is approved—without any upfront payment.
Why This Method Works for Clients with High Credit Card Debts
If you have high credit card debts, your credit profile may be considered unfavourable by banks. This is why we focus on resolving 90% of your credit card debt before appealing for a loan.
By doing so:
- Your credit cards will show little to no outstanding balances.
- Your Debt Service Ratio (DSR) will be lowered, reflecting stronger repayment ability.
- This improves your creditworthiness, allowing us to submit a loan application with a higher likelihood of approval. Without this step, the chances of rejection remain high.
Advantages and Disadvantages of Personal Loans for Credit Card Consolidation
Advantages:
- Immediate cash in hand to address urgent needs.
- Reduced monthly instalments, depending on how much cash you require upfront.
- Improved monthly cash flow, easing financial strain.
- A temporary solution that offers breathing room to stabilise finances.
- Freedom from banks chasing overdue payments.
- Consolidate all debts into one or two loans, simplifying monthly repayments.
- An improved credit report, enabling future purchases like a car or house.
Disadvantages:
- A consultation fee is required.
- Bank loan approval may take 30 days or longer.
- The loan adds to your overall financial liability.
Read More: Personal Loan for High Commitment Individuals in Malaysia
Important Considerations for Personal Loans for Credit Card Consolidation
When considering credit card consolidation, it’s essential to understand our process and eligibility criteria. At Bluebricks, we aim to provide transparent services without any hidden fees.
1. No Hidden or Upfront Fees
- We do not charge additional interest, upfront payments, lawyer fees, document fees, or account opening fees. This ensures you can focus on resolving your debts without unnecessary financial strain.
2. Eligibility Requirements
- Our services are available to salaried employees earning more than RM4,000 per month, with EPF deductions.
- Applicants must have at least six months of confirmed employment status.
3. Ineligible Applicants
- We cannot assist clients with ongoing legal cases or summons.
- Business owners, commission-based workers, or individuals earning a basic salary below RM4,000 are not eligible.
Our Service Fee for Personal Loans for Credit Card Consolidation
The service fee for managing credit card consolidation typically ranges from 15% to 30%. Several factors influence the final fee, including:
1. Issues in Your CTOS Report
- What specific problems need to be addressed?
- How much money is required to resolve the outstanding issues?
- How many banks can we work with after settling your credit card debts?
- What is the potential loan amount you can borrow once the credit card debts are cleared?
2. Your Income Situation
- Is your income stable and consistent?
- What is your current income level?
- Which industry do you work in, and does it affect perceived risk?
3. Debt Service Ratio (DSR)
Is your DSR above 50%, potentially affecting your repayment ability?
4. Lender Risk Assessment
Does the lender consider you a high-risk or low-risk borrower?
5. Cash-in-Hand Needs
How much immediate cash do you require to meet your financial obligations?
6. Why Do I Need to Pay You a Fee?
Applying directly to a bank for credit card consolidation often leads to rejection due to an unfavourable credit profile. Bluebricks bridges this gap by leveraging our network of funders, strong bank connections, and extensive expertise.
We ensure your loan application is submitted with the best possible chance of approval, helping you secure the financial support you need.
How Long Does It Take for a Personal Loan for Credit Card Consolidation to Be Approved?
The fastest approval time for a personal loan for credit card consolidation is 30 days, while the longest can take up to 45 days. This depends on how quickly your current bank can update your record.
It also depends on how much loan amount you need—the larger the loan amount, the longer it takes.
Read More: How to Get Personal Loan for High Credit Card Debt
Process for Securing a Personal Loan for Credit Card Consolidation
The process for securing a personal loan to consolidate credit card debts involves the following steps:
- Collect credit reports and full income document
- Get bank proposal and calculation breakdown in 3–5 days
- Sign the agreement and perform the settlement
- CTOS update and loan submission
- Bank approval and client repay us the fund and service fee
- Monthly direct payment to the bank
Credit Card Debt Consolidation Through Bluebricks
Bluebricks is a trusted bank loan and debt consolidation agency in Malaysia dedicated to helping individuals regain financial stability and access personal loans. Our solutions are made to meet your financial situation and goals, ensuring you receive the support needed to move forward.
