Debt Consolidation Loan Agency in Malaysia

Key Takeaways

• Debt consolidation simplifies multiple repayments into one manageable loan. Individuals can benefit from lower interest rates and reduced financial burdens.
• A debt consolidation agency like Bluebricks offers tailored debt consolidation options for individuals with poor credit histories.
• Debt consolidation via a bank can only be done through personal loans or property refinancing.
• Addressing credit issues is crucial for approval. Factors like credit scores, outstanding debts, and Debt Service Ratios (DSR) significantly impact approval success.

A debt consolidation loan agency helps individuals consolidate multiple debts into a single loan or repayment plan. This approach is designed to simplify financial management and alleviate the stress associated with juggling various creditors and payment schedules.

These agencies primarily assist individuals with outstanding debts from sources such as credit cards and personal loans. By offering structured repayment solutions, a debt consolidation loan agency provides a clear pathway toward financial stability.

As a reputable debt consolidation agency, Bluebricks specialises in providing solutions specifically tailored for individuals with bad credit, helping them regain control of their finances despite past credit challenges.

What Does Debt Consolidation Mean?

Debt consolidation is a strategic financial approach where multiple debts are merged into one loan or repayment plan. This method eliminates the need to manage numerous accounts with varying interest rates, repayment deadlines, and creditors.

Instead, debt consolidation streamlines your financial obligations into a single monthly payment. This strategy is particularly beneficial for those overwhelmed by high-interest debts, as it offers a straightforward means to regain control over their financial situation.

Benefits of a Debt Consolidation Loan

Opting for a debt consolidation loan can bring numerous advantages, significantly enhancing your financial health:

• Consolidation loans often offer reduced interest rates, potentially from 18% to as low as 3% annually, depending on your salary profile.
• With structured repayment plans, you can clear your debts several years earlier than expected.
• Frees up disposable income, reducing financial strain and enhancing your quality of life.
• Replace multiple payments with one consolidated payment, making budgeting easier.
• Provides breathing space to address immediate financial challenges.
• Clear past bad credit records and improve your credit score, increasing your financial credibility.
• Boost your chances of qualifying for loans for major purchases, such as cars or homes.
• Avoid concerns about employers accessing poor credit records, particularly in companies that regularly conduct employee credit checks.

Methods of Debt Consolidation

Debt consolidation can be achieved through various methods, tailored to suit your financial circumstances and the type of debts you hold. Below are two of the most common approaches employed in Malaysia:

1. Personal Loan

A personal loan is one of the simplest and most accessible ways to consolidate debts. By securing a single personal loan, you can pay off multiple high-interest debts, such as credit cards or other unsecured loans.

Why Choose Personal Loans for Debt Consolidation?

• Lower Interest Rates: Personal loans typically offer lower interest rates compared to credit cards and other high-interest debts, helping to reduce the overall repayment amount.
• Fixed Monthly Payments: With fixed repayments each month, you gain predictability and ease in managing your budget.
• Longer Loan Tenure: Loan tenures often range from 5 to 10 years (depending on the client’s salary profile), spreading out the repayment burden and lowering monthly instalments.

2. Refinancing of Property

Property refinancing involves securing a new mortgage or a home equity loan to pay off your existing debts. This approach utilises the equity in your property to secure a lower-interest loan.

Why Choose Property Refinancing for Debt Consolidation?

• Lower Interest Rates: Mortgage loans generally feature significantly lower interest rates compared to unsecured borrowing options.
• Higher Loan Amounts: The equity in your property can allow you to consolidate larger amounts of debt.
• Extended Loan Tenure: Repayment periods can extend up to 10 years, reducing monthly payments and easing financial strain.

Best For: Individuals who own property and face high debt levels or significant monthly commitments.

Read More: How to Apply for Personal Loan for Bad Credit in Malaysia

How Debt Consolidation Works in Malaysia

1. Combining Multiple Debts

Debt consolidation simplifies financial management by combining several debts into a single loan.

Example: If you’re juggling multiple credit card balances and personal loans, a debt consolidation agency can help combine them into one loan, making repayments easier.

2. Lower Interest Rates

One of the primary benefits of debt consolidation is the potential for reduced interest rates. Consolidation loans generally come with lower rates than credit cards or high-interest personal loans, reducing monthly repayment amounts.

