Key Takeaways
- Post-default, banks are hesitant to modify loan terms or offer new loans with favourable conditions, limiting options for improving existing loan terms.
- Defaulting on a loan makes individuals less attractive to lenders, reducing the likelihood of approval for new loans or credit cards.
- It can restrict access to overdrafts and credit lines, as well as hinder entrepreneurs’ ability to secure financing for business ventures.
- It can affect individuals associated with the borrower, such as joint account holders or guarantors, hindering their access to credit and affecting their credit ratings.
Ever wondered, if your loan defaults, what options are no longer available to you?
When a loan defaults, your financial landscape can shift dramatically, impacting not only immediate options but also future financial endeavours.
Continue reading to explore the ramifications of loan defaulting and discover how Bluebricks, a trusted bank loan and debt consolidation agency, can offer solutions tailored to your needs.
What Happens When You Default On A Loan in Malaysia?
By defaulting on a loan in Malaysia, your options are limited. Individuals not only face immediate financial consequences but also encounter long-term challenges in accessing credit and managing their finances effectively.
Here’s a closer look at the ramifications of loan defaults:
1. Restructuring and Rescheduling Limitations
While restructuring or rescheduling an existing loan is often considered to improve terms or reduce monthly payments, defaulting on a loan in Malaysia significantly limits these options.
Post-default, banks and financial institutions become cautious, viewing the borrower as a higher risk. Consequently, they are reluctant to modify existing loan terms or offer new loans with favourable conditions.
2. Ineligibility for New Loans and Credit Facilities
Defaulting on a loan renders individuals ineligible for various types of credit facilities, including personal loans, mortgages, and credit cards.
Such defaults signal a failure to meet financial obligations, elevating the perceived risk for banks.
Consequently, individuals find themselves excluded from opportunities to secure essential financial resources and are forced to contend with the enduring repercussions of their defaulted loans.
3. Challenges in Securing Business Financing
Bank loan facility defaults can impede entrepreneurs’ and business owners’ ability to obtain financing for their ventures.
Banks often assess the personal credit history of business owners when evaluating business loan applications, making it harder to secure loans or lines of credit, which can hinder business growth.
4. Limited Access to Overdrafts and Credit Lines
Overdrafts and credit lines typically offer flexibility and act as a financial safety net for managing personal finances and cash flow.
However, following a loan default, access to such facilities is often restricted. Banks may reduce the overdraft limit or revoke the facility altogether, limiting financial flexibility for the borrower.
5. Impact on Joint Accounts and Guarantors
Loan default not only affects the borrower but also has consequences for individuals associated with the defaulted loan, such as joint account holders or guarantors.
These individuals may encounter difficulties in accessing credit themselves or may see their own credit ratings negatively impacted due to their association with the defaulted loan, creating additional financial challenges.
Read More: AKPK SME Loan Malaysia: Financial Help for Businesses
Bluebricks’ Loan and Consultancy Services
Navigating the aftermath of loan defaulting requires careful consideration and proactive measures to rebuild financial stability and regain the trust of banks.
However, fret not! Bluebrick, a trusted bank loan and debt consolidation agency in Malaysia, stands ready to assist you.
Our financial experts offer comprehensive services, including:
- Personal loan services
- SME loan services
- Mortgage loan services (for buying a new home, refinancing and cashback purposes)
- Collateral loan services
Additionally, we provide bespoke consultancy services by considering factors such as:
- The specific required loan amount.
- How urgent the loan amount is.
- Whether a property has been held by you or your parents for over ten years.
- Your income level.
- Your CTOS score (such as your credit score and credit history).
Why Bluebricks
1. One of the Top 10 Leading Loan Agencies in Malaysia
Our loan agents represent both individuals and businesses, offering technical and financial advice to help secure loan approvals. Even if banks have previously rejected you, we provide access to a broad spectrum of loan options. Our aim is to enhance the success rate of your loan applications and minimise rejections.
2. Over 10 Years of Experience
With over a decade of experience and current banking knowledge, we excel in securing personal, business, mortgage, and collateral loans, navigating challenges like CTOS/CCRIS, and guiding clients confidently towards successful loan approvals.
3. One-Stop Solution
We provide a one-stop loan service, compiling various options from banks and credit institutions for you. Simply submit your income statement, assets, liabilities, employment record, and credit history, and we’ll handle the collateral and documentation to streamline your loan approval process.
4. Full Financing with 100% Bank Loans
We ensure 100% bank loan availability to provide full financial support, making it easier to achieve your goals and build a positive credit history.
5. No Upfront Payment Required
Our no upfront payment policy is designed to ease your financial journey, allowing you to start your investment without initial costs, reducing immediate burden and demonstrating our commitment to your satisfaction and trust.
