Credit Term
Debt Consolidation
Combining several debts into one loan, ideally at a lower interest rate, so you make a single monthly payment instead of juggling many. It can lower your total interest and simplify repayment — but only if you stop adding new debt.
A consolidation loan pays off multiple balances — cards, personal loans — and replaces them with one facility, often at a lower rate and a fixed term. The benefits are a single due date to manage, a potentially lower monthly repayment, and a clear payoff date. For someone with several high-interest card balances, this can meaningfully cut the interest they pay and reduce their DSR.
Consolidation is a restructuring, not a cure: it works when it is paired with a change in habits. The classic trap is consolidating card debt, then running the cleared cards back up, ending with more debt than before. If your debts are genuinely unaffordable rather than just scattered, a structured programme through AKPK may suit you better than a new loan. Compare the interest saved against any fees before committing.
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This definition is drafted against primary sources (Bank Negara Malaysia, AKPK and the relevant Acts) and is pending editorial fact-check. If you find an error, tell us and we will correct it with a dated note.