3. Longer Loan Tenure

Debt consolidation often involves extending the loan tenure, allowing repayments to be spread out over a more extended period.

While this may result in paying more in total interest over time, it provides the advantage of significantly lower monthly payments, making the financial burden more manageable.

Example: If you currently pay RM2,000 monthly across three debts, consolidation might reduce this amount to RM1,200 by extending the repayment period.

4. Single Monthly Payment

Debt consolidation eliminates the need for multiple payments to various lenders. Instead, you make one simplified payment to the consolidation agency or lender, helping you maintain better control over your finances.

Services Offered by a Debt Consolidation Loan Agency

A debt consolidation loan agency offers a range of specialised services designed to assist individuals in managing their debts and achieving financial stability. Below is an expanded overview of its key offerings:

1. Debt Assessment

Debt consolidation begins with a thorough analysis of your financial situation:

• Comprehensive Evaluation: Agencies assess all your outstanding debts, including credit card balances, personal loans, and other liabilities.
• Prioritisation of Debts: The focus is on identifying debts with the highest interest rates or those requiring urgent repayment.
• Tailored Strategy: A detailed assessment ensures the proposed consolidation plan aligns with your financial capacity and long-term goals.

2. Clearing Bad Credit or Reducing Credit Card Balances

Debt consolidation agencies often assist clients with poor credit by addressing outstanding debts that negatively impact their credit scores.

• Clearing Bad Credit: If you have overdue payments, the agency can help settle these debts to improve your creditworthiness.
• Reducing Credit Card Balances: They assist in paying off high-interest credit card balances, helping to ease your financial burden and enhance your eligibility for debt consolidation loans.
• Improving Loan Prospects: By improving your credit score, this process also positions you as a stronger candidate for better loan terms in the future.

3. Consolidation Loan Facilitation

Working with experienced bankers and financial institutions, agencies help secure suitable loans for debt consolidation:

• Loan Applications: Assistance is provided to apply for personal loans or multiple bank loans tailored to your needs.
• Debt Combination: These loans are structured to combine and repay all your existing debts, simplifying your financial obligations.
• Manageable Repayment Terms: The consolidation ensures that repayment schedules are realistic and compatible with your financial capacity.

4. Achieving Optimal Loan Terms

Debt consolidation agencies use their expertise and networks to secure favourable loan terms:

• Lower Interest Rates: Agencies aim to identify loans with significantly reduced interest rates to lower your repayment burden.
• Extended Repayment Periods: Longer loan tenures help reduce monthly instalments, making repayments more manageable.
• Higher Loan Amounts: A strategic application process maximises the chances of approval for larger loan amounts, accommodating diverse financial needs.
• Minimised Financial Strain: The result is a well-rounded consolidation plan that delivers both immediate and long-term benefits.

5. Cash in Hand After Debt Consolidation

Debt consolidation can often provide borrowers with additional financial flexibility:

• Surplus Loan Amounts: After consolidating debts, borrowers may receive a loan amount exceeding their total liabilities.
• Financial Cushion: This surplus can be used to cover unexpected expenses or avoid reliance on high-interest credit options like credit cards.
• Improved Liquidity: Such arrangements stabilise your finances while preserving liquidity for future needs.

Read More: Can I Pay Off a Personal Loan Early in Malaysia

Debt Consolidation Loan for Bad Credit

If you’re struggling with bad credit and seeking a debt consolidation loan, the process can be notably challenging. Most banks in Malaysia require that all bad credit debts be settled before they will consider your application. This is where Bluebricks can step in to assist.

1. Banks Can’t Consolidate Without Clearing Bad Credit Debts

Banks typically insist that all outstanding bad credit debts be resolved before approving a debt consolidation loan. This policy is in place to ensure you are perceived as a lower-risk borrower, thereby increasing the likelihood of loan repayment.

2. How Bluebricks Can Help You Settle Bad Credit

Bluebricks specialises in assisting individuals with bad credit to overcome financial barriers:

• Thorough Debt Assessment: We begin by conducting a detailed evaluation of your financial circumstances.
• Debt Settlement: After reviewing your debts, we take the necessary steps to settle your bad credit upfront, enabling you to qualify for a personal loan for debt consolidation.
• Improved Approval Chances: This process significantly enhances your chances of loan approval when applying for a consolidation loan.

