I believe the principle deduction still follow the original tenure deduction amortisation table. The excess money you put in is to offset further the interest charges the following month. If you want to shorten the loan tenure, you might need to go over the counter, and tell the banker, please deposit this xxx amount to reduce the principle.

At least this was what my CIMB banker explained to me last time when he tried to propose me this flexi package.

That was good info if it's true coz this is my 5th yr. I cannot deposit money to reduce my principle. I can only park the money into my current account. I just checked back my previous account statement. Aside from my first month is half the payment, I have a number of months with full payment of financial charges and no deduction on principle when I still have good balance in the account.

Now I'm ok. I should check why too.... Perhaps I'm gonna call the bank again tomolo

So when you said you park ur money into ur current account, does it reduce your interest?

yes.
if I park my money into the current account, my financial charges reduced. however bank uses 5 decimal if u deposit too little money you wont see much difference.

eg if monthly 2000
financial charges 1800
limit reduction 300

if u add few more thousand into the account
financial charges will be perhaps 1500.
limit reduction will then be 500

no matter how monthly will still be 2000. it's a matter of reducing more principal and interest together to pay off the loan faster.

Should u think 2000 a month is too much from rising interest. you can negotiate with the banker to have the amount reduced. but this is not ideal because you will take longer to pay off. unless ur not able to pay the risen interest.
Do ask for hidden charges for I heard from a friend they normally ask u to refinance. Ask for other alternative.

the later is true. no matter how still 2500
for my case is the 1300+1200.
interest been reduced n ur paying the principle more.

it shoukd b like this. That's my case.
also because it go by day rate. if u use the current account more the chances of seeing changes is low. Unless u park tge money there n not use. then the difference is bigger

Meaning to say:
If monthly installment 3000 (2500 + 500) / (interest + principle)

If I park X amount in, the interest will be reduce on daily basis by Principle - X

Hence, if I consistently pump in 3000, distribution should be = ((2500 - Y) + (500 + Z))

Where:
Y = new interest offset by excessive cash on principle reduction
Z = new principle reduction portion from lowered Y, from consistent 3000 installment payment

Is that correct?

i also use cimb flexi loan; but, i started 7 years ago. no need monthly fee.

and my principle reduction is fixed, interest rate is change according to the balance.

so. under the loan contract, i need to pay 1400.

if i pay as the contract schedule, 1000 finical charge (interest) 400 principle reduction.
I did dump all money to the account. the finical charge is 0 and the principle reduction is still 400. (not 1400)

Bingo, mine is like urs, except that I have monthly fee of RM 10

I understand it this way too according to your scenario.

So, to shorten the loan tenure, you have to walk over the counter to dump in the cash into your account to offset the principle.

Or there are 2 version of flexi loan available?

so, for shorten the pay back years... a) fix monthly payment, b) fix reduction limit... at the end is same.
after, says ten years, if you have money, you just pay back all, make a full settlement. both calculation is no different.


advantage in fix reduction limit.
the advantage in fix reduction limit is that you loan account can last longer. (without any cost).
says, if you have money for full loan, you put all in, then 0 interest, the reduction limit just some figures, does not matter.
but, you have the option to draw back the money anytime. if you need any urgent money, you can take it out. (better than make a new personal loan from bank)

disadvantage in fix reduction limit.
the disadvantage in fix reduction limit is that you cannot control the monthly payment.
says, at the beginning, you make a loan, and the fixed monthly payment is 2000. however, due to BLR rising, the financial cost will also rise, may be you need to pay 2500. For someone, they may not able to take out extra 500 for month.


in conclusion, fix reduction limit vs fixed monthly payment. for someone have extra money, fixed reduction limit is good. for someone have very tight monthly budget and no extra money, fixed monthly payment is better.

I have a monthly fee of rm10 too....
not sure of there is two types or not.
mine definately not fix limit reduction.

Any possibility that different years their package changes?
The thing is also not everyone can make full settlement in 10 years... unless the loan amount is small. or the person is very rich.
else monthly fix amount or limit reduction does play a huge role in reducing the paid amount at the end of the day

mine is like that

it seems you are still confused.

simple word, the TOTAL AMOUNT you put in the account for whole loan period, no matter fix limit reduction or fix monthly payment are SAME.

This post has been edited by realcyma: Jan 23 2014, 04:04 PM

which bank still offer refinance up to 35 years?

Hi,

do you receive notice from CIMB which is Current Account Flexi will convert to investment scheme type account?.

Existing account holder will force to change to investment scheme account type to enjoy flexi @ loan balance reducing. The only drawback is investment account NOT COVERED BY PIDM. Anything happens, solely risk on the customer.


OR, customer are giving options to convert to current normal account, BUT this will not entitle customer to enjoy flexi benefit anymore ( in others word, like convert to term loan)

Mine is loan with CIMB, Home Loan Flexi-i

not receiving any letter for flexi loan that without "Islamic"

aiyoo..is it only for islamik?..


anyone from cimb bankers can confirm?..thnks

currently cimb latest has offered me their latest plan, home flexi smart... any recommendation? my LO has been out

cimb flexihome loan is it the best?

everymonth charges rm10.60 for doing nothing.

how to actually reduce principal amount in current acount? im going to counter , and deposit of 1k into reducing principal, but the amount i still can withdraw out, how to make it really cut off my principal amount without let me withdraw the 1k, inorder to reduce interest?

This post has been edited by btan: Feb 15 2017, 05:52 PM