No point clarifying / helping some folks.
Like i said, Supersound & Sniperz deserve each other.

I've learned long ago about bringing cows to water Vs getting cows to drink

why no more people advertise?
maybe their posting kena removed and kena suspended before for doing advertisement in here?

How about borrow money from relatives/friends?

The amount is about 15k.
If he can save about 3k per month, it will be about 5 months. If he can borrow from money from his parents/relatives/siblings/friends.
If he can save about 2k per month, it will be about 7.5 months.

Eg, borrow 15k from them, then if want to give them interest to persuade them to part the money, maybe can offer 5% .. this will be about RM750. and said pay them by installment. The %, he can always discuss with them. at least better than personal loan at 11%.


I'm do not know if withdraw from hse loan acc after direct debit is possible, maybe the experts here can let us know, if this is possible.

Good day dear,

If your friend has credit card facilities, why don't ask him take up a cash on call/dial for cash or balance transfer to settle his personal loan. Well at least the interest is between 4% - 9%, depending on risk level in the bank. 15k is not a big limit though, easy to settle

15K should be ok to clear debt. Hopefully he can invest on savings plan , trust plans or salary (3K at least) to clear it I guess.

This post has been edited by sniperz: May 4 2016, 10:44 PM

but TS mentioned his friend personal loan has a 11% interest rate. If he do a balance transfer /cash on call via credit card, it will be about 4-9% and also got processing/admin fee if not mistaken.

9% and 11% not much difference.

i agreed that 15k is not a big limit. However, depends also on his friend's salary/income. If his friend able to save 2k to 3k per mth, he just need about 5-7.5 mths to clear.

If he can borrow from his relatives/friends/parents, by offering 3-5% for them, and at the same time nego to pay back in installment... this way not just can help his friend reduce/clear in few mths time, but also able to keep his epf intact. This is because his friend do not know about investment, and finds it complicated. Therefore, in this case, is better to keep the money in epf.

15k to some ppl is no big deal, but to some ppl it maybe a big deal... so it depends on various factors that TS's friend only knows.

political stance vs. investment behaviour ... interesting concept.

parking sini dulu. *makan popcorn*

wongmunkeong, Ramjade, dasecret, and OTHER Forummers if possible.....
feeding will prolong their stays......
thks

This post has been edited by MUM: May 4 2016, 11:35 PM


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Just digged more info.

His personal loan repayment tenure is 60 months, just serviced 18 months so far.

The first time I talked to him, I already suggested him to apply credit card, apparently he has no credit card. Reason is that, credit card can be served as emergency due to his wife is delivering soon.

Borrow from people around is not an option, personal complication.

His DSR over net income now is at 73%, and not possible to save 1K per month, so you get the idea of his salary range.

And yes, 9 and 11% has not much difference, one could just borrow money from future self via EPF.

It depends on the rate bank offering to his friends. I was working in a foreign bank as a customer service + telemarketing executive. The bank does offer in flat rate of 4% and above for BT and Dial For Cash (DFC). But still, depending on your profile and other factor to obtain such rate.

Just my perspective, 1% processing fee (comes along with 6% GST) is way more better than 11% interest p.a charged on 15k. Of course, is up to his friend's decision whether how he should save up interest. Just my 2 cent. Peace yo

This post has been edited by ngph988: May 5 2016, 12:37 AM

Dear,

your friend has long way to go. Imagine 11% per annum thus total interest repayment over 60 months is 55%. You can advise friend to take up credit card and settle his personal loan via dial for cash/balance transfer. I would say that will save up a lot of interest over 5 years repayment. Feel free to pm me if you need more guidance. Peace

Almost every sentence you wrote raises a red flag.

If you thiink 11% is high, I would imagine him paying from 12% to 18% with a credit card.

And how to get money out of EPF... except maybe using fradulent documents... if there was any easy loophole, it would have been abused by many people ages ago, and already closed. So let's not waste time on non-solutions...

It might be high time to face reality that he could be living beyond his salary and financial status... for example, if can't afford to have medical care in a private facilty, then the option is public hospital.

With the high DSR, talking of making some interest savings by changing from one loan to another can be extraneous. Banks would assess the credit risk of the individual and charges the interest accordingly. So we can't simply say that if we were offered an interest rate of x% from Bank A, your friend could save some money by having a lower interest loan by switching to Bank A.

Anyway, the best time to think about making any interest savings was before and during the application of the loan. After making the decision to take any loan, it is already clear how much we have pay in installments every month, and more important, whether we can cover the installments and other bills and expenses from our salary.

What would throw a spanner into the monthly budget is extraodinary or unexpected expenses in some months, thereby missing some payments and incurring late payment penalties and maybe, due to these late payments, the bank increases the interest rate.

If this is what your friend is facing, not able to make ends meet in some months, then maybe the better option is to approach AKPK for assistance... https://www.akpk.org.my/

(See also the AKPK thread in this forum for further info and queries...)

I think AKPK is last resort for his friend. Hopefully his friend does not need to come across to this situation.

This post has been edited by ngph988: May 5 2016, 12:34 PM

I would not suggest him to loan from credit card, and as I mentioned, it is for emergency and indeed, he already chose public hospital since the first day. Bank might or might not approve his CC application but I told him to apply from two banks, just in case.

EPF, if you refer early posts, the discussion was started, as can he apply EPF account 2, so that the money can be deposited into his semi-flexi HL account, and further withdraw out to settle his personal loan. His personal loan tenure is freaking long when the first time I heard it. If it is workable, use the money that supposed to pay personal loan for investment or deposit back into EPF, to less jeopardize his retirement fund. Nothing fradulent here, the question is always, will bank lock the money from EPF, and do not treat that as semi-flexi fund.

