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Pay off house loan early , NO discount?
SUSbg12
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Sep 23 2016, 11:15 PM, updated 8y ago
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Getting Started
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I hv 100k + loan balance , abt 9 yr balance, with AIA home loan. when I asked discount for settling full early settlement, they say only discount about RM1k+ . is this reasonable? how is discount or interest waiver normally calculated during early settlement?
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lifebalance
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Sep 23 2016, 11:30 PM
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QUOTE(bg12 @ Sep 23 2016, 11:15 PM) I hv 100k + loan balance , abt 9 yr balance, with AIA home loan. when I asked discount for settling full early settlement, they say only discount about RM1k+ . is this reasonable? how is discount or interest waiver normally calculated during early settlement? If you settle early then you'll not incur any future interest. What discount you're talking about?
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kradun
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Sep 23 2016, 11:32 PM
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QUOTE(bg12 @ Sep 23 2016, 11:15 PM) I hv 100k + loan balance , abt 9 yr balance, with AIA home loan. when I asked discount for settling full early settlement, they say only discount about RM1k+ . is this reasonable? how is discount or interest waiver normally calculated during early settlement? Why need to give u discount? U early settle still need to pay interest for unexpired term?
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ReWeR
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Sep 23 2016, 11:34 PM
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QUOTE(bg12 @ Sep 23 2016, 11:15 PM) I hv 100k + loan balance , abt 9 yr balance, with AIA home loan. when I asked discount for settling full early settlement, they say only discount about RM1k+ . is this reasonable? how is discount or interest waiver normally calculated during early settlement? you saved a lot in interest
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ManutdGiggs
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Sep 23 2016, 11:37 PM
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Brader hav u heard of lock in period or bonding period???
Tats bcos some financial institutions dun allow early settlement.
Same tat if u settle it with 9yrs left in tenure they ll not be obliged to giv u any discount. 1k is a bonus oledi.
This post has been edited by ManutdGiggs: Sep 23 2016, 11:39 PM
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soultaker
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Sep 23 2016, 11:48 PM
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what's ur loan amount and tenure? probably FI already collected most of the interest and left principal amount to pay.
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BEANCOUNTER
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Sep 24 2016, 12:41 AM
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Yr 100+k loan is the principle amount.....
Not principle + interest.....
Therefore no reducing in balance if you settle earlier...i presumed you have already past ur lock in period.
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SUSbg12
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Sep 24 2016, 09:15 AM
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Getting Started
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QUOTE(BEANCOUNTER @ Sep 24 2016, 12:41 AM) Yr 100+k loan is the principle amount..... Not principle + interest..... Therefore no reducing in balance if you settle earlier...i presumed you have already past ur lock in period. it's a 20 year loan, passed 11 years. yes, lockin over. I was just expecting more savings, since I m settling 9 years ealy
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SUSbg12
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Sep 24 2016, 09:18 AM
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Getting Started
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QUOTE(soultaker @ Sep 23 2016, 11:48 PM) what's ur loan amount and tenure? probably FI already collected most of the interest and left principal amount to pay. loan amount about 150k for 20 years. yeah, now I believe so too,. they collected most profits early... I just felt disappointed ..but I maybe wrong
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aaron1717
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Sep 24 2016, 09:19 AM
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QUOTE(bg12 @ Sep 24 2016, 09:15 AM) it's a 20 year loan, passed 11 years. yes, lockin over. I was just expecting more savings, since I m settling 9 years ealy you save your interest of the house loan already... although you paid more in the past... but you still have some savings on top of your 1k discount... and its your principal... doesnt make sense for bank to give you more discount on early settlement of your principal... from their point of view... the longer u drag the more money they have... they encourage on time payment but not early settlement...
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SUSbg12
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Sep 24 2016, 09:21 AM
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Getting Started
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QUOTE(ManutdGiggs @ Sep 23 2016, 11:37 PM) Brader hav u heard of lock in period or bonding period??? Tats bcos some financial institutions dun allow early settlement. Same tat if u settle it with 9yrs left in tenure they ll not be obliged to giv u any discount. 1k is a bonus oledi. that applies for car loan I think for housing loan, the savings for 9 yrs early settlement shud be bit more, but maybe I had wrong impression all this while I think online calculator somewhere shows the savings..