3. No Upfront Payment

We do not require any upfront payments. Unlike scammers who make false promises in exchange for deposits, we prioritise your security.

4. No Interest Charged for Settlement Fund

First, we pay off your bad debts to help fix your credit score. Then, we arrange a personal loan for CTOS blacklist cases to cover both your settled debts and our fee, with the possibility of leaving you with extra cash for your needs.

We do not charge interest on this settlement fund, and we remain with you throughout the process, even in the event of delays, ensuring no extra costs are incurred.

5. Comprehensive Proposal

We don’t believe in one-size-fits-all approaches. Instead, we offer at least two proposals tailored to your unique financial situation. This ensures you receive the best plan for your specific needs without being forced into a high-interest loan.

6. No Loan Submissions Without Your Consent

Transparency is at the core of our process. We guarantee that no loan applications are submitted on your behalf without your explicit consent.

7. No Impact on Your Credit Score

All debt assessments and proposals are conducted internally, ensuring your credit score remains unaffected while we explore the best options for your situation.

8. Expert Guidance and Support, Even After Rejections

With our expertise and bank partnerships, we specialise in supporting clients who have been previously rejected by banks. We work to overcome barriers and find a loan solution tailored to your specific financial profile, even when others have said no.

9. Obtain Your Proposal Within 3–5 Days

We efficiently prepare a comprehensive proposal within 3–5 days. During this time, we thoroughly evaluate more than 8 banks to find the optimal solution for your situation.

Our analysis compares interest rates, loan amounts, and repayment tenures across multiple banks to identify which offers will best reduce your monthly instalments and meet your financial needs.

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.

10. 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.

Why Should You Trust Bluebricks – One of the Best Debt Consolidation Loan Agencies?

We don’t expect you to trust us right away.

Take the time to review our Bluebricks Proposal and detailed calculation breakdown. Evaluate the numbers for yourself and make an informed decision. For added confidence, explore our portfolio of successful case studies as references.

• Clearing Credit Card Debt and Securing a New Personal Loan for Business Survival 
• Clearing Debts and Getting a New Bank Loan

At Bluebricks, we take on more risk than you do. We cover the settlement upfront, even before the consolidation loan is approved. If your loan application doesn’t go through, we bear the greater loss. This is why we carefully evaluate every case before committing to it.

Types of Debt Consolidation Programmes in Malaysia

1. Bank-Supported Debt Consolidation

Major banks, such as CIMB, Maybank, and Bank Rakyat, provide debt consolidation loans for eligible individuals. These loans are ideal for those with stable incomes and good credit histories, offering lower interest rates and simplified repayment plans.

2. Debt Consolidation for Bad Credit

Debt consolidation tailored for individuals with poor credit scores combines the benefits of both bank and non-bank solutions. At Bluebricks, we specialise in offering such services to clients struggling with financial challenges.

3. Agensi Kaunseling dan Pengurusan Kredit (AKPK)

AKPK, an initiative under Bank Negara Malaysia, offers debt management programmes to assist individuals facing financial difficulties. These programmes consolidate existing debts into a single repayment plan.

Pros and Cons of Debt Consolidation Solutions in Malaysia

Here’s a detailed comparison of the advantages and disadvantages of the primary debt consolidation solutions available:

1. Bank-Supported Debt Consolidation

Pros:

• Straightforward Process: Ideal for individuals with a strong credit score and a manageable consolidation amount, making the process efficient.
• Reputable Institutions: Backed by well-established banks such as RHB, Al-Rajhi, Bank Rakyat, and HSBC, ensuring credibility and transparency.

Cons:

• Stringent Requirements: Banks place significant emphasis on credit scores, which can lead to rejection or less favourable loan terms for individuals with poor credit.
• Not All Banks Offer Debt Consolidation Loans: Many banks perceive debt consolidation as a high-risk product and may not offer it to borrowers struggling to manage existing loans.
• High Interest for Riskier Profiles: Borrowers with low credit scores may face steep interest rates due to the perceived risk.

2. Debt Consolidation for Bad Credit: Combining Bank and Non-Bank Solutions

Pros:

• Tailored Financial Solutions: Non-bank agencies assess your unique financial situation and help resolve bad credit issues, such as outstanding credit card balances, to improve loan eligibility.
• Access to Better Loan Terms: With extensive banking networks, these agencies secure favourable loan deals by positioning you as a lower-risk candidate.
• Ethical and Transparent Practices:  Focused on reducing both immediate and long-term financial burdens through clear and professional support.

