Looking for debt consolidation options in Malaysia? Securing debt consolidation with bad credit may seem challenging, but there are solutions available that can help you regain control of your finances and simplify your monthly payments.
When you have bad credit issues, Malaysian banks may reject your loan application even if you have a high income. However, there are specialised solutions designed to help individuals in your situation.
Before applying for debt consolidation, here’s what you need to know:
- Loan Amount: Calculate the total loan you need by adding up your current credit card debts, personal loans, other liabilities, and any immediate financial requirements.
- Interest Rates: Rates can range from 3% to 18% annually, depending on the bank.
- Loan Tenure: Repayment periods may go up to 10 years, based on eligibility.
Factors That Influence Loan Interest Rates and Tenure
Banks evaluate various factors when determining your interest rates and loan tenure:
- Your employment status and workplace
- Marital status (single or married)
- Educational background
- Residential location (urban areas tend to cost more than suburbs)
- Employment type (full-time or contract basis)
- Basic salary (earning above RM5,000 generally improves chances)
- Industry risk factors (some sectors, e.g. tourism and airlines, may be considered high risk since the pandemic)
Bluebricks Debt Consolidation Solutions for Individuals with Bad Credit
Bluebricks offers a unique approach to debt consolidation: we settle your bad credit upfront without interest, collateral, or a guarantor.
Once the bank approves your personal loan, the loan is used to repay the principal amount and our one-time service fee—no upfront payment is required.
How Does This Method Support Bad Credit Clients that Need Debt Consolidation?
If your credit history is unfavourable, we first resolve all negative records before submitting your loan application to the bank.
This process ensures:
- Your credit history appears clean, with no negative records.
- Your credit cards have minimal or zero outstanding balances.
- Your Debt Service Ratio (DSR) is low, indicating strong repayment ability.
By improving these factors, we significantly increase the likelihood of loan approval.
Without this step, the chances of rejection would remain very high.
Even if your loan was approved with a low credit score, the terms might still be unfavourable. Banks view high-risk borrowers as a greater liability and often compensate by charging higher interest rates, leading to costlier repayment terms for you.
Pros and Cons of Debt Consolidation for Bad Credit with Bluebricks
Before proceeding with debt consolidation with bad credit through Bluebricks, it is important to understand both sides of the equation.
Pros:
- You receive some cash in hand
- Monthly payments become more manageable
- Your monthly cash flow improves
- You get breathing room to stabilise your finances
- Less pressure from banks calling for payments
- All debts are consolidated into one or two loans that are easier to manage
- Previous negative credit records are cleared
- Your credit report improves, making future car or home purchases possible
- No concerns about employers discovering bad credit reports (especially big companies that regularly check employee credit reports)
Cons:
- Need to pay a consultation fee
- Approval process is not immediate; it takes at least 30-90 days
- Increases total liability
Read More: Securing Bad Credit Loans: An In-Depth Guide
Important Considerations for Bad Credit Debt Consolidation with Bluebricks
- Issues in your CTOS report:
- What problems need to be settled?
- How much money is needed to settle?
- After settling Bad Credit, how many banks can we work with?
- After settling Bad Credit, how much of a loan can be borrowed?
- Your income situation:
- Is your income stable?
- How much is your income?
- What industry do you work in?
- Is your debt service ratio (DSR) over 50%?
- Does the bank consider your risk high or low?
- How much cash-in-hand do you need?
Bluebricks Service Fees and Charges for Debt Consolidation Loan with Bad Credit
You might wonder why Bluebricks charge service fees for debt consolidation loans. Here’s what you need to know:
- While banks may initially decline your loan application, Bluebricks can help you secure bank loans
- We need to pay off your existing commitments upfront (without charging interest)
- No guarantor or co-signer is required
- No collateral is needed
- We help you receive your desired cash amount in hand
Read More: Personal Loan with Co-signer or Guarantor: Do You Need One for Bad Credit?
How Long Does It Take for a Bad Credit Personal Loan to Be Approved?
The fastest it can take is 30 days, while the longest can be 90 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).
What is the Process of Debt Consolidation with Bad Credit
- Collect credit reports & full income document
- Get bank proposal & calculation breakdown in 3-5 days
- Sign agreement and perform settlement
- CTOS update & loan submission
- Bank approval and client repay us the fund and service fee
- Monthly direct payment to bank
What is Bad Credit?
