Key Takeaways
- Ever wondered under AKPK can apply housing loan? AKPK enrollees face challenges in getting new housing loans due to compromised financial standing from existing debts.
- Taking out a new personal loan to consolidate debts managed under AKPK can increase their financial commitment and reduce their capacity for additional loans.
- Banks may view AKPK enrollees as high-risk due to their high Debt Service Ratio (DSR).
- Refinancing an existing property is an alternative for AKPK clients.
- The feasibility of refinancing depends on factors like an increase in property value, outstanding mortgage balance, and bank requirements.
“If under AKPK can apply housing loan?” This question resonates with many aspiring homeowners who are navigating their financial journeys under Agensi Kaunselling dan Pengurusan Kredit (AKPK).
We dive deeper into this vital question, offering clarity and direction for those embarking on the path to homeownership.
This article is crafted to demystify the complexities surrounding housing loan eligibility for individuals under AKPK’s programme, ensuring you are well-informed for this significant step in your financial journey.
What are the Challenges of Applying for a Housing Loan Under AKPK
Securing a housing loan can be particularly challenging for those enrolled in AKPK’s Debt Management Programme (DMP).
This is primarily due to how banks perceive the credit history and reliability of borrowers under this programme. The key factors that contribute to these challenges are:
1. Credit History
When you join the programme, it becomes a part of your credit history. Your credit report, including CCRIS (Central Credit Reference Information System), will reflect your involvement in AKPK’s DMP.
This is often seen as a red flag by most banks, as it indicates that you have experienced financial difficulties in the past and required assistance to manage your debts.
Thus, your overall financial standing is compromised. What’s more, this history can make them hesitant, as it may signal potential issues in managing future financial obligations.
2. Increased Financial Commitment
You may consider taking out a new personal loan to consolidate and pay off your existing debts that are managed under the AKPK programme.
While this approach can help streamline your debt management, it comes with a significant drawback.
The new personal loan inevitably increases your financial commitment, as you now have to repay this loan in addition to your existing debts.
3. Reduced Financial Capacity
The increased financial commitment from the new personal loan also negatively impacts your capacity to take on additional loans, such as housing loans.
Banks assess your financial capacity to repay loans through metrics like the Debt Service Ratio (DSR).
When you take on a new personal loan, your DSR often becomes unfavourable, meaning a significant portion of your income is already earmarked for debt repayment.
4. Risk Assessment
A history of financial difficulties, as indicated by your enrollment in AKPK, compromised financial standing and high DSR, elevates the perceived risk for the bank.
Banks are typically cautious about extending housing loans to individuals who are already struggling with debt repayment, as there is a higher likelihood of default.
As a result, you may face difficulties in applying for a housing loan.
5. Credit Score
An important consideration for banks is your credit score. Being under AKPK can adversely affect this score.
A lower credit score is often interpreted as a higher risk, which can be a significant barrier to securing new credit.
Moreover, meeting the typical credit score requirements set by banks for loan approval becomes more difficult.
Read More: Personal Loans for Blacklisted Individuals in Malaysia
Refinancing as an Alternative
Refinancing refers to the process of replacing an existing mortgage with a new one, often with different terms and conditions.
If you’re struggling with existing debts, refinancing can be a viable alternative to secure some financial relief and manage your debts more effectively.
However, whether refinancing is a feasible option for AKPK enrollees depends on several key factors:
1. Increase in Property Value
One crucial factor is the market value of the existing property owned.
If the property’s value has significantly increased since the time you initially obtained your mortgage, this can definitely work in your favour.
The increased property value can provide additional equity, which can be used to consolidate your debts, including those managed under the AKPK programme.
2. Low Outstanding Mortgage Balance
Another factor that affects the feasibility of refinancing is the remaining balance on the existing mortgage.
If you have already paid down a significant portion of your mortgage and have a relatively low outstanding balance, this makes refinancing much more attractive.
A lower outstanding balance means you can potentially refinance for a lower loan amount, which can help consolidate your debts more effectively.
3. Creditworthiness and Bank Requirements
Lastly, you should also consider your creditworthiness and the specific requirements of banks when exploring refinancing options.
While refinancing can be a solution, you still need to meet certain credit and income criteria set by your chosen banks or financial institutions to qualify for a new mortgage.
Read More: What Are the Best Alternatives to Personal Loans in Malaysia
Why You Should Refinance Your Existing Property to Secure a Housing Loan
The primary purpose of refinancing in this context is debt consolidation. Refinancing enables you to use the proceeds to systematically pay off your high-interest debts, streamlining your finances.
This process often results in a single, more manageable monthly mortgage payment. Moreover, you may also benefit from a potentially lower interest rate on your new mortgage compared to the rates on your previous debts.
Refinancing an existing property can be a viable alternative for AKPK clients who are looking to manage their debts more effectively. By using the equity in your property, you can consolidate your debts and potentially reduce your financial burden.
Read More: How to Apply for Personal Loan for Bad Credit in Malaysia
How Bluebricks Can Help Individuals Under AKPK (H2)
While being under AKPK signifies a responsible step towards managing your debts, it also brings unique challenges in securing a housing loan.
At Bluebricks, we help you understand these challenges and prepare to address them effectively in your housing loan application process.
Bluebricks is a reputable bank loan and debt consolidation agency offering comprehensive solutions, including:
- Personal loan services
- SME loan services
- Mortgage loan services (for buying a new home, refinancing and cashback purposes)
- Collateral loan services
Bespoke Loan Consultancy Services
We are dedicated to assisting individuals under AKPK in their applications for housing loans.
As such, we provide specialised consultation and insights to our clients to help them make informed decisions that are best suited to their goals.
Our loan specialists will consider several factors when recommending a suitable financial product, including:
- The specific loan amount you require.
- The urgency with which the loan amount is needed.
- Whether you or your parents own a property that has been held for over ten years.
- Your income level.
- Your CTOS score (such as your credit score and credit history).
Under AKPK Can Apply Housing Loan – FAQs
Employing these strategies can pave the way for successfully applying for a housing loan, even under the constraints of AKPK.
It’s about demonstrating financial stability and responsibility after completing the DMP, which can significantly enhance your appeal to lenders.
Check out some of these commonly asked questions to help your homeownership journey.
You must complete AKPK’s DMP before applying for a housing loan.
This waiting period allows your credit report to reflect the positive changes in your financial status, thereby increasing the likelihood of loan approval.
If you need to urgently apply for a housing loan, you can ask your spouse or siblings to settle your AKPK loan or apply for the housing loan in their name.
Yes, you can consider alternative lenders who may have different criteria than traditional banks.
However, it’s crucial to ensure these lenders are legitimate and not predatory loan sharks.
Enrollment in AKPK’s programme can impact your credit score and affect your chances of obtaining a housing loan, as it indicates past financial difficulties.
However, successfully completing the programme and maintaining good financial habits can help rebuild your credit score.
