Q & A › Category: Properties › reducing-housing-loan-by-taking-personal-loan
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Sumi asked 6 years ago

Hi KC, I have a housing loan with outstanding balance RM300k (principal only RM135k). Is it worth for me to take up Personal Loan with interest of 10% to reduce the principal.

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KCLau Staff answered 6 years ago

Hi Sumi,
I am confused about your statement. Outstanding loan RM300k, means the principal loan remaining is also RM135k.

But I think what you meant is your initial starting loan is RM300k. But over the years, it is only left with RM135k to pay off right?

By the way, personal loan almost 99% of the time higher interest that your housing loan. So it is never worth it to do what you intend. Imagine personal loan is without collateral, how could the interest rate be lower? It is higher risk to lend out personal loan compared to housing loan. Bank won’t be doing that.