Loan Tips
Credit Card vs Personal Loan: Which Costs More?
A detailed comparison of credit card interest rates versus personal loan rates in Malaysia.
Many Malaysians don't realize how much they're actually paying in credit card interest compared to personal loan alternatives.
Credit Card Interest
Credit cards in Malaysia typically charge 15–18% per annum on outstanding balances. This compounds monthly, meaning you pay interest on interest.
Personal Loan Interest
Bank personal loans and consolidation loans typically range from 4–8% per annum with flat rate calculations. While the effective rate is higher than the flat rate, it's still significantly lower than credit card rates.
A Real Example
| Scenario | Interest Rate | Total Interest Paid | Time to Clear |
|---|---|---|---|
| RM 50,000 credit card (minimum payments) | 18% p.a. | ~RM 45,000 | 15+ years |
| RM 50,000 consolidation loan | 6% flat | ~RM 21,000 | 7 years |
The savings are clear — consolidation could save you over RM 24,000 in this example.
See your savings: Try pinjamHub's consolidation calculator with your own numbers.
Exploring debt consolidation?
Use our free calculator to compare consolidation options side-by-side.