We specialise in a variety of services to address diverse financial needs:
- Personal loan services
- SME loan services
- Mortgage loan services (to purchase a new home, refinancing and cashback purposes)
- Collateral loan services
Bluebricks Service Features & Benefits
Here are the features and benefits of Bluebricks’ bank loan services, such as applying for a credit card consolidation loan:
1. No Upfront Payment
Unlike scammers who demand advance payments, we never ask for money upfront. We want you to be assured that we are genuinely here to help.
2. No Interest Charged for Settlement Fund
We help clear your bad debts to boost your credit score, then secure a consolidation loan to cover these debts and our fees.
We do not charge monthly or service interest. Throughout the entire process, we are there to support you through any delays (*not caused by you).
3. Only One Fee
We have just one straightforward fee—no hidden charges or surprise costs. Unlike complex billing systems, we maintain complete transparency about what you’re paying for.
4. Proper Agreement Signed Before Execution
Before submitting any documents to the bank, we ensure a formal agreement is signed with you, keeping you in control. We only receive payment after your loan is approved, guaranteeing we will not submit anything without your explicit consent.
5. Obtain Your Proposal Within 3–5 Days
We efficiently prepare a comprehensive proposal for you in just 3–5 days. This proposal will outline the best loan options suited to your specific situation. It’s worth the short wait to get a well-crafted plan that can significantly improve your financial outlook.
6. Comprehensive Proposal
We know that one size does not fit all. Unlike agencies that push a single, often high-interest loan, we provide you with at least two tailored options. This approach allows us to find the best fit for your unique financial situation and goals.
7. You Pay Us Afterward
Our fee is only due after your loan is successfully secured and disbursed. This payment structure ensures your peace of mind throughout the process, as you only compensate us once you have seen tangible results.
8. Provision of Emergency Funds* (case-to-case basis)
At Bluebricks, we understand that immediate financial obligations—such as external debts or medical expenses—often cannot wait for the standard bank loan approval process, which can take at least 30 days.
To bridge this gap, we offer an emergency fund from our own resources to promptly address these urgent needs. After confirming your eligibility for a bank personal loan and settling your bad credit or credit card debts, we can provide this emergency fund to alleviate your burdens without immediate financial strain.
The amount advanced is subsequently recovered from the new personal loan you obtain, ensuring a seamless transition to financial stability.
What is a Personal Loan for Credit Card Consolidation?
A personal loan for credit card consolidation is a financial solution where you take out a single personal loan to pay off all your existing credit card debts.
This method helps streamline repayments and can reduce overall interest rates, making it especially effective for individuals dealing with credit card consolidation.
Here is a high-credit debt sample:
How Do You Check If You Have High Credit Card Debts?
You might be considered to have high credit card debt if the following circumstances apply:
- Review your CTOS report to check if your credit card usage exceeds 70% of your credit limit. If yes, you are classified as having high credit card debts.
- If you have been unable to fully pay off your credit card balance for six consecutive months, you are considered to have significant credit card debt.
- After paying just the minimum amount required (5%), if you have little money left for living expenses and must rely on your credit card for daily needs, you are in a high-debt scenario.
Can I Still Borrow a Bank Loan if I Have High Credit Card Debts?
- If your Debt Service Ratio (DSR) exceeds 70%, it’s very likely that banks will reject your application for a personal loan to settle your credit card debts.
- In such cases, Bluebricks can help by first resolving your credit card debts. Once your debts are settled, we can help you apply for a new personal loan to consolidate and manage your finances effectively.
What Options Do Customers with High Credit Card Debts Have for Borrowing a Bank Loan?
