Overlooking the ocean is one real breathtaking view. I came to a point of questioning myself how long more would i endure the pain everything under monthly repayment and to keep paying month after month wondering how soon I can get over and having my money for me.

There must be a way to defeat debts and I need a strategy and I need to find out their weaknesses in order to win this freedom battle. You can’t really be free as long as you are tied with debts. Don’t you think so?

Dalam satu pepatah oleh Sun Tzu, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

Debt is my enemy. To win over it, I need to know my enemy profile i.e apa itu Principle, apa itu remaining balance, macam mana interest rate nii dikira dan how much that I pay every month goes to principle.

This is what I learnt that give me basic understanding about my enemy 🙂


  • Principle = RM10,000
  • Remaining Balance = RM10,000
  • Interest Rate = 5%
  • Minimum Monthly = RM100

Assuming above is new amount that I loaned. Principle is the original loan amount (Kira macam full strength of my enemy) and as I make monthly payment (as my weapon to defect debts), a portion that goes to principle will decrease the Remaining Balance. Remaining Balance atau baki hutang is the lifespan of my enemy.

So, how long will I need to pay with RM100 sebulan? (starts pressing calculator..!) A lifespan of a loan without interest rate (wouldn’t that be nice to do it in real life) will look like this.

It will take me 8 years and 4 months to complete my loan repayment. Unfortunately, loan become a lot harder with interest rate acting like an armor. OK, here comes 5% interest rate from the Lender (the company who lent us money for car, or house.. lebih kurang for credit card sikit sikit).

Like it or not, business is business. We need their money and they make money off us. The interest rate is my lender’s monthly paycheck. Every month when I make my monthly payment, some of it will go to towards paying down my principle, and the remainder goes into lender’s pocket.

For the cost of one year, the interest rate will be RM500.

To calculate my current monthly interest payment, I need to divide RM500 to 12 months and that brings me a total of RM41.76 .

In the current month, I will pay RM41.67 in interest. With a minimum monthly payment of RM100, how much of that money would be going towards my principle?

RM58.33. In other words, a weapon of RM100 will only did RM58.33 worth of damage.

Let say now, I made my first payment;

  • Principle = RM10,000
  • Remaining Balance = RM9,941.67
  • Interest Paid = RM41.67
  • Principle Paid = RM58.33
  • Total Paid = RM100

The following interest rate is calculated against the remaining balance ( bukan principle ye!) and it will look like this.

Since my minimum payment is RM100, money that will go towards principle is RM58.58 and RM41.42 will go to the lender.

Notice tak how more money went towards the principle (RM58.33 => RM58.58) and less money went into the lender’s pocket (RM41.67 => RM41.42)? Everytime, I attack my enemy the armor grows weaker.

Okay, Let see 2nd round payment

  • Principle = RM10,000
  • Remaining Balance = RM9,883.09
  • Interest Paid = RM83.09
  • Principle Paid = RM116.91
  • Total Paid = RM200

See, how expensive this loan is shaping up to be. It already cost you RM83.09. If you were to borrow RM10,000 with an interest rate of 0.5%, that money would be extremely cheap. An interest rate of 25% (not uncommon for credit cards) is very expensive money to borrow!

So, bayarlah sebanyak mana kita pinjam dan interest will indicates how much.

Let’s see how much it costs to borrow this RM10,000 (the amount I will pay in interest), and how long it takes to pay down this debt.

  • Principle = RM10,000
  • Remaining balance = RM0.00 ( It is completely paid off)
  • Interest paid = RM2,962.85
    Principle paid = RM10,000
  • Total paid = RM12,962.85
    Total time to pay down this loan = 10 years and 8 months

Bayangkan for RM10000 pinjaman, If I continue paying minimum payment, I will endure almost 11 years to paid down and RM2962.85 to the lender.

By knowing how interest rate works, I learned my lesson and I’m grateful to have a better picture now. It’s time to focus to take my debts one at a time now. This is because, the more money I put towards a single debt, the faster its armor will weaken and the deadlier my monthly payments become.( what a real debt battle, hah!)

In search for the method to pay debts, I came across 2 different method to pay off my debt; Avalanche and Debt Snowball. Avalanche focus on paying off loan with highest interest rate first and Debt snowball focus on attacking debt at the lowest remaining balance and I decided to follow Debt Snowball method.

As soon as one lowest debt balance is defeated, move on to the next debt, and continue to repeat the process until I become debt free!

With this in mind, what if I pay RM200 per month instead of RM100/month payment?

  • Principle = RM10,000
  • Remaining balance = RM0.00
  • Interest paid = RM1,237
  • Principle paid = 10,000
  • Total paid = $11,237
    Total time to pay down this loan = 4 years and 8 month

By increasing my monthly payment by only RM100, I’ll be able to get out of debt 5-6 years sooner and save RM1725.85 on interest payments.


In this fight, knowledge and weapon (money) isn’t enough to win. I need some skills to ensure victory 🙂 and the I build my skill is through My budget! I truly understand that my money skill are build through CONSISTENCY of taking control of my finances and now seeing three of five open debts has been settled, I am blessed.

Thank you, Dave Ramsey!


Leave a Comment

Your email address will not be published.

Scroll to Top