He told me he did pay all on time, thus, maybe credit rating is not that bad.

AKPK is the last resort, he is not at the point, into a forever blackhole yet, just not worth to pay so much interest.

First, I would like to point out that all the long posts were my point of view and 2 cents in this open forum and may digress from your queries... if they are not helpful to you, then hopefully other readers may gain something out of the post.

You maybe using your cc wisely, but your friend in his financially stressed situation might not.... and similarly with taking out of EPF account 2 to supplement the monthly budget might work for you but might not work for him, if his monthly budget is out of control.

We have to differentiate between long term savings and short term savings. EPF is long term savings for retirement. If one has no discipline to control his/her monthly expenditure and make ends meet, and have very little savings or none, at least hopefully he/she got his/her long savings (such as EPF) under control.

Account 2 is 30% of the total contribution into EPF, and 30% is quite a high portion... the growth of EPF savings is not only depended on the monthly contribution, but also dependent on the yearly dividend... in the long term of many years and decades, it is the compounding of the dividends that is the main contribution to the growth and major portion of the savings at retirement.

Fiddle with the withdrawals and reducing Account 2, especially in the early stage of one's life, will lessen the compounding effect... a vast difference in the final amount of savings could be the result of these early withdrawals.

(Putting the earlier withdrawn money back into EPF years latter... losses out the dividend and compounding effect.)

(So what's the fine balancing line between earlier withdrawals and larger retirement savings? Not easy to answer... but if I'm not acting prudently in my short term (monthly) financial matters and have no discipline to live within my salary, I'll be very afraid to touch my EPF savings. I may screwed up in the former, but if I screwed up in the latter too, gone case la...)

Without fully knowing how dire is the financial situation the other person is facing, and his financial means and non-discretionary expenses, and financial acumen (which in this case, hardly any since he is in financial stress), I would be cautious in suggesting band-aid solutions and then keeping finger-crossed that he will learn and change his financial behaviour for the better... and hopefully you too be cautious in your advices to your friend; otherwise you could be doing more harm than good.

================

"... the question is always, will bank lock the money from EPF, and do not treat that as semi-flexi fund."
The EPF website has further info on monthly withdrawals to supplement the monthly housing installments... how to apply, etc... the question of whether the bank lock the money is irrelevant; you pay a lesser amount on the installment, and EPF helps pay the remaining portion.

By the way the question was phrased, any newbie to flexi-loan could mistakenly assumed that whatever amount of money we put into the flexi or semi-flexi could be withdrawn. It is actually the extra money that is above the required monthly installment that can be withdrawn.

The main problem is, I think, that there is confusion on how the bank will treats the extra money - a) as advance payment into future installments, or b) a standby sum to contra outstanding balance and interest charged which can be withdrawn.

As said, the EPF monthly withdrawals are to supplement the monthly installments...

This post has been edited by j.passing.by: May 5 2016, 02:43 PM

The consideration here is EPF "Reduce/Redeem Housing Loan Balance" (can only be done once a year), not ""Housing Loan Monthly Instalment Withdrawal".

In my planned advice, I understand that it is about extra money (that offset principal) on top of minimum monthly repayment, in semi or full flexi loan. On the bank side issue, we can always call up bank to confirm, but the EPF side is a bit tricky.

He is not the person that in financial stress, but lack of backup fund. Discipline on putting the money back to EPF is always a concern. If executed properly, getting rid of 11% personal loan is still better than 6% EPF?

I am taking really cautious step before giving out of advices, thus just share my thoughts here.

This post has been edited by engtat: May 5 2016, 03:18 PM

I wish you luck in finding the loophole (in getting cash)... and find it fast as it may be closing soon if this loophole is known publicly in forums.

I think you are too focus on savings interest. As said in the 1st post, the goose is cooked - when he had taken the loan because he needed a loan to cover whatever financial shortfall he was facing.

The bulk of the total cost of interest are charged and are paid in the first portion of the tenure.

When your friend took on the loan, he has had most likely got the best deal he could get from the bank... and since he had already paid a portion of the loan, the best value for his money is to continue the loan as scheduled.

There could be hardly any difference in interest savings in terminating the loan early by fully paying its outstanding balance - whether the money is from another loan or EPF.

The main difference from getting own money (out of EPF or other sources) and getting money from CC or another other loan is that in the former method, there is no more monthly installment or one installment lesser to pay - and thus have some breathing room in making ends meet.

Reducing the outstanding balance does not necessary means reducing the monthly installment... it is more likely to reduce the tenure and ends the housing loan earlier.

I would be carefull in fully redeeming the loan... a) housing loan is usually the cheapest loan, and not likely to have any interest savings but a lost by pulling own money elsewhere to redeem it; and b) ending a housing loan has legal costs as in transferring the title from the bank back to the owner, and one should be prepared to pay it which can be a tidy amount.

BTW how do we defined 'financial stress'? To me, speaking about it a friend to seek help is one of the symptoms...

If this is the case, there is nothing much your friend can do, except continue to pay the installment.
Just like what j.passing.by mentioned, i don't suggest using epf (even if this method is possible).

If he can't cope with the installment, then maybe he can approach AKPK to get advice.

Quick one before I go work. As explain by j.passing.by, most of the interest on the personal loan would have already been paid upfront. This is due to rule of 78. Google this and you will know why

So the actual savings that your friend will get by doing early settlement of loan may not be at all beneficial compared to foregoing epf future interest.

-deleted-

This post has been edited by nexona88: May 6 2016, 11:16 PM