Cons:

• Additional Costs: Fees may apply for settling bad credit debts upfront and structuring new loans, adding to the overall cost of debt consolidation.

3. Agensi Kaunseling dan Pengurusan Kredit (AKPK)

Pros:

• Reduced Monthly Payments: AKPK can lower monthly repayments by 30–50%, providing immediate financial relief.
• Comprehensive Support: Consolidates all debts into a single payment plan, simplifying management.
• Ideal for Non-Loan Seekers: Best suited for individuals who do not anticipate requiring new loans in the short term, promoting long-term stability.

Cons:

• Ineligibility for New Loans: Participants are restricted from obtaining new loans until existing debts are cleared, limiting financial flexibility.
• Increased Total Debt: Consolidated debts may carry interest rates of up to 10%, and longer tenures (up to 10 years) can result in higher overall repayments.
• Prolonged Repayment Period: While monthly payments are reduced, the extended repayment period can lead to longer financial commitments.

When to Consider a Debt Consolidation Loan Agency

• You have bad credit but still need a bank loan with cash in hand
• You’ve faced bank loan rejections but still require financing
• You’re struggling to manage multiple monthly payments.
• You’re consistently struggling to settle your outstanding credit card bills
• You have poor credit facilities or low credit scoring.
• You want a single and simplified repayment plan.
• You need help getting the best deals for a bank loan.

Warning Signs of Debt Consolidation Scams:

When seeking debt consolidation services, it is crucial to identify and avoid scams. Be wary of the following red flags:

1. Upfront fees or deposits: Legitimate agencies do not demand advance payments.
2. Promises of “guaranteed approval”: No reputable lender will approve loans without reviewing your financial situation.
3. Unlicensed or unregistered companies: Always verify that the agency is licensed and regulated.

Tips to Stay Safe

• Legitimate lenders will assess your financial history and provide clear, transparent terms.
• Ensure the company has proper licensing, secure websites, and reliable contact details.
• Trust your instincts—if an offer seems too good to be true, it likely is.

Always conduct thorough research before committing to any debt consolidation agency.

Debt Consolidation Loan Calculator Guide

Curious about how much you could save with a debt consolidation loan? Use a debt consolidation calculator to estimate potential savings.

How to Use the Calculator:

1. Input details of your existing credit card debts and personal loans.
2. Enter your total required loan amount in the “Loan amount” field.
3. Set the interest rate to 7% and select a 10-year loan term.
4. Click “Calculate” to view your potential savings.

The calculator will display how many months of payments you could save through debt consolidation. It is important to note that since this is an international calculator, actual Malaysian instalment amounts may be approximately 22% higher than shown.

Read More: Securing Bad Credit Loans: An In-Depth Guide

How to Apply for Loan with Bluebricks’ Debt Consolidation Services

As a bank loan and debt consolidation agency in Malaysia, Bluebricks specialises in helping individuals simplify their financial obligations. With our expertise and network, we help you secure lower interest rates, longer repayment tenures, and streamlined repayment plans.

Our expertise includes:

• Personal loan services
• SME loan services
• Mortgage loan services (to purchase a new home, refinancing and cashback purposes)
• Collateral loan services

Why Choose Bluebricks for Loan Consultancy?

Bluebricks offers comprehensive financial solutions tailored to your needs, including:

• We help clear your existing debts and negative records WITHOUT charging interest or requiring collateral
• We increase your chances of bank loan approval
• You’ll receive 100% bank-issued loans with direct payment to the banks
• We will prepare a detailed proposal with legal documentation
• No upfront fees – you don’t pay a single sen until your bank loan is approved
• We can provide emergency funding support (case-by-case basis)

Banks That Offer Debt Consolidation Loans in Malaysia

a) RHB Bank

Loan Amount: Up to RM150,000 (Private), RM300,000 (Civil), RM150,000 (Pensioner)

Interest Rates: 7.62% (Private), 3.04% (Civil), 3.80% (Pensioner)

