Hi ive bought an apartment under con, and planning to buy another landed undercon too,

Currently im paying for the progressive interest for the apartment undercon around RM300.

What if i didnt pay the progressive interest until i the time i can start the full installment?

I definitely think there will be interest on top of it, but anything on CCRIS or CTOS?

Pls try and do share here Wat happen next. I oso wish to know.

It's normally mentioned in LO/LA, what will happen.

Interest rate switched to delinquent interest rate, which is super high.

If not mistaken will straight go auction after VP,like what we r seeing in auction market nowadays.
Pls correct me if im wrong

Well u might not get another loan for the landed undercon that u r planning to buy. Yes, the banks do check on one another.

Confirm will appear in CCRIS. 1 month default enough, will tarnish your record and you wont be able to borrow anything from the bank.

Your house will be lelong straight once VP. Ppl try to recover their house from lelong after 6 months of not paying also like an impossible task to most ppl. In your case will be even worse, after years of not paying. Interest rate will not maintain the same.

the bank lend money to you pay developer's construction cost, and you dont want pay interest.

you can just pay cash to developer on you own money, after completetion, then only take the mortgage from bank.

so you wont lose any money for interest.

will straight go auction after VP

and sure would appear in CCRIS

Loan rate will jump to sky high...

If you do not pay... Your name will blacklisted in CCRIS... Interrest rate Immediately switches to higher rate.... And when ur outstanding hits rm50k, bank can sue you for bankruptcy.

In Malaysia, it is so easy to get into bankruptcy while the punishment during bankruptcy was very severe. Especially for entrepreneurs, it is not easy at all.

Not sure bank will still disburse the progress billing or not why your outstanding ballooning.

This post has been edited by gks: Sep 18 2018, 11:19 PM

At least, try to read your loan agreement lah.

Please check the LA, default rate can be as high as 12%...



This post has been edited by forever1979: Sep 19 2018, 05:04 PM

Nothing will happen if u never pay progressive interest but paying principal repayment into the loan account fully on the amount disbursed for the progressive billing , if u never plan to pay a single cent until VP , then I'm curious what will happen too, may try and let us know

Under normal circumstances the bank will serve you a reminder after you default on the 1st month progressive payment interest (PPI)

Second month onwards you will get a letter of demand from the bank panel lawyer.
The cost of the legal letter will be charged to your account and it will also incur interest.

The interest rate will then switch to the default interest Rate as stipulated in your letter of offer for the bank loan.

If you still refuse to pay, the legal process will continue until the bank obtains the order for sale for your property, which will be quite fast as your property is a condo and therefore under a deed of assignment.

The bank may choose to auction the property off even if VP is not obtained if the property is in hot demand.

The cost of the entire legal process will be charged to your account and interest will be charged on it.

The auction price of your property will be below market price and manipulated by syndicates at the auction house.

On the CRISS and CTOS front you will be listed as a defaulter and your poor CTOS rating will ensure you face difficulty in getting a loan from any other bank in the future unless you clear your first loan.

In short, it is a messy expensive affair and you are certainly better off not buying the condo if you don't intend to pay the PPI.

Hi i curious, can developer know which unit property they sold have non performing loan?

If a property buyer not paying progressive interest since under construction, then it will be move to non performing loan?

And if purchaser no paying progressive interest like in stage 50%, will bank still disburse in coming stage money when developer request?

Just tell the bank you're a nice guy and promise to pay when the weather turns better Charity begins at home

Yes, they would know.

Standard SPA usually have a clause somewhere like "Default by Purchaser" which usually also covers the event where purchaser fails to meet their financial obligations to their creditors and/or bankruptcy while property is still under progressive payment.

Developer can annul the sale of the parcel (read: treat purchase as cancelled) and terminate the SPA with the buyer if they consider breach of contract due to failure to make loan payments. They may also demand money owed from buyer due to the penalty of agreement cancellation.

This post has been edited by DragonReine: Nov 14 2023, 04:29 PM

well explained and thank you for clarification. that mean if a project developer before vped already get to know how many defaulter from non performing loan, so to avoid those unit been auction and spoil the market value / valuation, they need to take action to do something to minimised the effects for their unsold unit.

Nothing, just poor credit score and interest and fees snowballed. No issue if you can pay RM3k against RM300 now

Oh no no NO, if there is default on payments of interest the property gets marked for auctioning if the buyer fails to clear their debt owed to the bank before VP.

The clause in SPA in practice simply means that the original buyer no longer has any right to claim that they "own" the property.

The developer will still claim from the bank the progressive payments and the bank will simply release the money as claimed by developer from proof of completion of the property's stages as per SPA.

This is when you see auction immediately roll around soon after VP, from defaulters on interest/progressive payments. Because if they're tied to loan it's considered an asset of the bank, and the bank needs to recover THEIR lost money (from the loan disbursement) first.

This post has been edited by DragonReine: Nov 14 2023, 10:42 PM

Yes, this. Very well elaborated.👍

This post has been edited by jojolicia: Nov 14 2023, 10:54 PM

Yeah they'll definitely take swift action to ensure their project name does not come out at the auction house. (whenever possible la haha), as auction may severely affect the valuation as well as image of the project itself and ultimately negatively affecting the developer themselves.

For defaultor loan payer, the bank have right to adjusted the interest is it, do conventional loan have a cap % they can increase? So far I know Islamic loan have cap at 12%. But I not sure this 12 % capped is SBR + OPR or only 1 rate.

Banks have their own limits and policies, cap is typically internal.

For Islamic: https://www.bnm.gov.my/-/resolutions-of-sha...negara-malaysia

But anyhow for me if more than 7% is oredi very very scary cannot imagine if double digit like the old days

Dont ever think about that idea .. bad bad bad 1

Yeah, during old time like 2008, I ever hear my parent said their interest rate for FD is around 7% above, and bank loan rate around 8%+-, that why some Chinese uncle auntie like to buy property with cash or huge amount downpayment(doing business one, cash rich uncle aunty).

When I first time seeing Islamic loan set capping interest rate at 12% (maybe variety by each bank, and time to time will change) I though its capped for economic status (let said OPR hike), and never think it's about defaultor interest adjust rate.

For conventional loan, it not even have a cap. So I can't imagined how bank legally squeeze the loan payer when they are facing financially difficult.

Raising OPR may lead to stronger currency but brings negative to export which our country is pretty much based on a lot of exports. I don't think they will raise it back to that high as it will negatively impact the market so I'm not too worry about getting into that double digit zone again anytime soon.

Should raise it to 6% bar

Confirm CTOS/CCRIS kena masuk record.
Bank will put for Auction shortly.

Don't challenge the agreement once you have sign it unless you are very confident and take advantage on the loop hole.

But I see nowadays the default rate is already like 7 to 8%, some I hearsay even goes to like 10%

10%. Loan shark.

If the defaulter able to clean the default month & secure the unit called off from the auction, will the interest rate adjusted back to normal rate?

The default rate should had already mentioned in your offer letter. Normally is BLR +%..the effective rate should be similar to land financing or personal loan, which around 7%-9%+-

This post has been edited by Rinth: Nov 17 2023, 12:01 PM

Yea haha 10% borderline loan shark dy. I asked this exact question to the banker as well. The usual way is you have to clear off the entire previous amount you owed, then continue paying for 6 to 12 consecutive months without defaulting again or even late payment before they consider adjusting back to your normal rate. The unusual way is clear off the owed amount, then at least be a good paymaster for 3 months, write in surat rayuan to get a faster review for adjustment. But is still up to the internal banker to approve though.