Bad credit can manifest in several ways:
1. Low & Poor Credit Score (300-650)
Credit scores don’t suddenly drop; there are specific reasons for the score to decrease. Generally, late loan repayments, having SAA, entering AKPK, or repeatedly applying for bank loans will continuously deduct points.
2. Late Payment
If you haven’t paid the amount specified by the bank after the due date, it is considered a late payment. Banks usually give a 14-day grace period. After that, it will be recorded in your credit record. The record is kept for 12 months. Late payment for more than one month (if you’re in arrears for more than 2 months, you basically can’t borrow any bank loans) significantly impacts your credit.
3. Special Attention Account (SAA)
If your credit card outstanding balance and personal loan instalments are in arrears for at least 2 months, the bank will pay special attention to your account and update the national bank about your repayment behaviour. This loan account will then enter SAA status.
4. Agensi Kaunseling dan Pengurusan Kredit (AKPK)
A “K” remark will appear in the Credit report, indicating that you have entered the AKPK programme.
This means that when you applied for this programme, your financial situation was in dire straits, and you needed this agency to help negotiate and lower your monthly bank payments.
5. Trade Reference
This occurs when you signed a contract during consumption but failed to fulfil it, causing the other party to notify CTOS. This serves as a reference for new service providers or banks. Examples include:
- Koperasi Trade reference
- Money Lender Trade reference
- Telecommunication & Buy Goods Trade reference
Sample Indications of Bad Credit
1. Low & Poor CTOS score: (300-650)
2. Late Payment
3. SAA (Special Attention Account)
4. AKPK Record
5. Trade reference
a) Koperasi Trade Reference Sample
b) Money Lender Trade Reference
c) Telecommunication & Buy Goods Trade reference
How Do You Check If You Have High Credit Card Debts?
You can purchase a report from Touch n’ Go and send the CTOS report to us. Our specialists will help you check for free whether you have bad credit. Alternatively, you can check yourself based on the samples we provide.
Another way is to provide a copy of your IC to Bluebricks, and we will help you check the latest CTOS report for free. Our specialist will then assist you in determining whether you have bad credit.
When reviewing your credit report (CTOS report), one key indicator of potential bad credit is if your credit utilisation reaches 70% of your credit limit.
It’s important to note that many banks will also examine your average credit card utilisation over the past 6 months when assessing your creditworthiness.
Can I Still Borrow a Bank Loan if I Have High Credit Card Debts?
You can still borrow a Bank Personal Loan if you meet these conditions:
- We currently only serve salaried employees with a monthly income of RM4,000 or more, who have EPF deductions, have been working for more than 6 months, and are confirmed staff
- Not for clients with legal cases/summons cases
What Options Do Customers with High Credit Card Debts Have for Borrowing a Bank Loan?
1. Slow Method:
You don’t need a loan agency and hence, you save on consultation fees
- If you have a Low & Poor CTOS score (300-650): Keep paying the bank on time for 6-12 months, clear SAA, and trade references. When the score reaches 650, you could start applying for a personal loan.
- If you have late payment issues:
Maintain on-time payments for 6-12 months. When late payment credit records disappear in CTOS, you could start applying for a personal loan. - If you have SAA (Special Attention Account): Negotiate repayment terms with the bank. After clearing it, you could apply for a personal loan.
- If you have Trade references:
- Koperasi Trade: Negotiate repayment terms with Koperasi. You could apply for a personal loan once it is cleared.
- Money Lender: Negotiate repayment terms with Money Lender. You could apply for a personal loan once it is cleared.
- Telecommunication & Buy Goods Trade reference: Negotiate repayment terms with Telco or the commerce company. You could apply for a personal loan once it is cleared.
2. Fast Method
Find a loan agency to solve the bad credit record, then apply for a personal loan.
3. Borrow from a Money Lender
Money lenders are more lenient with bad credit. Note that the loan amount is small, but the interest rate is high (up to 18% per year).
Be cautious of rates exceeding 18% – even if the lender claims to have a money lending license (KPKT license), such high rates may indicate illegal loan shark activities.
Bluebricks’ Advice for People with Bad Credit Seeking Debt Consolidation
- Determine the Purpose of Your Loan:
- Need funds within a short time period (Bluebricks requires at least 30 days due to bad credit factors).
- Reduce your monthly financial burden.
- Increase monthly cash flow.
