Hi all,

I have a full flexi account with some money deposit inside. My house is under construction and i have been servicing my house interest and find it every month burning money by servicing interest just like that. So i talk to my bank to do early installment, so that i can start paying installment instead of burning interest.

But the way the bank explain to me is it wont make a lot of difference since my account is full flexi, and my current deposit already deducted some of the interest. Even though i start early for installment repayment, its just like deducting more from my account, but the interest saving is the same.

Can anyone enlighten my is it true? i thought start paying installment early better than start late, or it make no difference?

Thanks.

your early installment means every month you put your scheduled monthly installment into your full flexi current account right?

it would help a bit but it won't help much unless you put a lump sum of money into your full flexi current account.
let's say your loan size is 500k, you put 200k inside and the interest charge base on 300k only
but if you only put monthly installment into it , like 2500 then the interest charge base on 497500 which is hardly to save up any

but now you are servicing your interest while waiting your house to complete so it depends on the progress of your house currently. If your house situated at lower floor then the interest you need to service is getting more. If at higher floor then the interest still lesser.

If you are having the true full flexi account, it works very simple.

You just need to dump in the amount of money into your account that is same to the amount bank pay to developer, then no interest charge shall incur. Depending on the bank, there may have some additional maintenance charges (RM 10 per month for example).

Let say bank pay RM 50k to the developer, and you put RM 50k into the account, then you do not need to serve any interest.

If let say bank pay RM 50k to the developer while you only put RM 20k into the account, RM 30k will be subject to interest and will be automatically deducted from the RM 20k you put in.

There is no need to start the installment officially with the bank early, you can just every month put in the installment amount by yourself into your flexi account and definately it will reduce the interest.

The principle for full flexi account is simple and straightforward, they only charge interest on the outstanding amount. The higher outstanding you have, the higher interest you need to pay.

Hi, Does the above principle apply to semi flexi loan? I planned to do so for my flexi loan with Hong Leong bank (i.e. to dump one lumpsum payment for the full amount bank has disbursed to the developer). Appreciate your advice.

Thanks in advance.

also have to clarify with bank if they have a minimum interest that will be charged. CIMB has this clause.

Thanks for the reply. my point is by start paying installment early, there will be some portion will go to the principal which will reduce the principal. Unlike now keep servicing interest but my principal owed to the bank still the same.

So because it is a full flexi account, will it make a different if i start paying installment early vs start late (after bank disburse all the money)? at least there is some interest saving by starting early?

Thanks very much

In principle, semi-flexi suppose to be the same, the difference only on the mechanism of withdrawal of excess cash in the account is different.

Nonetheless, I found that semi-flexi account nowadays vary from one bank to another and may have their own rules and regulations, so I am not sure if full flexi loan pricinple still apply to semi-flexi loan.

Can you clarify more on this?

IIRC it was during the early stage of constrction.

Developer claim 50k so I put 50k into the account. I was charged a minium interest.

They have a minimum amount to be charged as interest even tho you dont owe them that much.

but my loan was 2013. not sure if its still there. This clause was not mentioned by the salesperson when I sign the loan.

Now they change to penalty for those who underutilise the loan amount.



This post has been edited by jonnie: Apr 6 2016, 04:52 PM

Putting excess money to reduce the outstanding for sure will reduce the interest as well. But the amount you save would depend how much you able to reduce.

Let say bank already paid RM 250k to the developer and charge RM 1k interest per month, so if you pay RM 1k, next month bank will charge you RM 1k again as interest for that RM 250k outstanding.

If let say instead you pay RM 1k for interest, you pay RM 2k instead. So your new outstanding would be RM 249k, and may charge RM 999.50 (just example, for actual amount, need to count by yourself) interest in the following month, so you save RM 0.50 cents of interest.

You can put whatever amount into the account by yourseld, no need to start installment officially with the bank early.

Got it, make sense. Thanks very much for this

What's the rate of the minimum interest? 50k, 100k, 150k also similiar?


The case of penalty for those underutilize the loan amount is already called off.

https://forum.lowyat.net/topic/3762030/all

RM 10-20 every month. if i remember correctly.

Never owe them money but still pay RM10 maintenance plus the minimum charge for a period.

small amount but felt cheated. lol

just ask your opinion....if u have 50k, would it be better to dump it to your housing loan account or put it in fd?

If i recall correctly, full flexi got a service charge where you pay an amount (RM50?) every time u withdraw money from the account. Semi flexi you pay a fix amount RM10 - RM20 per month as service charge but can withdraw as many times as u like.

This post has been edited by JianNinety: Apr 6 2016, 05:31 PM

Just calculate the interest lo. FD interest higher or your housing loan interest higher? Put in the higher one.

u terbalik jor

full flexi = monthly charge

semi flexi = charge per withdrawal

Alamak, remember wrongly ady. Long time since I go touch property loan. Thanks for correction.

This post has been edited by JianNinety: Apr 6 2016, 05:34 PM

depends on the FD interest rate vs your loan interest rate.

Are you sure about this? From my understanding, if your loan amount is RM500k (monthly repayment RM2.1k) even after you throw in RM200k (monthly repayment still RM2.1k) just shorten the loan tenure and monthly repayment will never go down.