GenX,

I saw your article/blog.

I just submit application for CIMB CC. Hopefully is approved and can get ASAP.

Recently I swiped 30k+ on MBB CC due to emergency, and based on CIMB 0% 6 months or 1% 12 months (without any hidden fees/charges), I plan to do balance transfer to CIMB CC. I already have the cash to settle off MBB CC, but if it is 0% or 1% (and RM50 GST), I can utilise the money on my S&C M1 a/c, where the current BLR-xx% rate is around 4-5% or I can use the 30k cash for short term investment.

By calculate 1% of 30k = 300 + 100 (2 yrs GST)
= RM400 cost+interest

If I put the 30k in M1 a/c, at 4.5% interest
= RM1,350 interest charge for 1 year

Net: I save RM950

Is my calculation correct ?

Thanks

My outstanding amount is still >100k and every month, I dump in X amount to cover more than the monthly installment.
Which means the 30k is consider as "Fixed Deposit", but FD earns me ~3% only, whereas house loan interest is eating me 4.5-5.5%

Gen-X,

Agree. However, CIMB CC is charging me 1%, while Stanchart Mortgage-1 (home loan) is charging me BLR-xx% = ~4.5%
Hence, the interest that can save in short term 6-12 months.

OT again:

M1 is similiar like other banks flexi-payment, where you can dump in more money on top of the installment. The additional money will offset the interest chargeable on that amount. When you want to use the money, you can withdraw out the additional money that is dumped in.

e.g. If monthly installment is 1.5k and I dump in 2k monthly for 12 months. After 12 months, I can withdraw out the 500x12 = RM6k if I need to use it urgently. If not, I can leave the money there, and my loan will reduce by 6k.

The good thing about M1 is there is no limit on deposit/withdraw and the effect is immediate. I can even bank in RM10 or way over the loan amount through S&C Cash/Cheque deposit machine. I can withdraw RM10 or higher from ATM or write a cheque. No hidden fees/charges, except RM10 monthly. Other banks have limit as minimum deposit/withdrawal, charges per transaction, takes 1-2 weeks time, need to fill up form, etc.

OOT again:

Gen-X,

It is not OD. OD is additional loan that can use. The M1 amount that can withdraw, is ONLY the additional (on top of the monthly installment) that is deposited previously.

Already faxed CC application to CIMB. Pending CIMB response

Correct.

Based on my daily-rest interest calculation @4.5%, you will save 6.164383 per day, which works out to interest of RM184.93 per month (30 days)
Annual (daily-rest, monthly compounded) = you need to pay RM2254.58 interest (not yet calculate the monthly-compounded interest) if you do not put in the 50k

If your 50k put in FD @3%, you only get RM1,500

But you still lose out extra interest paid for the homeloan if you put in FD
1500 - 2254 = -RM754

Therefore, my principle is, unless my savings/investment can return higher than my BLR-xx% , it is better for me to put all the spare/liquid money in M1 to reduce the loan+interest.

BTW, I'm not promoting M1 or related to them in any way. I did in fact face some trouble with them and escalate till BNM (posted in LYN forum before, go search). I just feel the flexibility of the package suits me fine, although the RM10/mth is

Go figure, in a year:

You put in 50k @3% in FD = you get RM1,500

But bank loan charge you @4.5% = you pay interest of RM2,254

Nett: You still lose RM754+

------------------------------

There is something else I do, which can only be done if both sides are trustable.

My siblings has 50k in FD (which does not want to risk elsewhere), instead of put in bank earn FD @3% (or lower) , I offer 3.5% to put the 50k in my M1. I write several non-dated cheques (10k + 10k + 30k) that can withdraw anytime. At the end of 12 months, I pay RM1750 and re-calculate the FD % rate for subsequent 12 months.

For the 50k in my M1, I manage to save paying RM2,254 on interest. Which works out to:
(i) I save extra RM500 on home loan interest, rather than pay to bank.
(ii) My siblings earn extra 0.5% from the "FD" (RM250)

Win-win situation for us . Bank = lose

Imagine if 100k, 200k, etc.

Sorry for OOT again. Please don't warn/ban me

Can. I just did that. Steps:

(1) 20+ Apr 2011 Fax in new CIMB CC application.
(2) Early May CC approved and received card by PosLaju. (<2 weeks)
(3) 4 May Fax in BT form
(4) 6 May BT Approved (2 working days)
(5) 10 May BT paid out (another 2 working days)

Of course lah

CIMB BT, will they snail-mail the statement to us ? Or have to guess/check online (how to check?)

... you will have black-list record in CCRIS (BNM), and this will affect your future loan/credit application (e.g. credit card, house loan, car loan, personal loan).

I suggest, at least pay the minimum payment.

Can BT a BT ???

I just BT from MBB-CC to CIMB-BT recently (6 months 0%)

Does this mean, i pay the 6 months CIMB-BT every month.
Then I can BT the remaining CIMB-BT back to my MBB-BT (12 months 0%) ???

Yes, CIMB send me snail mail on approved. Later another snail mail on the payment/amount.

I do not think why they offer such package.

For me, I use the BT and paid RM50 GST for a new CC from CIMB.

Just to make simple calculation, excluding those monthly payment, daily-rest interest, etc.

Let's say I BT 10k for 6 months 0%
The 10k I put into my flexi house loan, let's say BLR-xx = 5% (rounded up, simpler calculation to show here).

Interest saved from housing loan
= (6 / 12 months) x 5% x 10k
= RM250 saved.

Net savings
= 250 - 50 GST
= RM200 saved.

I can come up with the exact figures if you need it, but a bit busy right now.

e.g. You have flexi house loan and also 10k cash to pay off the CC.
So you transfer the 10k cash to your flexi HL, let's say BLR-xx = 5% . Which means you save rm500 for 1 year.
Then you BT the CC 10k to 12 mths 0% interest. Every mth pay RM834 (x12 = 10k p.a.) from your monthly salary.

Now, do you see how you can save rm500 (5%) interest ?
Even if you put the 10k cash in FD, you still get ~3% interest.

Just to add, it does not mean BT 10k CC, and your CC free up 10k CL to spend for Hari Raya new furniture, fittings, clothes, etc.

Note: above is just using simple calculations, and not on daily-rest, monthly compounded, etc.

This post has been edited by cute_boboi: Aug 10 2011, 03:52 PM

^^
^^
Yeah, I'm just giving a rough count (as not to come out with exact figures and calculation method that is too deep/confusing)

Your point of adding the 17.5% CC interest is good also.

MBB is very strict to me. ~3x salary, even after negotiating.
CIMB gives me 5x on my first application.
Few years back, HSBC gives me pre-approved at 3x also.

Insufficient CR is not good excuse. If the bank thinks your credit risk is high, they won't offer any higher limit to you.

I think same here. My CIMB BT (settled) was not in CIMB Clicks online login anymore
But a new MBB-to-CIMB BT, still not shown in Clicks yet

~2 weeks ago. Faxed in. CIMB already approved and made full payment to MBB. But CIMB not yet inform me when to start the first BT installment for this case.

Yes, 0% for X months is really no extra or hidden charge. But make sure you pay that full amount and on time, every month.

But it is applicable to:
CIMB - 6 months
MBB - 12 months

If you choose other periods/months, there maybe some charges. Read the fine print T&C properly.