There are several options available for individuals with high credit card debts, including credit card consolidation:
1. Balance Transfer
Transfer your outstanding debt from one credit card to another with a higher credit limit.
- For example, if Credit Card A has an outstanding balance of RM5,000 and Credit Card B has a limit of RM10,000, but only RM1,000 is used, you can transfer RM5,000 from Card A to Card B.
- Some banks offer 0% interest for 3–6 months during a balance transfer period.
- Important Notes:
- The new credit card must have a sufficient credit limit.
- After the 0% interest period, unpaid balances may incur an interest rate of 1.5% per month.
- CCRIS/CTOS records must not show any bad credit.
2. Restructure Credit Card Debt into a Term Loan
Negotiate with your bank to convert your outstanding credit card debt to a term loan with a fixed repayment schedule and a lower interest rate.
Remarks: Your CTOS report will show a “C” to indicate the restructure. This record may disqualify you from applying for new loans, such as credit cards, car loans, or housing loans, until it is resolved.
3. Enrol in the AKPK Programme
- Agensi Kaunseling dan Pengurusan Kredit (AKPK) is a government agency that helps negotiate with banks on your behalf.
- You make a single payment to AKPK, which distributes it among your creditors.
Remarks: Your CTOS report will display a “K” to indicate participation in the programme. This record will prevent you from applying for new loans, such as credit cards or housing loans, while enrolled in AKPK.
4. Bluebricks Loan Agency Services
Bluebricks specialises in helping individuals with high credit card debts. We assist you in resolving outstanding credit card debts and applying for a personal loan to consolidate your finances.
Bluebricks’ Advice for People with High Credit Card Debts Seeking Personal Loans
When exploring personal loans for credit card consolidation, it’s essential to evaluate your financial situation carefully. Here’s what Bluebricks advises:
1. Consider the Purpose of Your Loan:
- Do you need money for a short-term purpose? (Keep in mind that Bluebricks’ process takes at least 30 days due to factors related to high credit card debts.)
- Are you looking to reduce your monthly financial burden?
- Do you want to increase your monthly cash flow for more flexibility?
- Are you trying to avoid the stress caused by frequent calls from banks chasing payments?
- If none of these apply, you may want to consider gradually clearing your high credit card debts or enrolling in AKPK for long-term debt management.
2. Is There an Emergency?
If your financial needs are not urgent, you can focus on clearing your credit card debts slowly before applying for a personal loan.
3. Review Your Budgeting
Take a closer look at your spending habits and identify areas where financial problems are arising. Adjust your budget to prevent further debt accumulation.
4. Understand the Limitations of Loan Agencies
Loan agencies, including Bluebricks, offer temporary solutions. For long-term financial stability, focus on reducing your expenditure and increasing your income for faster repayment.
How Much Personal Loan Can I Borrow with High Credit Card Debts?
Generally, the maximum personal loan amount you can borrow is up to RM400,000 for one bank. The amount you can borrow for credit card consolidation depends on several key factors:
- Your Income Level: Higher and more stable income increases loan eligibility.
- Your Employer: Working for reputable organisations such as multinational corporations (MNCs), private sector firms, or government-linked companies (GLCs) may improve your chances.
- If you wish to know your borrowing capacity, you can provide your income documentation and CTOS report. Bluebricks will evaluate your situation and deliver a detailed loan proposal within 3–5 days.
Sample Proposal
Effective Strategies for Credit Card Consolidation FAQ
Credit card consolidation through a personal loan may be helpful in the following situations:
– If you cannot fully pay off your credit card debts for 6 consecutive months and are only making minimum payments, you should consider credit card debt consolidation.
– If after paying the minimum amount (5%) on your credit card bill, you have insufficient money for living expenses and must rely on your credit card for daily spending, it’s time to consider credit card consolidation.
