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 House loan- Capital repayment vs advance payment), which one-> lower interest rate

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ryansxs
post Jul 18 2016, 04:06 PM

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The terms are little confusing. To make it clear, as long as you are paying to reduce your loan amount, then it will reduce your interest repayment.

e.g.
Lets say your loan is still RM50k, then you dump lump sum RM5k (tell the banker that this money is to reduce your loan amount). Your new loan amount will be RM45k. Your interest will be based on RM45k rather than RM50k.

Advanced payment is something like you are still paying your normal installment, just that you paying more for installment. But you are not directly paying off your loan amount.

Hope i didnt confuse you in here. Trying my best to explain. LOL. Cheers

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