Malaysia is one of the countries in the region that has one of the highest household debt.
Because of this in 2013, Bank Negara Malaysia (BNM) announcing a few strict policies to curb the situation.
One of the steps taken is concerning the Refinancing Home Loan, where ten years limit in refinancing cash out was introduced to calculate borrower loan eligibility.
However, the facts that so many of us are still in debts where take-home income can be as low as RM1000 per month is something very alarming.
Imagine earning RM5000 per month, and after paying all the bills, you left with RM1000 to survive another 30 days for food, transportation, entertainment and some other life surprises that may or may not happen.
I believe it can be challenging for some people.
After a few years, a new hybrid of refinancing was introduced by certain banks – Refinancing Home Loan To Consolidate Debt.
Refinancing Home Loan To Consolidate Debt is something created to help people with lots of debts, high installment, and high interest rates.
For this new Refinancing Home Loan, all the debts will be consolidated to ONE home loan account. The borrower will focus on paying ONE account, one installment monthly.
Sound great so far?
How does it work?
It’s like any refinancing procedure; you need to apply for the home loan.
Your new home loan will be divided into two accounts.
- Home Loan 1 will be used to cover the outstanding balance of the existing home loan.
- Home Loan 2 will be used to cover the consolidated debts.
For Example,
The new Refinancing home loan is RM500,000.
The new bank will use RM300,000 to cover the outstanding home loan.
The balance RM200,000 will be used to cover all your other debts.
The new bank will directly fully settled with other consolidated debt’s banks.
And if there is an extra from the RM200,000 after paying your debts, the cash out portion will be put in back into your home loan account or will be given to you by the bank into your account. It depends on the bank’s policy.
So far, I hope you understand.
Okay, I hear some of you might say.
“I prefer if the bank will provide me the cash-out and once received the money, I will directly pay to the bank.”
Sure, you can do.
But, tne thing that is beautiful about this Refinancing Home Loan To Consolidate Debt is the bank will not calculate the loan that you consolidate as commitment.
It’s means that if you agreed to consolidate your personal loans or car loan, banks would not calculate this as commitment.
So, your debt service ratio (commitment over income calculation) will be lesser, and it means the bank’s approval will be more comfortable.
It’s also mean it’s easier for you to consolidate more loans in the refinancing.
Swarming with hundreds or thousands RM of bills to pay monthly, it’s can be exhausting.
Out of all the people, I do understand how you feel.
By doing this Refinancing Home Loan To Consolidate Debt, you will be able to breathe again.
Now, those personal loans that come with high installment because of shorter tenure can now enjoy longer tenure up to 35 years with the new Refinancing Home Loan. Lower installment, lower stress.
We are not born with a silver plate. In every corner of life, we will face some financial challenges. It can be either when buying your first house, paying for your wedding, medical expenses for your children, children education and so on. It can be anything.
All these require a lot of money.
Now with this Refinancing Home Loan To Consolidate Debt you’re able to restructure your financial again.
You’ll have less stress of thinking paying the high installment and more time to earn money.
At this time of writing, there are only a few banks participates in Refinancing Home Loan To Consolidate Debt.
The Home Loan interest rates will be varied depending on the loan amount, customer profile and bank. Hence, the interest rates is very competitive.
If you’re interested to know more about Refinancing Home Loan To Consolidate Debt and which banks providing such financing,
feel free to call us at 012-6946746.
And we do think; this is such an excellent opportunity for people who need to restructure their debts and to manage their financial again.
Are you ready for this?
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