Most banks in Malaysia provide personal loans for credit card consolidation, including:
– RHB Personal Loan
– Maybank Personal Loan
– Alliance Bank Personal Loan
– Standard Chartered Personal Loan Malaysia
When applying for a personal loan for credit card consolidation, keep the following considerations in mind:
Credit Card Usage: Your credit card utilisation should not exceed 50%, as higher usage may result in higher interest rates for personal loans.
Application Approval: Avoid exceeding 70% of your credit card limit. Usage beyond this threshold increases the risk of rejection.
Debt Service Ratio (DSR): Ensure your DSR is below 70%; exceeding this limit may lead to loan application rejection.
Bad Credit or Records: Applicants with bad credit or poor financial records are likely to face difficulties securing approval.
Loan applications for credit card consolidation may be rejected in the following circumstances:
High DSR: If your Debt Service Ratio exceeds 70%, your loan application is likely to be declined.
Bad Credit History: Poor financial records, including bad credit, significantly lower your chances of approval.
Income Issues:
– If your income is received entirely in cash, it may not meet eligibility requirements.
– If you are not a confirmed staff member in your employment, your application could be rejected.
To arrange and pay off credit card debts more efficiently, consider these strategies:
– Carry over your credit card debt to a different card with a promotional 0% interest rate for 3–6 months.
– Always pay your credit card bills on time to avoid late payment charges.
– Stop using your credit card for non-essential purchases and focus on reducing the number of active cards.
– Create and stick to a budget that prioritises essential expenses and avoids overspending.
– Look for opportunities to boost your income, such as part-time work or freelancing, to accelerate debt repayment.
Acknowledging the root causes of credit card debt can help prevent future financial challenges:
– Paying only the minimum amount each month increases the overall debt due to accumulating interest.
– Spending more than you earn is a common reason for high credit card debt, requiring immediate adjustments to your financial habits.
Preventing credit card debt requires proactive financial management. Here are some effective strategies:
Clear Outstanding Balances: Pay off your credit card balance in full every month to avoid gathering interest.
Stop Using the Card for New Expenses: If you already have outstanding balances that you can’t clear, refrain from using your credit card for additional purchases.
Pay Before the Due Date: Make payments before the due date (not the statement date) to steer clear of late payment fees and additional interest charges.
Credit cards often come with various fees, which can contribute to financial strain if not managed carefully. These include:
– Annual fees
– Late payment fees
– Over-limit fees
– Interest or finance charges
– Card replacement fees
– Returned payment fees
– Balance transfer fees
– Cash advance fees
– Foreign transaction fees
Yes, you can cancel your credit card even if there are outstanding balances. To do this:
– Contact your bank to initiate the cancellation process.
– Continue paying the remaining balance directly to the bank.
For more details on managing credit card cancellations, visit the Malaysia Government Portal.
Understanding how credit card interest is calculated can help you manage payments effectively. Interest is applied if the outstanding balance is not cleared by the due date. Here’s an example:
Due Date: 1st of every month
Outstanding Balance: RM10,000
Payment Made: RM1,000 on the 30th of the month
Calculation:
Remaining balance after payment = RM9,000.
Interest rate = 1.5% per month.
Interest = RM9,000 × 1.5% = RM142.50.
New balance = RM9,000 + RM142.50 = RM9,142.50.
This calculation assumes no new transactions during the billing cycle. Repeating this pattern without full repayment increases your financial burden.
Yes, credit card debt can accumulate as “interest on interest” if the outstanding balance is not cleared in full every month. Here’s how it works:
Example Calculation
Due Date: 1st of every month
Outstanding Balance: RM10,000
Payment Made: RM1,000 on the 30th of the month
First Month
Remaining balance after payment = RM9,000
Interest rate = 1.5% per month
Interest = RM9,000 × 1.5% = RM142.50
New balance = RM9,000 + RM142.50 = RM9,142.50
Second Month
Payment made = RM1,000
Remaining balance = RM9,142.50 – RM1,000 = RM8,142.50
Interest = RM8,142.50 × 1.5% = RM122.14
New balance = RM8,142.50 + RM122.14 = RM8,264.64
This example shows that interest (Example: RM142.50 in the first month) is added to the outstanding balance and then subjected to further interest charges, creating a compounding effect. Paying your credit card balance in full each month is the best way to avoid this.