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ManutdGiggs
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Sep 24 2016, 09:25 AM
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QUOTE(bg12 @ Sep 24 2016, 09:21 AM) that applies for car loan I think for housing loan, the savings for 9 yrs early settlement shud be bit more, but maybe I had wrong impression all this while I think online calculator somewhere shows the savings.. Boss i settled more balance in tenure but i get nothin
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SUSbg12
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Sep 24 2016, 09:26 AM
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Getting Started
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QUOTE(lifebalance @ Sep 23 2016, 11:30 PM) If you settle early then you'll not incur any future interest. What discount you're talking about? I am sorry, used wrong discount term I mean current balance principal + interest is 100k+. if If I settle early, I thought only need to pay 80k+ for principal only. was surprised that interest saving is 1k+ Only
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ManutdGiggs
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Sep 24 2016, 09:27 AM
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QUOTE(bg12 @ Sep 24 2016, 09:18 AM) loan amount about 150k for 20 years. yeah, now I believe so too,. they collected most profits early... I just felt disappointed ..but I maybe wrong They din get more in fact they loss the recurring for 9yrs. They hav to loan out the amount to generate recurring
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ManutdGiggs
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Sep 24 2016, 09:28 AM
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QUOTE(bg12 @ Sep 24 2016, 09:26 AM) I am sorry, used wrong discount term I mean current balance principal + interest is 100k+. if If I settle early, I thought only need to pay 80k+ for principal only. was surprised that interest saving is 1k+ Only Principal should hav no discount. Ur house is 1k cheaper now and u save fr interest.
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SUSbg12
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Sep 24 2016, 09:44 AM
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Getting Started
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QUOTE(ManutdGiggs @ Sep 24 2016, 09:28 AM) Principal should hav no discount. Ur house is 1k cheaper now and u save fr interest. how do save this interest? current principal+balance is like rm113k early settlement is rm111k only save about 1k+ interest. I check online calculator, shows bigger interest saving, refer attachment. thks This post has been edited by bg12: Sep 24 2016, 09:45 AM Attached thumbnail(s)
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kradun
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Sep 24 2016, 09:45 AM
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QUOTE(bg12 @ Sep 24 2016, 09:26 AM) I am sorry, used wrong discount term I mean current balance principal + interest is 100k+. if If I settle early, I thought only need to pay 80k+ for principal only. was surprised that interest saving is 1k+ Only That one was ptptn loan that granted special discount for early one off settlement. U borrow 100k then early settlement only pay back 80k, like this u earn money or bank earn money? lol
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wl_n
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Sep 24 2016, 09:46 AM
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Bank willing to give 1k discount on the accumulated interest is very good already. Is it common for bank willing to give discount? Bank gain nothing fr early settlement but lost recurring income.
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SUSbg12
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Sep 24 2016, 09:58 AM
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Getting Started
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QUOTE(kradun @ Sep 24 2016, 09:45 AM) That one was ptptn loan that granted special discount for early one off settlement. U borrow 100k then early settlement only pay back 80k, like this u earn money or bank earn money? lol QUOTE(wl_n @ Sep 24 2016, 09:46 AM) Bank willing to give 1k discount on the accumulated interest is very good already. Is it common for bank willing to give discount? Bank gain nothing fr early settlement but lost recurring income. I was expecting rebate arnd below value, do I calculate wrong? Attached thumbnail(s)
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aaron1717
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Sep 24 2016, 10:10 AM
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QUOTE(bg12 @ Sep 24 2016, 09:58 AM) I was expecting rebate arnd below value, do I calculate wrong? when you decided to pay it off to the bank now... you only pay the principal only right? the interest for the future years not to be pay by you anymore... hence the savings already is on the interest that you no need to pay more in the future... first of all... from layman point of view... if your principal is only 135k... you pay earlier now... the rebate are the savings from the future interest u gonna pay... bank wont rebate that amount to u... because you already make them lost recurring future income already... This post has been edited by aaron1717: Sep 24 2016, 10:13 AM
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