Currently, I am holding a Semi flexi loan with Public Bank. I read here, saiding Full flexi loan save more interest.

1) How Can I change my Semi Flexi loan to Full Flexi loan ? (lock in period still left 1+ year)... Any charges ?

2) Since Full Flexi loan is linked to current account. Can my salary be bank in into that current account?

3) So, I don't need to pay the loan amount as long as got money in current account ? (I mean it will deduct directly from my current account, right ?).

4) I can pay extra amount to semi Flexi loan via counter to reduce principal amount . Is it the same with FULLY Flexi ?

[5) Current account withdraw by issuing cheque... Can current account use to pay bill / credit card/ e-payment ?

5) Advantage & disadvantage of both Semi flexi VS Full flexi loan.

Thanks a lot. I am just learning with small capital from taiko here , trying my best to minimize the interest.

Just wonder WHY THE BANKER SO STRONGLY RECOMMEND SEMI FLEXI LOAN tht time ( a friend) ?

This post has been edited by Irresistible: Jun 18 2014, 10:58 PM

If you don't fully utilize the function of the flexi loan, sometimes semi flexi will be better.

flexi loan doesn't 100% better then semi flexi.

My advise, wait for the lock in period end and refinance to others bank with lower interest rate.

It's not worth for all the penalty to change to flexi loan and you can't save many in short period. Except you have big chunk of rolling cash in hand that frequently need to take in and out like running a business. Or else you can just dump your extra cash to semi flexi loan and you will still save the same interest.

The only different between Semi and full flexi is the easy of taking money out.

flexi loan calculate interest by deducting total money in account, hence when you over pay monthly your interest will be lower when compare to conventional.

money you put in however is difficult to be taken out. for flexi, you have to inform bank and seek approval before you can take money out (usually 1 week to 1 month notice + processing fees RM10/RM50), for full flexi you used it like a current account, you can withdraw any time via cheque book, no notice is required. you however have to pay account maintenance of RM10 per month.

what people do with full flexi is to put all their income source into the loan account, hence daily interest become much lower with all the money inside, they used the account like a current account. this is better in comparison to FD which only give you 3%, you effectively save 4.2% of interest. Money wise you don't get anything, you gain saving from interest bleeding out.

Both share the same daily interest calculation, but full flexi will charge rm10 as arrest fee for every month but semi dont have. Any extra money put in full flexi will automatically offset the interest based on remaining principle amount. But for semi, you have to called up bank to transfer any of your extra money in saving acc to you loan acc so that interest can be re-calculate. Withdrawal for Full flexi is easy and immediate, but semi flexi, you have to call up bank again to transfer out which you have to wait certain days and certain minimum amount. Overall, they are the same, just the RM 10 every month differentiate them. Rule of thumb, choose full flexi for one loan and remaining loans to be semi flexi.

For public bank, need go to branch to pay principal or take out the money

Public Bank Home Save is a fully flexible home loan, part of the "5 Home Plan", that can be used to buy residential and commercial properties, whether completed or under-construction. If you only wish to borrow a modest amount you're flat out of luck - this loan is only applicable for loans RM150000 and above.

A higher margin of financing up to 100% including MRTA and legal fees is available, but will have to further consult the bank. However much you need to borrow you'll get a free credit card and RM10000 of personal accident coverage free for the first year - that's a nice bonus.

+ 1 to ur answer

at point 3, does this apply to both semi flexi and full flexi loan?

4) Advantage of semi flexi often i see from public bank last time few years ago is they offer more attractive rate compare with flexi loan. Now maybe about the same i am not sure. Majority bank now offer semi flexi and flexi about the same rate. Few years ago, public bank did always offer slight better rate as compare to others, after I check it up, it is actually semi flexi. If you foresee yourself can dump in substantial amout of money in the loan account, then flexi is better even rate lower depend on how substantial amount of money you going to dump in. Otherwise semi flexi better with better rate.

If the rate is about the same when u apply loan, then your friend is not giving you the best advise maybe he or she will get some advantage if you sin semi flexi loan?

always take flexi whenever possible... RM10 a month is nothing compared to the flexibility you get...

1. no need to click or standing instruction to pay the monthly installment
2. RM10 @ 4.2% p.a., you only need RM3000 and it is already equivalent to RM10 interest. (RM3000 x 4.2% / 12 = RM10.50)
3. All the EPF withdrawal, bonus, "under table money" , angpow money, MBf (Mak Bapak finance) etc... can dump in and use later.
4. Annual increment - your pay won't stay stagnant for 30 years right?
5. Withdraw only what you need for the next 3-5 days.. no point keeping so much money in wallet, keep it in the loan acc... it saves you interest! Pay your credit card and other bills (if they don't charge interest, pay later) only on the due dates.

with this, your loan tenure will be shorten to half.

*** Disclaimer ***
The above statement is only an advise, it is the writer's personal opinion only.
****************

someone never took a semi flexi loan before thought need to click to pay or make standing instruction. Its also auto revert. know nothing but put disclaimer to advise, great.

I'm not sure about all banks but I did sign a standing instruction form for my semi-flexi loan for my 3rd house. I took semi because it is my 3rd loan and it offers no lock in and I only pay progressive interest, so I don't need full flexi for this one.

for public bank semi flexi, in letter of offer, must do standing instruction (can deduct from saving or current account)

This post has been edited by beyond86: Jun 18 2014, 02:02 PM

Well, if you put the RM3000 into semi flexi, you save RM10.50 interest. For full flexi, you are offset the monthly RM10 charges + you save RM0.50 interest.

Would it make difference when it comes to semi and full flexi of Islamic loan?!

I have one semi Islamic loan with Maybank, u cannot put in the full amount as per the loan figure, if u do so, will consider fully settled even no instruction given. They said this is their practice for this. Your figure banked in must not be the loan amount, but can be less. U guys face this matter b4?!

Islamic loan do not have lock in period

wow... thanks for asking this question... now it clears my doubts..

you want to try their no lock in period ?

they will just reverse engineer/calculate the 2%-3% penalty out and call it processing fees.

any rate that is BLR - XX% is deemed as special pricing.

Islamic Banks that also structure similar "special pricing" for Islamic home financing. When the customer early settled within special pricing period, the Bank will give lower rebate amount to cover the differences similar to conventional banking. However, action of the Islamic Bank can be considered as non Syariah compliant, if in providing the rebate, it shows the customer the amount recouped on paper (in trying to be transparent) which can be considered as additional amount or can be tantamount to "riba"*5. This is one shariah issue that need to be resolved.

As for rebate formula, BNM has set rule that Islamic Bank can provide rebate under "Unilateral Promise Principle of Wa'ad") and if such promise is provided for by the Islamic Bank, it has to stipulate the rebate formula to avoid future conflict.

Dont quite get it.... u mean paying Rm 3000 to the loan account ? But, flexi is just putting Rm 3000 in current account and u can use it..

if not semi flexi.. just normal housing loan.. can not redraw at all.. if let said i have extra 100k to pump in.. is it straight away deduct the principle? or do i need to ask them to deduct?