Debt is a hot topic in Malaysia—and honestly, it’s no surprise. Prices for things like houses have skyrocketed over the years. My mom bought a terrace house for RM70,000 decades ago, and when she sold it 10 years ago, it was worth RM500,000! Meanwhile, salaries haven’t increased 10x like that.
For many of us, paying cash for big purchases isn’t realistic, which is why debt exists. But if your debt is beyond your control, like being 28 years old and drowning in loans, it’s time to act.
Here’s a step-by-step guide to tackling your debt efficiently:
Step 1: List All Your Debts
Write down all your debts with the amount owed and monthly installments. Knowledge is power!
Step 2: Prioritize Your Debts
Decide which debt to tackle first. Consider:
Interest rates
Loan duration (short-term vs long-term)
Step 3: Choose the Right Debt Strategy
Here are 5 proven ways to pay off your debt effectively:
1️⃣ Debt Swap – Move your high-interest debt to a lower-interest option.
Example: Credit card debt at 18% → transfer to another card at 0–8% interest.
This reduces the cost of repayment significantly.
2️⃣ Debt Stretch – Extend your loan period to lower monthly installments.
Example: Personal loan from 10 → 20 years
Great for improving cash flow, but don’t use it to borrow more.
3️⃣ Debt Snowball – Pay off the smallest debt first to build momentum.
Once one is gone, roll its payment into the next smallest debt.
4️⃣ Debt Avalanche – Pay off high-interest debts first for maximum savings.
Example: Credit card 18% → Personal loan 8% → PTPTN 1%
Fastest way to reduce interest paid overall.
5️⃣ Debt Consolidation – Combine multiple debts into one low-interest loan.
Often used with refinancing assets like a house.
Example: Refinance your property, pay off all small debts, focus on one manageable loan.
⚠️ Warning: Only use once or twice in a lifetime and with proper financial advice.
The Key: Build Better Habits
No matter which method you choose, the real solution is changing your spending habits. Avoid repeating the same mistakes, and soon you’ll be debt-free!
💬 I want to hear from you: What’s the best debt strategy you’ve ever tried? Share it in the comments below!
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