Personal loan credit card refinance is a process where your high-interest credit card debt is converted into a lower-interest personal loan. This method helps reduce your monthly payments and total interest charges over time.
A personal loan credit card transfer allows you to consolidate your credit card balances by transferring them into a new personal loan. This approach often offers better terms, such as lower interest rates and fixed repayment schedules.
Bluebricks offers tailored solutions to help manage your credit card debts:
– We provide direct loans (with no interest or instalments) to help you settle your credit card balances.
– Afterwards, we will assist you in obtaining a bank loan to repay the borrowed amount.
– This process converts your high-interest credit card debt into a personal loan, allowing you to benefit from lower interest rates and more manageable monthly instalments.
Managing your credit card debt balance effectively is crucial to reducing financial stress and avoiding unnecessary interest charges. A loan for credit card debt can help consolidate your balances into a more manageable structure with lower interest rates and fixed payments.
Yes, credit card debts can lead to legal action if you fail to pay your instalments for more than three consecutive months. In such cases, the bank may issue a legal letter, and your CTOS report will include a remark labelled “11,” indicating legal action.
After receiving a remark labelled “11” in your CTOS report, the record will remain for 2 years even after you have fully settled the debt. Only after this 2-year period will the remark be removed from your credit report.
Yes, you can use your credit card to pay a personal loan by withdrawing cash from your credit card. However, keep in mind that cash advances often carry high fees and interest rates, which could increase your financial burden.
Yes, a personal loan is generally a good option for settling credit card debt because:
– Personal loans often have lower interest rates compared to credit cards.
– Monthly instalments for personal loans are usually lower than the minimum payment required by credit cards (5%).
This makes personal loans a practical tool for credit card consolidation.
A credit card functions as a revolving credit line, so you can borrow as needed within an approved limit and only incur interest when you carry a balance after the due date.
In contrast, a personal loan provides a lump sum upfront, which you repay over a fixed term through consistent monthly instalments.
The decision between the two depends on your specific financial needs and repayment capacity, as each offers distinct advantages depending on your situation.
If you’re looking for an instant personal loan to consolidate credit card debt, GXBank’s FlexiCredit offers a convenient solution. This programme provides fast approval and flexible repayment terms, making it suitable for individuals with urgent financial needs.
Moreover, your CTOS report and DSR will also impact your eligibility for the programme. So, if you have a high DSR or bad record in your CTOS report, your loan application is unlikely to be approved.
Applying for a personal loan to manage credit card debt is a simple process with Standard Chartered’s CashOne. This loan option features fixed monthly repayments and competitive interest rates, ensuring manageable repayment terms tailored to your financial situation.
Please note that your loan approval depends on Standard Chartered’s evaluation of your CTOS report (credit history) and DSR (Debt Service Ratio). If you have a high DSR or negative records in your CTOS report, your loan application may not be approved.
No, a credit card is not the same as a personal loan. A credit card acts as a credit limit approved by the bank, allowing you to use funds as needed within the set limit. A personal loan, on the other hand, provides a fixed sum that must be repaid over a specific term.
Use a personal loan calculator to estimate your repayment amounts and terms. For a detailed formula and calculation guide, visit this useful Personal Loan Calculator Page.
Picking between a credit card and a personal loan depends on your financial priorities. Personal loans offer fixed repayment schedules and lower interest rates, while credit cards provide a revolving credit line with higher flexibility but higher interest.
If you’re unsure whether a personal loan or credit card is better for your financial needs, use the Credit Card vs Personal Loan Calculator. This tool allows you to compare repayment terms, interest rates, and costs to make an informed decision.
