Im in this situation right now. Banks give advice same as u mentioned. Thanks for sharing ur exp!

If you can't have RM24/k annual salary then do as what people said. Pledge RM5k in FD for card.

Recently I came across some article that may assist you in building up your credit score.

https://www.ctoscredit.com.my/learn/how-to-build-credit/

https://www.comparehero.my/blog/if-you-dont...ve-credit-score

Hope the above links help.

If your gaji can't reach 24k to apply basic CC, i think its even harder for you to apply for 100k housing loan even if you build up your credit score. The credit team essentially look at your DSR to see if you can service your loan first, if borderline then only they see your credit health (credit score). No matter how good your credit score, if your DSR dont meet the required threshold, will still kena rejected.

And don't take PLoan or ASB loan merely for the sake of building credit score you are essentially losing money and worsening your financial health. My best advice is that save your money up for 5 years (maybe you can get around 30k?). Put in a larger down payment for your 100k house, essentially lowering yr DSR and your loan will be approved. Banks even prefer this method that if you put in more leverage (instead of just 10% of property value) as its more secure for them.

"And don't take PLoan or ASB loan merely for the sake of building credit score you are essentially losing money and worsening your financial health. "
mind sharing , how does taking ASB loan be essentially losing money? does this applies to taking loan to finance Fixed Priced funds?

"My best advice is that save your money up for 5 years (maybe you can get around 30k?)."
Mind sharing, while saving during this 5 yrs, where should the money that are in this cumulation period be "BEST" placed?
What saving vehicle can help to provide credit score track records that TS needed to built while in the 5 yrs money cumulation stage?



This post has been edited by yklooi: Jul 25 2018, 08:04 PM

Whatever loan you take (esp Asb loan at 5%? Ploans at 6+%) these are fixed liabilities. Can you guarantee fixed priced funds (or any funds) to beat that percentage - dont forget when you invest to those funds you only materialise your "gains" after like 5-8 years? if you are lucky. Whereelse you are committed to repay those loans every month. Can he sustain those payments (while he can only realise his gains after many years?)
Only a fool will take risk for such measly gain (lets say the fund gives you a handsome 8%) less your loan payment - you get back 3%. High risk low gain

The amount is too small to realise any substantial "gain". He doesn't have access to more sophisticated investment vehicle (very little ppl have) - everyone thinks the best bet is to invest in unit trust funds, ASB funds because that is what is available - if you have some money go ahead - but certainly don't take loan for that sake.

And at that amount, you can't build any real credit score. you think bank will care about your loan repayment health if you can't even qualify for 24k p/a cc?
(btw i mean not to offend you, i'm merely speaking out facts of financial world)

Save up the money, put down more leverage for the property, and prove your monthly income can easily handle the DSR of the property.

thanks for sharing....

on this "Only a fool will take risk for such measly gain (lets say the fund gives you a handsome 8%) less your loan payment - you get back 3%. High risk low gain "
i have read in LYN...that, for ASB loans, one just need to be able to pay repayment for about a year......then no need to pay from one own's pocket as the dividend given is able to generate enough repayment amount for the rest of the loan duration....

did you knew about that before? not true?

on this....
"Save up the money, put down more leverage for the property, and prove your monthly income can easily handle the DSR of the property........"
do you mean, if one put in lets says 40% down payment, then no need credit score track records to get loans for the 60%?


This post has been edited by yklooi: Jul 26 2018, 10:50 AM

"i have read in LYN...that, for ASB loans, one just need to be able to pay repayment for about a year......then no need to pay from one own's pocket as the dividend given is able to generate enough repayment amount for the rest of the loan duration...."

technically if the fund can outperform yr loan rate, maybe yes. but don't forget over 12 months u are paying loan repayment monthly, then only u get back the money at end of year.

what happens when the dividend is not enough to cover? double loss. if you are in the position where you need to borrow money to invest into asb (i think your financial health is not that good that you can handle 5% loan repayment every month).


"do you mean, if one put in lets says 40% down payment, then no need credit score track records to get loans for the 60%?"

sure, 30%-40% is prob enough for banks to feel secure - provided you can handle monthly repayments. like i said credit team don't approve loan based on credit score (you can pay your loans on time for 10 years, but if you loan repayment is only a few hundred a month, will they have confident when u take on a few thousand a month loan?) it just shows u are good at repaying loan, it doesnt show u are capable to handle the loan repayment.

This post has been edited by yklooi: Jul 26 2018, 11:18 AM

For the dividend rate, why dont you find out and post it here? Again pls read, not saying its not higher than interest rate, but rather how much higher. 1%? 2%? and again, can your financial situation handle the monthly loan repayment? if you can, i don't see why you have to take loan to invest, instead of just investing with your own money.

Bank don't care if you are good at repayment, you can have good repayment for 10 years, and the next month you can default when you lose yr job. Bank care if you are "capable" to repay the loan, and if you actually default - whether they can recover their money by selling the asset. you pay 30% down payment - its enough for the bank to recover 70% of prop value.

