Hi,

I am considering taking the CIMB HomeFlexi loan, however there is a Rm200 registration fees and RM10 monthly maintenance fees.

I came to know that for CIMB Home financing-I Islamic loan, it offers the similar rate as the conventional HomeFlexi but minus the registration and monthly fees.

I know the earlier generations of Islamic loan is known to have a higher interest rate and extra terms , making the actual cost of financing higher compared to conventional, but CIMB is claiming the current Islamic loan package is on par with their conventional, is there any catch here ?

Is there any disadvantage in taking an Islamic loan, or specifically CIMB home financing-I ?

Any bankers / sifu could be kind enough to shed some light on this matter would be much appreciated.

Thanks.

You might get suprised when you saw your Islamic loan statement. Because you might saw in your 1st month statement balance RM240k even you only borrow RM160k.

For islamic loan their calculation of interest is different
E.g, Ur loan amount 160k , loan tenure 30 years, what islamic loan do is that they upfront calculate the whole 30 years Pricipal + Interest for u perhaps total up together is RM 250k ++ and u pay it up montly following the schedule. As what i know Islamic Loan do not allow for extra / prepayment. Perhaps the flexi 1 different im not sure.

Yup, that's why some people get shocked when saw the statement.
For Islamic Flexi loan, it's function same like normal Flexi loan, you can dump in and withdraw anytime.
And the Current Account will give some extra interest also. (i know 1 bank have 0.3% to 0.9%, dunno others)

I understand the different way the balance statement is, but for the case if extra prepayment is made, how does it reflect in the statement or more important, is the calculation of outstanding principal amount similar to conventional loan ?

Example,

Loan amount : 150k
Statement amount : 300k (example only, not calculated)
Extra prepayment done on 1st month : 149k

If above was done for a conventional loan, the outstanding balance will be 1k left. How will this be reflected in an Islamic loan ?

Thanks.

I tot under Islamic law, after agreed this much of interest, you cannot change oredi? Even u dump in money, u still have to pay RM240k???

For islamic normal term loan u r not allowed to do any prepayment they wont accept it. For flexi im not sure.

That was the case for the earlier generation of Islamic fix loans, but now with the flexi Islamic loan, not sure how it actually works....

if got prepayment, I tot its against Islamic law???

More info :

http://www.cimbislamic.com/index.php?ch=is...lex&tpt=islamic

For islamic loan, they calculate the maximum payment that you going to pay & write in the loan documents, ie based on capping BLR rate. But your monthly payment will only based on current BFR (BLR equivalent)

I just get my CIMB Flexi Islamic Loan approved.

There is no monthly fee of rm10 unlike the conventional one.
No registration fee.
Maximum interest capped at 10.75%.
Lock period 7 years from first disburstment.
Penalty for early settlement = outstanding balance x 3.25% x years remaining in lock in period.

This post has been edited by GHz: Apr 9 2009, 07:55 PM

Does this means its not following Islam law already?

WOW! The penalty is alot if you sell early

Wow, that's alot of penalty charge on CIMB Islamic loan.

By the way, For Alliance Bank Islamic Flexi loan.
The penalty is 3% for 1st 3 years, Then next 2 years is 2%
But subject to minimum RM5k.
(This is from one of my client's LO, RM150k loan)

yes it can be a lot but it can be so much less. imagine if your outstanding is only RM1000.

Anyway, the calculation was not stated in the letter offer but the sales girl to me that's how they calculate but I guess this only the maximum penalty. She also told me that actually bank only charge <3% but the penalty can be waive if the buyer also taking loan from CIMB. Also she told the outstanding balance can be adjusted if we choose the the right lawyer. Not so sure how to adjust.

One of the clause in one of the offer letter for Islamic loan.

Quote:
The Bank reserves the right to terminate the Facility in the event the Property is used or occupied for "non-halal" purpose or activities, as determined by the Bank's Shariah Committee at its absolute discretion."

Does it means that for a Chinese, he/she cannot have pork, liquor etc in the house?
If it is for a shop, the shop cannot have a business as a pub, Sport Toto outlet, coffee shop selling beer and pork rice etc?

Yup, even if your income is related with non halal business, they have the right to terminate also.

Omg... thanks for sharing... its a huge drawback to take this product. Since Islamic product doesn't allow prepayment but at the same time offer flexi package...I'm just guessing and trying to understand...maybe it means that if your loan is 160k but your debt will be 240k. Therefore even if you dump in 160k, you still not able to fully settle your loan (remember Shariah law doesn't allow prepayment). Thus you still need to pay the balance of 80k (which is the "profit portion). Since there is no effective prepayment (you still have to pay the interest even if you dump in huge amount of monies), therefore the monies dumped into current account will be given interest because its treated at "advance payment" only, not prepayment.

I'm just guessing... do share with me if i'm wrong.

This is freaking expensive. Let say the lock in period is 5 years, therefore if you refinance your product for a loan size of RM100k on the first year, meaning you need to pay a hefty penalty of RM100X3.25%X5years=RM16.25k !!!!! Conventional product is only 3-5% on loan size or outstanding balance anytime within the lock in period.

I have just been to CIMB bank for a loan too. Their loan packages are very tempting but their rates aren't that good. But most of the banks has their own pro and cons about their packages.

once u take the loan you're liable to the bank selling price which is the total of bank purchase price and the maximum profit the bank will make from you. not very clever. even though they will give a rebate when you pay your monthly installments or settle the loan, they never specify how they will calculate this rebate in their loan documentation. you will also be liable to the bank selling price in the event of a default.

to give u an example : loan of 400k (bank's purchase price) with 10.75% interest cap for 20 years, the bank's selling price will be 1.26million which gives them a profit of 860000. You will get a rebate of 10.75% - (BLR-spread) every time you pay your monthly installments but they never specify this in the loan documentation. if you need to pay it off you pay 3 percent off loan amount. the rest will be given as rebate supposedly but this, again is never stated in the loan document. what is stated in the loan document, however, is that you'll be liable to pay 1.2 mil plus cost of foreclosure in case of default. go figure.