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Do you think this is a smart move to clear a debt?, Someone I chatted with said it was
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TSlIAmLegendl
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 Jun 13 2025, 12:15 AM, updated 6 months ago
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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?
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TSlIAmLegendl
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Jun 13 2025, 12:29 AM
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QUOTE(malz89 @ Jun 13 2025, 12:25 AM) 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 |
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TSlIAmLegendl
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Jun 13 2025, 12:37 AM
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QUOTE(malz89 @ Jun 13 2025, 12:34 AM) 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. |
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TSlIAmLegendl
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Jun 14 2025, 11:11 PM
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QUOTE(marfccy @ Jun 14 2025, 01:12 PM) just to let you know there exist credit cards that are "designed" for minimum payers with super low interest rate. same goes for certain bank loans having a huge credit facility is a very advantageous perk for many. alot of them have the money and financial intelligence to know that not utilising credit facilities are foolish. just like your case above, lets use a simple example i heard before which is very common. lets say one dude who earns RM10k/mth owes a bank RM100k in CC expenses/loans/debts whatnot. but dude didnt want to stop his current high maintenance lifestyle at all to clear the debt to zero so what the fella did was apply for those high credit limit credit cards or loans with low interest rates with long tenure (lets say 2%) then balance transfer whatever his purchases over to them. now all he need is to just pay RM2k in interest every month and the min payment of 5% of RM100k (RM5k), total RM7k/mth. he will still have 3k left to "spend/save" this is how usually the rich play around with credit facilities and afforded really expensive things. He's not eligible for a credit card unfortunately lol |
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