it is the accumulated interest to be charged on your account during the first day of the following month. because interest is calculated daily, you will see the change in amount everyday. try to pump additional Rm5000 one day and on the next day you will see lower interest being added to the "accrued interest" amount

the water gate open already

8000k.... must be an istana

During computation of interest, your outstanding balance will be reduced according to the advance payment that you have deposited.

So interest is saved immediately

let me stress again, semi flexi and fully flexi is not only based on the difference on the withdrawal/redrawal part.

OCBC home loan is neither semi or fully flexi. It is a flexi package.

semi flexi package typically has these features:
1) requires you to phone in to indicate the extra payment as early settlement of advance payments
2) if you fail to indicate, you will be charged 1% (some banks do this afaik)
3) if you indicate advance payment, no additional interest is saved as "advance" payment will only be credited to your loan account when it reaches your cycle date, so it is plain advance payments. and must be in multiple of your monthly payment.
4) For redrawable prepayments, you need to indicate separately and Redraw charge of RM50 is imposed (M*B charge Rm25)

full flexi:
1) current account tied to loan account
2) auto debit from current account at month end and interest is calculated based on outstanding balance minus amount in current account
3) maintenance charge of RM10 per month
4) setup/ processing fee of Rm200

OCBC home loan:
1) no need to call in whatsoever, all extra payments (of any amount) will go into your loan account and interest is saved immediately (exactly like fully flexi loans). you may pay 2/3 months in advance, no issue
2) no maintenance/ setup/ processing fee (you'll save a lot, brother...)
3) for redrawable prepayments, you can pump in cheque or direct over the counter.
4) Rm10 is charged for each redrawal and T+3 days processing time

In conclusion, everything in OCBC home loan is same as flexi loan, except for the redraw part and cheque book facility.

** To Chris Chew, yeah, absolutely interest is saved immediately... trust me... i am the expert...

It's not a reduction in principal balance, but who cares? Interest computation wise, it is going to be:

(Principal balance - Advance payment) * interest rate * no of days/ 365

** but bear in mind, if your package is "service interest during construction period", please DO NOT pay anything extra, it wont help you save anything because there is no principal deduction as yet.

Anyhow, those amount will go into advance interest payment (But do we really need to pay the bank interest in advance?)

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Added on July 29, 2012, 1:29 pmAbout the cheque deposit, there would be a cheque deposit slip.

on the bottom left, there are a few options for you:

1) installment
2) capital repayment
3) early settlement

*for capital repayment it must be in multiple of rm1000 with minimum payment of RM1000

This post has been edited by kok_pun: Jul 29 2012, 01:29 PM

not sure bro... that is a good question...

do you know mostly other financial institution do a 30 days per 360-day calendar year?

so if you take ocbc loan, it's 30/365 and you save more each month

ask the respective bank's call center (not the banker) 2 things:

1) advance payment (not capital repayment), are they contributing to interest saving? Do i need to indicate it as early settlement?
2) how much is the redraw charge for capital repayment?

it helps you to compare

scoring is something that will always be hidden from the field force.
btw, as a member of the field force, i was informed that it will take full loan repayment amount as your commitment

advanced instalment cannot be re-drawn

capital repayment can be re-drawn

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Added on September 10, 2012, 12:42 amCorrection for you, capital repayment will not shorten the loan tenure.

advanced installment, by the namesake, is advanced future repayments, you may use that to reduce outstanding balance, but to shorten loan tenure, you should be doing early settlements.

btw, afaik, by the book, advanced installments mean you need not to pay for a certain time frame as long as you have extra credits with the bank; on the other hand, after early settlement, you would need to serve your monthly installments as well

This post has been edited by kok_pun: Sep 10 2012, 12:42 AM

for interest calculation, yes you are correct! it will use outstanding balance minus whatever amount of capital repayment to calculate the interest.

Money parked under capital repayment is not directly used to reduce loan outstanding because there is an option to re-draw

just like any other banks, under flexi loans, say you have 100k outstanding and 50k deposit in current account. If you wish to refinance from this bank to OCBC, your redemption letter will state 100k instead of 50k.

I might sound a bit like a geek here, but if you play by the book, it is not directly settlement of loan outstanding, it is just a temporary direct reduction for interest calculation only.

say you pay rm1000 per month, rm800 is for interest, rm200 is for principal repayment.

if you deposit additional rm20000 to capital repayment, your installment would still be rm1000, but your interest might be rm700 and you principal repayment will become rm300.then your outstanding balance will be reduced and you would save more on interest in future. (snow ball effect)

yes, there is an option to 'early settlement' part of the loan. but my advice to you is just pay more to your home loan. it will automatically be converted to advanced payment.

refinance is a completely different story. If you are talking about re-draw of capital repayment money, the bank will charge rm10

actually only redraw method is different, interest saving would be the same