Personal loans are the leading factor of youths declaring bankruptcy these days, said consumer financial expert Prof Dr Mohamad Fazli Sabri.
Earlier this year, the Malaysian Department of Insolvency (MDI) reported that more than 280,000 Malaysians have declared bankruptcy as of March this year. However, the situation could worsen as the prices of goods continue to rise.
Meanwhile, experts have advised Malaysians to manage their finances wisely and return to the basics. Just recently, a Malaysian financial consultant, Tee took to his Facebook page to share a shocking phenomenon he noticed among our youths.
In the post, Tee, who had 10 years of experience in the field, shares that he noticed that youngsters these days are accumulating massive debts. He said that he recently met a 27-year-old Malaysian who came to him for help.
After having a look at his documents and debts, he shared that the young man could have hit a dead end.
“He earns RM5,000 per month but he has a massive amount of debt, and he doesn’t even have a property yet,” he shares.
Meanwhile, he had more than RM25,000 worth of credit card debts and is required to serve a minimum monthly instalment of RM1,250, a personal loan of RM180,000 (a monthly instalment of RM1,600) and a car loan which he needs to pay a monthly instalment of RM1,200.
Tee said that his instalment payments are already terrifying enough but it does not end there.
“He owes his friend an amount of RM8,000. Besides that, CTOS records show his debt with a motorcycle shop amounting to RM5,000. He hasn’t paid the bank in 1 to 2 months,” Tee said.
With this, the young man needs to pay instalments of RM4,050 a month and this leaves him with only RM950 to spend. This does not include the amount he needs to pay his friend and the bank for the motorcycle.
Tee admitted that this case was out of his capabilities, hence, he suggested he reach out to Counselling and Credit Management Agency (AKPK), hoping that the officers there are capable of helping him.
Here’s some advice to not overspend and get yourself into a debt trap. Financial planning is more important now, especially in times of inflation.
What do you think about this? Share your thoughts!