So I don't wanna disclose much info on this guy but let's say we sat down and chatted about loans and other financial stuff. He told me he was in debt with Shopee SpayLater and SLoan which both combined accumulating at RM5500, he is required to pay at around RM800 per month. He told me that he is going to clear it all this year if he sticks to his plan, he had drawn out this plan where he will pick up another personal loan from AEON of RM5000 with 12 months repayment of RM450. I asked him why, he said because instead of paying RM800 per month, he now only pays RM450.. I told him that it was a bad move to pick up another loan to pay off old ones because he is digging his grave deeper and deeper, while yes it is a lot less to pay per month but the time it took to repay all of them is another 12 months. I advised him not to but he told me this was a smart move, I beg to differ, he told me he COULD pay the Spaylater and Sloan without the need to pick up another loan but doing so would mean he is forced to be frugal, what do you guys think? Is this really a smart move or is he just a retard?

Smart move if he's not paying any interest. I personally would get more loans and pay them monthly. So I have more cash on hand. Considering inflation, you're actually paying less for the things you buy in the past. However, if he's paying interest perhaps not a very smart move.

450 per months for 12 months = RM5400
Loan is RM5000

So yes, with interest

If the aeon loan interest rate is lower than shopee interest then its a smart move.

People do it all the time when they refinance to get lower interest rate.

That's 8% interest. Depends how he lives with it? To me not too smart, unless he can make more than that with the cash on hand. He is just bad at managing his money I guess? Or prefer to spend beyond his means.

I would go for loans which are low. And I know I have hard cold cash that I can cover the loan, example interest that I'm earning more than loan. Yes, I would do that.

In my HONEST opinion shouldn't he just be frugal for 6 months? He said he can clear it all before the end of this year, I think he should suffer now and live a debt free life afterwards, not adding another 12 months of slavery.

he's just shifting debt, not reducing it. he'll end up paying more interest and staying in debt longer. now that he feels more comfortable with a smaller monthly repayment, there's a good chance he might borrow again. it’s more about avoiding discipline than solving the root issue.

honestly, it’s short-term comfort that leads to long-term burden but i wouldn’t argue with him. people have different financial mindsets. it’s not necessarily wrong, just his personal choice and lifestyle. we need to accept that there are people like him in society. the best we can do is break it down for him and let him think it through. if he gets it and tones down his spending, great. if not, that’s his path. you’ve done your part as a friend.

i had similar situations here too. with several credit card debt on my shoulder, it make me thinking to find one solution for all. few bank had contact me to give a solutions to take settlement loans. how i able to know its worthy or not?

current:
UOB cc: 15k ~ 1k/mth
CIMBcc: 5K 400/mth
Aeon: 10k 600/mth

with current expenses, there is a month that i had to use my cc.

i watch ramsey baby step, but i not able to understand correctly how its works. any thought?

Balance transter with 0% interest ( 1 year ) to 1 card then settle focus on the payment plan . No brainer move bro .

Shopee if not mistaken 18% aeon maybe 7-9% . Ya in a way yr friend right but confirm he drag the loan tenure for sure which make him stupid also .

If you want to follow the ramsey baby steps:
1) cut all your credit cards, because they are anti-debt and do not want you to incur additional debt while paying off existing debt.
2) have 1k emergency fund.
3) after paying all the necessities (food, utilities), all other money go to paying your debt using the snowball method (smallest total, regardless of interest rate), which in this case is the 5k loan, then 10k then 15k. put all you have into the smallest, while paying the minimum on the others. you will withdraw all savings/investment to get rid of the debt. you don't put money on ASB to get 6% when you have CC debt at 18%.
btw, you would also need to cut down on the lifestyle - no holiday trips, no eating out, etc - they would say the only time you are in a restaurant is if you are working there.
4) once you have paid off all debt, then set 6 months emergency fund
5) then start investing your money.

This post has been edited by th3.h04rd3r: Jun 13 2025, 01:33 AM

9.85% loan rate RM5000 with 12 months repayment of RM450. https://seller.shopee.com.my/edu/article/14034
8% loan rate, AEON of RM5000 loan with 12 months repayment of RM450 (RM5500 for 12 mths)

Anyway 8% loan rate is Q high, i rmb i saw a few 5% to 6% loan rate
As mentioned abv, there is Balance Transfer of 0%...which is perfect in ur scenario. Thats abt RM416 per month

debt free live is awesome

Good morning pundi

just use affinbank 0% interest 0% admin fee.. they have promo yearly and everytime i see it's there I'll just sign up. i don't have much to BT though usually around 10k? but always do so when they got promo.

Paying of debt is one thing, discipline is another. Advise your friend dont gatal2 payoff then add debt again.

tell him it's 2x5 5x2 even if he chose to cover debt with another debt, he's just expanding his debt from short term to long term: extending his debt term.

Assuming the SPay and Sloan debt pay total of RM800 per month until end of this year: meaning remaining ~7 months x RM800 = RM5500

If he chose to cover the SPay and Sloan debt with AEON = 12 months x RM450 = RM5400

Is it worth it? In this context no.

He may feel that 400 spreading into 12 months may not be hard on him compared to paying 800 monthly. Basically he has more to spend during that shorter period but paying more for that benefit. Everyone has different priority, so hard to generalised. Something you may feel stupid could be smart to others.

I'm a person who always spend below my mean. I don't take loans unless needed to and usually those would be 6 figures loan instead of these small amount loan.

Shopee SpayLater and SLoan which both combined accumulating at RM5500 already incurred interest, so now get another loan with 8% pa to pay off.

Trust me, it will not end there. There will be another with interest to cover aeon.

All those are fixed rate loans.

Bank: Thank you

This post has been edited by jojolicia: Jun 13 2025, 09:07 AM

morning