Feels like i'm repeating myself or i have to explain every single thing to abcde.

off topic but somehow, people didnt still get ASB Loan... high risk for low gain? do you guys know what leverage mean?

let say you take 100k asb loan, and it is 540 per month
lets compare that against just investing yourself in ASB for 540 per month shall we

540x12= 6,480
dividend = 7%
let say interest at 5.5%
interest amount is on reducing balance but for the sake of easy calculation let just say you pay on balance 100k 1st year (real number would be lower since you pay monthly)
1 year interest = 5,500

at the end of 1 year this is how much you will get if after 1 year straight away cancel loan
total investment = 6480
total return = 6480 (principal) + 7,000 (dividend on 100k straight) - 5,500 (interest)
= 23% ROI

vs

invest yourself = 6480 (principal) + 227 (dividend on 6480 adjusted monthly contribution)
= 3.5% ROI

Assumption 1 : You can get 100k loan.
Assumption 2 : You get 7% dividend.
On paper, looks very nice. Problem with not having real world experience

Btw, please use borrowings of 1m ASB loan to get 7% dividend yield for (70k-55k) + 6480 = 331% ROI.

This post has been edited by cfkoon: Jul 26 2018, 11:54 AM

Max for ASB either loan or not is 200k bro... there is no need to get defensive and attack experience or not, im just replying to say that statement that you are taking a major risk for a small gain is misleading since you deduct directly from %return to %interest and not taking into account the leveraged amount that the % is calculated against... IMO the return is actually outweigh the risk since what other investment vehicle that the capital is guaranteed?

This post has been edited by feiraron: Jul 26 2018, 12:18 PM

Bank will never loan to people who can't sustain their loan repayment whatever loan it is.

Without any CCRIS record, whether 10/90 or 30/70 there's no guaranteed bank will loan to that person that gives more down payment. The 30% can be borrow from relatives you know.

Loan to invest it's call leverage. Whether the net return it's 1% or 3% or 10% it's still a gain and don't forget the magic of compounding interest.

For a sophisticated investor but then don't know anything about ASNB average dividend over the past years, must be living under a cave for far too long.

Cheers.

there is a magic in ASB loan.....there are many write up in the web about loan vs cash...
or try post at LYN ASB loan thread
https://forum.lowyat.net/topic/667676/+3460#entry89714483

Because what you preach is highly hypothetical n impractical - leveraged investment works (in theory) but once again as i said its highly risky - its for the sake of the forum of readers to not fall for pretty numbers and unrealistic return - you have to learn to be responsible for what you preach.

For a sophisticated investor, of course we don't look at things like ASNB dividend yield, why will my RM give me products that are openly available to public we do products Local High Yield Bonds + MTNs, Dual Currency Investments, Foreign-denominated Bonds and Structured Investments (Interest-linked, Index-linked), etc

Some users (like Rapple) can't comprehend simple things, gives comments that has no contribution, but want to sound out others - i dont know how he's not embarrassed with himself. But still feel salty from another post haih

And once again guys, I have said it, and please don't make me say it again.
1. Never said CCRIS/CTOS not needed - I already said its not the most important factor
2. You can pay 30% down payment, if your DSR not good also kena rejected. I repeat focus on your ability to repay loan - i repeat, make sure can meet monthly repayments.
3. And pls go ahead with ASNB, at the end of the day, that's my opinion. you want to listen, don't want listen, its fine. I have met many ppl who failed because of "leveraged investment" mostly in property market, same concept applies here.

Good day

Does he even know ASB is a fixed price fund? Theres no risk of capital loss. The only risk is low dividend pay out that will cause some cash flow problem to the borrower.

Yet again I have to embarass myself to speak out so that people wont be misguided by some sophicasted investor here.

Cheers.

" why will my RM give me products that are openly available to public we do products Local High Yield Bonds + MTNs, Dual Currency Investments, Foreign-denominated Bonds and Structured Investments (Interest-linked, Index-linked), etc"
WHY?...my most probable reasons are....
a) the RM will make a lot of commission out of it......
b) that investor does not qualify for ASN loan .....
c) this "sophisticated" investor just got into investment knowing nothing about investment and leverage but invest by listening to the RM ......just like a newbie with cash and the bank teller would says..."Why hold so much cash in saving a/c?.....better moves some to FD for more interest rate".......(many readers would recall this similar experience I guess)...then later as time goes by......the teller(RM) will suggest to the "investor" something more....

The world is full of many kinds of people,....
some just pretend to know,
some just pretend to not know,
some just know,
some just don't know,
some just they see it and know it,
some just see but don't know it,

and the list goes on.....

example is..... not really understanding what forummers like rapple and feiraron talked about......
eventough, feiraron came out with a math workout sample....

yet he posted in response to feiraron posting mentioning about his misleading posting about ASN FP loan risk........... "Because what you preach is highly hypothetical n impractical - leveraged investment works (in theory) but once again as i said its highly risky - its for the sake of the forum of readers to not fall for pretty numbers and unrealistic return - you have to learn to be responsible for what you preach."

saying that ASN loan is "highly risky" yet I wonder how high are the risk when "......we do products Local High Yield Bonds + MTNs, Dual Currency Investments, Foreign-denominated Bonds and Structured Investments (Interest-linked, Index-linked), etc

when one talked about "......you have to learn to be responsible for what you preach.".....

"..... many ppl who failed because of "leveraged investment" mostly in property market, same concept applies here. ".......naïve to think ASN FP fund and property loan levearge are the same,........not realising the great differences of one over the other


it does occur to me that your post about "For a sophisticated investor but then don't know anything about ASNB average dividend over the past years, must be living under a cave for far too long." is true.



This post has been edited by MUM: Jul 27 2018, 09:22 AM