Wow, thanks for taking it one step further I guess in general, most ppl don't even bother to look beyond the surface. Also, we mustn't forget that inflation is another factor that is often overlooked when taking loans. Sure, when you look at effective interest rates you will balk, but if you factor in annual inflation, you will find that by putting in so much into a depreciating liability you are compounding the loss for the future. RM30,000 today is worth more than RM30,000 in 3 yrs time. If that money could be invested to counter the effects of inflation, then that would be the smartest move.

I made a similar calculation a while ago in my own thread, just to illustrate a point, and to stop people from looking at 9yr loans as if they were a major loss making venture. Once the numbers are revealed, many of the advocates of short loans are silenced; they didn't really take that one more step to look at the reality, which in the best sense of the word is called "penny pinching"...

Definitely, if you can put that money aside in say, some investment linked fund or maybe to fund a new home for investment, that is always better than placing all your hard earned cash in a depreciating liability.

And yes, having some extra funds for a rainy day is good too...