Tenure: Up to 7 years (Private and Pensioner), Up to 10 years (Civil)

b) Al-Rajhi Bank

Loan amount: Up to RM250,000

Interest rate: 5.42%

Tenure: Up to 8 years

Minimum income: RM5,000

c) Bank Rakyat

Loan amount: Up to RM400,000

Interest rate: 2.89%

Tenure: Up to 10 years

Minimum income: RM2,000 (salary deduction preferred)

d) Bank Muamalat

Loan amount: Up to RM400,000

Interest rate: 2.77%

Tenure: Up to 10 years

Minimum income: RM3,000

e) HSBC

Requirement: HSBC/HSBC Amanah savings or current account holder for at least 6 months

Interest rate: 7.5%

Minimum income: RM3,000

f) AmBank

Loan amount: Up to RM150,000Interest rate: From 8.99%

Tenure: Up to 7 years

Minimum income: RM3,000

g) Hong Leong Bank

Loan amount: Up to RM250,000

Interest rate: 10.75%

Tenure: Up to 5 years

Minimum income: RM2,000

h) Maybank (GLC Only)

Loan amount: Up to RM200,000

Interest rate: 5.7%

Tenure: Up to 10 years

Minimum income: RM3,000

Note: Only available to employees of Government-Linked Companies (GLCs)

i) Bank Islam (Selected Industries Only)

Loan amount: Up to RM400,000

Interest rate: From 2.49%

Tenure: Up to 10 years

Minimum income: RM2,000

Requirement: Salary crediting and auto-deduction

Final Considerations Before Applying for a Debt Consolidation Loan

To improve your chances of approval:

• CTOS Score: Maintain a score above 550.
• Timely Payments: Ensure no late payments on current obligations.
• Debt Service Ratio (DSR): Keep your DSR below 70%; higher ratios may lead to rejection.

By addressing these factors, you can maximise your chances of successfully obtaining a debt consolidation loan.

Examples of Debt Consolidation

Debt consolidation can transform your financial situation by streamlining repayments and reducing interest. Let’s consider the following example:

Credit Card A:

Outstanding Balance: RM10,000

Interest Rate: 18% per annum

Monthly Minimum Payment: RM500 (5% of outstanding balance)

Personal Loan B:

Outstanding Balance: RM15,000

Interest Rate: 12% per annum

Loan Tenure: 5 years

Monthly Payment: RM400

Credit Card C:

Outstanding Balance: RM5,000

Interest Rate: 18% per annum

Monthly Minimum Payment: RM250

Before Debt Consolidation

• Total Debt: RM10,000 + RM15,000 + RM5,000 = RM30,000
• Total Monthly Payments: RM500 + RM400 + RM250 = RM1,150
• High Interest Rates: Credit card debts at 18% interest are particularly costly.

After Debt Consolidation

You opt for a debt consolidation loan of RM30,000 from a bank with the following terms:

• Interest Rate: 8% per annum (lower than credit cards or other loans).
• Loan Tenure: 5 years (60 months).

New Monthly Payment Calculation

Using a standard personal loan repayment formula, the monthly payment is approximately:

• Monthly Payment = RM30,000 × [8% ÷ 12 months] ÷ [1 – (1 + 8% ÷ 12 months)^-60]
  Approximate Monthly Payment: RM700

Total Payments After Consolidation

• Monthly Payment: RM700
• Total Payment Over 5 Years: RM700 × 60 months = RM42,000

Savings Comparison of Before and After Debt Consolidation

Before Debt Consolidation:

• Total Monthly Payments: RM1,150
• Total Interest Paid (Estimated Over 5 Years): Credit card interest (RM15,000 x 18% x 5 years) + Personal loan interest (RM15,000 x 12% x 5 years) = RM13,500 + RM9,000 = RM22,500

• Total instalment over 5 years: RM1,150 x 60 months = RM69,000
• You might still have a credit card outstanding balance of RM15,000

After Debt Consolidation:

• Total Monthly Payment: RM700
• Total Instalment Over 5 Years: RM42,000

Total Savings: RM69,000 – RM42,000 = RM27,000

Credit card outstanding balance of RM15,000 cleared.

Benefits of Debt Consolidation

• Lower Monthly Payments: Reduced from RM1,150 to RM700.
• Lower Overall Interest Paid: Significant savings on interest.
• Simplified Repayment Process: One monthly payment instead of managing three separate debts.

Examples of Debt Consolidation with Bad Credit