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Too many loans to clear, too little time? Being in debt and juggling multiple loans like credit card, overdraft, personal and student loans, mortgages and car payments can be stressful – but all it takes is the right strategy to help you manage your debt.


While paying off all your loans is a long-term goal, you can start planning your debt management journey today with these 4 tips:

1. Set clear goals for paying off your loans

The first step to managing your debt is to find out your current debt situation. To get an overview of your loans, you can get a credit report that outlines your current outstanding balance, number of loans and credit limit. In Malaysia, you can request for the CCRIS report from Bank Negara or the CTOS report from CTOS Malaysia, a private Credit Reporting Agency.


You can then decide on how many years you want to give yourself to pay it off, whether it’s 5 years, 10 years or even longer.

2. Consider debt consolidation or refinancing    

Debt consolidation is a method of rolling all of your loans into one single, lower interest payment. There are two primary ways to consolidate your debt: a debt consolidation loan and a credit card balance transfer.  


A low-interest debt consolidation loan can be beneficial to consolidate multiple high-interest loans such as credit cards and personal loans. This can help to lower your accumulated monthly instalments and interest rates.


For credit card bills, a good option to consider is a balance transfer – which means transferring your existing credit card balance to another credit card or bank with a lower interest rate, such as CIMB Balance Transfer, which offers interest rates from as low as 0.5% per month for 6 months. 


If you have a home mortgage, consider refinancing your home, which can lower the interest rates.


3. Set payment reminders to stay on track

Avoid being stuck with additional charges such as late payment fees (you can be charged 1% of your outstanding card balance!) by setting up a payment reminder on your phone or computer. 

4. Which loan should I pay off first?

Planning to use your extra money to clear some of your loans? Here are  two well-known strategies you can use: 


  • You can pay off the loan with the lowest balance, while maintaining the minimum payment amount on other loans. 


  • You can focus on the loan with the highest interest rate and continue paying the minimum amount on other loans.


But which one suits you best? The key is to choose a solution that works for your lifestyle and keeps you motivated to continue your debt management journey.


The most important thing to remember is that clearing your debt can take a while, so it is important to stay on track and consistently practice good money management habits to help keep your budget in order. 


This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve all our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.