Let say my monthly loan repayment amount is RM 1,000.

Then, this month, I have extra money and decided to pay RM 1,500 instead of RM 1,000.

Then, the following month, I found that I am short of money. Can I just pay RM 500 (since I have paid extra RM 500 in the previous month)?

Nope. Unfortunately the loan scheme doesn't work like that. It will still count as not settled.... Best way is to set aside surplus money and top it up to cover any shortage in loan payment..

for full flexi loan, you just need to topup rm500 as previous month you have already paid extra rm500

Yes u can.

For HP loan I am not so sure.

But if you talking about mortgage, you can do that. As the RM500 extra you paid the previous month will record in the system as advance payment. It will be deducted accordingly when comes the proper month

Disadvantage: You do not really save any interest, as the principal amount is not deducted. So manage your money wisely is the best.

yupe u can.. under full flexi .. but it still depends on what kinda loan u did apply ?
if for conservative loan... nope.. don think so

pai. u sure? which bank.
they wont charge u extra interest on unpaid amount?

Yes, even for conventional loan.
To explain, for conventional loan - additional payment is taken as advance payment. Thus meaning to say you just need to top up the difference. Understand the difference between "prepayment" vs "advance payment".

Prepayment is for flexi loan where the extra payment is used to offset the principal thus you are being charged lower interest.

Advance payment is like the term, advance. The extra money is parked there not doing anything unless when you're short, it would use it to cover. Same like paying your normal utility bills.

So to your question - the answer is yes.


Further information - for conventional loan, you can also do prepayment. However it usually comes with certain conditions, i.e. there would usually be a minimal amount you should pay and it is only upon formal request. Why the hassle, it's because they would need to recalculate the remaining tenure or installment depending on what you want to do with the prepayment. i.e. whether you want to shorten the tenure or still pay the same tenure but with lesser installment amount.

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Added on April 21, 2010, 10:13 pmHP works the same way as conventional mortgage plan. I meant the installment paying part


This post has been edited by b00n: Apr 21 2010, 10:13 PM

Sorry to hijack the thread but are there any hire-purchase loans that allow prepayment? A flexi HP loan maybe?

Advance payment = yes. Prepayment = no.

can, at least for RHB, they open 1 saving account for me..i put $ inside can reduce house loan interest.
Each due date they will deduct installment amount only, however remaining money inside the saving account will still reduce interest for my house loan.\

if you can understand lol..not sure how to explain it..

You are on flexi loan and not conventional loan. That's why the additional money you parked there is considered as prepayment instead of advance payment.

hmm..i noob lol..
btw, flexi loan means if interest rate increase my installment also increase ?
even the letter wrote rm700 each installment ?

blur blur lol

i believe ... even conventional loan.. it is the same thing too.. unless u are taking the one with fixed rate.

so when interest rate hike from the initial rate when u sign the contract (eg 5.8 %) to 9.8 %
normally the next month of the changes.. the total loan will be changed based on the current market value...if u have BLR - 1.8

the next month u will need to pay interest of 9.8-1.8 = 8.0 %
and it depends on how the changes is to be done based on each bank's agreement there )

correct me if i m wrong

hey, read this thread: http://forum.lowyat.net/index.php?showtopic=1376014&hl=

yes u can