- Clear bad credit quickly to apply for a credit card, purchase a car or house, or meet job requirements.
- Alleviate mental stress caused by banks chasing payments.
- If none of the above applies, consider gradually clearing your bad credit or opting for AKPK assistance.
- Assess the Urgency:
- If the situation is not urgent, consider clearing your debts slowly before applying for a personal loan.
- Review Your Budget:
- Identify problem areas in your financial management and adjust accordingly.
- Manage Expectations:
- Understand that loan agencies provide temporary solutions to financial challenges, and long-term planning is essential for financial stability.
How Much Can I Borrow with Bad Credit?
Your potential loan amount is determined based on your credit report, financial profile, personal and employment background, and Debt Service Ratio (DSR).
We can assist you in calculating how much you may qualify for. Simply provide the required documents, and we’ll help you determine your potential loan amount within 3-5 days.
Bluebricks Sample Proposal
Debt Consolidation with Bad Credit – FAQ
Our evaluation process is entirely credit score-friendly. Here’s how we ensure it:
• We use a specialised system to calculate your Debt Service Ratio (DSR) and assess your current loan interest rates.
• By leveraging our industry connections, we analyse your profile to determine how much you can potentially borrow.
• Importantly, we don’t require you to sign any bank application forms, guaranteeing that this process will not impact your credit score.
Use this formula:
Monthly instalment = [(Loan amount x interest per annum x loan tenure) + loan amount] / [loan tenure x 12 months]
Example: Loan amount = RM100,000, Interest per annum = 10%, Loan tenure = 10 years
Monthly instalment = (100,000 x 10% x 10 years) + 100,000 / [10 years x 12 months]
Monthly instalment = (10,000 x 10 years) + 100,000 / 120 months
Monthly instalment = [100,000 + 100,000] / 120 months
Monthly instalment = 200,000 / 120 months
Monthly instalment = RM1,666.67
• CTOS report: front and back IC copy
• 6 months’ latest payslips
• Latest bank statement for 6 months
• Latest EPF Details statements for the past 2 years
• 2 years income tax (EA), if you have
You don’t need to trust us immediately—we recommend reviewing our proposal and breakdown calculation before making any decision. Booking a consultation and receiving our proposal is completely free of charge.
Here’s why we stand out:
o Transparent Process: We encourage you to review our detailed proposal and breakdown calculation to ensure everything is clear before proceeding.
o Proven Track Record: You can review successful examples to understand what happens when you choose to work with us.
o No Upfront Fees: None of our agents will charge you any fees upfront. If your loan isn’t approved, we bear the greater risk as we settle your bad credit facilities first.
We operate comprehensively and prudently, meaning we only take on cases we believe have a strong chance of success. Rest assured, our goal is to provide reliable and effective solutions for your financial needs.
No, they can’t.
To protect yourself from predatory lenders and scams when seeking a bad credit loan, be alert for these red flags:
• Pressure to make an immediate decision and upfront payment
• Lack of a secure website (URL should start with “https”)
• Guaranteed approval without checking your credit history
• No physical address is listed for the company
• Unsolicited loan offers through various channels
• Requests for upfront fees before loan approval
• Difficulty finding clear contact information
Remember, legitimate lenders will always review your financial history, provide clear terms and give you time to consider their offer. They should also have proper licensing, secure websites, and transparent contact details.
Always conduct thorough research and trust your instincts when evaluating loan offers. If something seems too good to be true, it probably is
The key is to know how to calculate personal loan instalments yourself. Using the formula provided earlier, you can determine your interest rate.
Use this formula:
Monthly instalment = [(Loan amount x interest per annum x loan tenure) + loan amount] / [loan tenure x 12 months]
Example: Loan amount = RM100,000, Interest per annum = 10%, Loan tenure = 10 years
Monthly instalment = (100,000 x 10% x 10 years) + 100,000 / [10 years x 12 months]
Monthly instalment = (10,000 x 10 years) + 100,000 / 120 months
Monthly instalment = [100,000 + 100,000] / 120 months
Monthly instalment = 200,000 / 120 months
Monthly instalment = RM1,666.67
If you calculate your instalments and find that the interest rate is higher than 18% per year, then you are dealing with a loan shark.
You may refer to our case studies for our successful cases:
• Clearing Credit Card Debt and Securing a New Personal Loan for Business Survival
• Clearing Debts and Getting a New Bank Loan
You may also refer to the testimonials below.
