If I were you and really wanted to change:

1 Stop thinking about taking more loans or loans to replace loans (especially ones that give you extra cash)

2 Start thinking on how to pay back your existing loans as fast as possible
2a Think on how you can cut your current spending even further, then use any extra money you can spare to pay back your cc as soon as possible.
2b Think of downgrading your car. How much can it save you if you sold of your car and got a cheaper one? (think of maintenance, insurance, road tax, depreciation, petrol consumption)
2c If you can get to this stage you will be at a much better position already and can start thinking on getting rid of that huge existing personal loan.

A bit out of topic but if you dont mind, can I understand why you took a personal loan when you were younger? For what purpose? Its a sincere question and I am not judging. Just trying to understand why people take personal loans and end up in a financial trouble early in life. Thanks.

Is above a clariification of my "inaccuracies" or clarification of your first post?

Anyway, let's explain early settlement of house loan and credit card a bit further.

Credit card. Please re-read the last 2 para in my 1st post... "The only debt that is not a fixed monthly installment is the CC debt - which can be closed at any time. It should also be having the highest interest cost, so clear this first. Bear the pain and pay as much as you can instead of just the minimal every month, and clear it as soon as possible.

If you seriously need another loan to clear it, then do it. But think first whether you can commit and keep to the commitment of another monthly installment."

Early settlement of House loan. This is the biggest loan for most people in their life. And as pointed out by you yourself, the cheapest loan too. So how early settlement is early? Since the 1st portion of the tenure is about reducing the outstanding balance, and hence lowering the total value of the cost of interest. For sure we could "save" a lot of interest, if we have the money to settle it immediate after the lock-up period (if there is any lock-up period).

That is IF we have the money in hand. Or are you suggesting to take another loan to settle this cheap loan?

In most cases, the early settlement of house loan is when the house is sold. In other cases, it is in the last several years of the tenure when there is enough money to fully clear the loan, which maybe from savings or from EPF at age 50 or 55.

In the latter case, this settlement is debatable. If installments were paid in the past 20-25 years. why not continue it further the next several years? How much interest would it really save? What if a fatal accident occurs, is it worth it to terminate the loan and also the MRTA assurance on the loan?

And needless to say, early termination (and advance payment to reduce the outstand balance) of an existing housing loan is desirable when the current interest rate has changed significantly. But this re-financing; not replacing it with another loan like a personal loan.

As pointed out by Supersound, we don't have to work out all the nitty-gritty details and calculations when ball-park figures and common sense suffice. Interest free, or 50% cheaper - yes. Otherwise, don't waste time.

The answer is as above. Use ball-park numbers, rough estimations and common sense first before sweating the detail calculations. 3.9%. How much is the current interest rate? If it is not half, don't waste time figuring it out.

If you want to go down this path of discovering new and cheaper loans, there is no end to it. You are not the only person receiving these "fantastic" offers every now and then. Why waste time to entertain these type of calls and calculate the details, unless of course the offer is too good to be true. Which is often as it is, not true.

This post has been edited by j.passing.by: Apr 8 2016, 03:41 PM

The thing about finance is that there's always a precise number and is never up for debate. Everything else is noise. That number informs you definitively which decision is the optimum one. I don't expect most people to know how to work out that number.

Like you said, it is not strictly necessary. Living by general rules could be sufficient in most cases to make the optimum financial decision. Or the difference between optimal and non-optimal could be so small that it is not practically significant.

But when I spot someone perpetuating something technically unsound, I correct it for the benefit of others reading. Just like a doctor alarmed when some "expert" on the forum advocates others to be anti-vaxers.

This is not meant as an insult. Your understanding of the financial math behind this is incomplete.

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For clarity, I never advocated TS take more loan than he needs, but to take just enough to pay off his CC. I even backed it up with a calculation.

The savings from changing a min EIR 13.5% facility to a EIR 6.xx% facility is at minimum 6.01%.

Unless TS provided the wrong details about his new loan, that is the optimal choice. It is not up for debate.

I have question tho, at the age of 20 you toke a 80k loan?

Youngsters now are not like last time. Last time is we make enough savings before start enjoying, but now time has changed and people make debts and enjoy first

make huge debts and enroll in AKPK? good idea? else just go for bankruptcy.. whats big deal for them?

People are like this now
And if a person knows how to think, he won't simply take personal loans no matter what happens.
But with Malaysians are having debt/GDP at 89.1%, this number shows that they don't know how to make a proper financial managments

lol spend on things which is not necessary like luxury item and end up in debts

some i saw in akpk only 30k debts start to enrol liao coz afraid of bankruptcy ..

im glad to see there are increasing numbers of bankruptcy each days. kudos

End of 2014 it was 75-85 a day, 2015 government chickened out to announce. This year announce 2015's and it is about 200 a day

glad to see this figures

hope 2016 increase 300 per day

Nope, should be 400

If I followed correctly should 23. Currently 29. Paid 5-6 years. 15year personal loan.

I thought max only 10 yrs?

last time p.loan can go up to 20 years.

the same year they set max house loan to 35y, is also when they set p.loan to 10 years.

Sorry for late respond, i was bz, the idea for that personal loan was to open up business, but The business was a total failure. I was too young to understand how to operate business, and to manage employees.