1. Professionally, I do not think it matters at all. There will be differences in your service though. Larger banks, as you are aware, have more branches across the country, but with cheap IBG (11 cents) and your salary being credited in a perticular bank account that you may have no choice of, does it really matter which bank you took your loans from?

2. BR is calculated by the banks' cost of funds. Money that banks lend you is actually borrowered from Bank Negara, and the banks themselves get charged by the BNM (called OPR), and the banks also have to pay their depositors dividends and returns. Due to these differences in costs, the each bank would have different cost of funds, which is reflected by the BR, which changes every 3 months.

Banks then would use this BR and add a spread, for their profit. Does it really matter to us which bank to choose from based on their BR? I cant say for sure. This BR thing has just started this year, and it has only been 3 quarters for each bank to change their BR, some did, others didn't

3. All my muslim clients take Islamic loans. It has all the pros and almost no cons, and the tenure, rate, MOF are all the same as the conventional loans:

a) No lock in period
b) Capping of interest rate (i.e 10%)


Answered above. In my professional opinion, what matters the most is that you are comfortable with the level of service the bank you are taking a loan from. Secondly, the effective interest rate of that particular bank. DOnt concern yourself with the BR as you have no control over them.

This post has been edited by wild_card_my: Oct 24 2015, 08:15 PM

You mean they tightened it up? I am not too aware of any lock-in period policies, since I encourage all my clients to do Islamic loans.

But thanks for sharing that useful warning.. not too aware that there may be changes. So you are saying that it used to be that the lock-in period starts from the date of execution... but now some banks changed it to the date of full drawdown (about the time you receive your keys)... is that it?

I see, yes you are right, that means the banks have relaxed on the rule then... i guess it could be due to the competition from the islamic financing which has no lock-in periods. WHy do you need a lock-in period anyway, you have already earned the interests in the first few years since the money was disbursed.. The lawyer fees for the loan agreement is also paid by the client... so why the lock-in periods?