If lets say I have a 500k loan, and I directly transfer 500k cash to the loan but I didn't go to the bank to settle the loan, what will happen next month? Do I still get charge for interest ? reason for asking this is because I would like to avoid interest from the loan as much as I can, and indirectly I still have some cash ready in the loan for withdrawal incase of any emergency.

Not advance payment, choose principal payment, with this interest only on remaining principal balance.

depends on your loan type. some only deduct that exact amount from your "loan account".
so even if you put 10 million inside, it continues to only deduct the monthly instalment.
to settle loan, or put in large sums, always call your bank and tell them.

depend ur loan account is full flexi or semi flexi, and whether have capping

I think in your case, u still need the money at any of moment of notice. Better just pay extra till oustanding principal balance left rm1k.. then stop paying.. 4%@ 1k is only rm40 annual interest.. .. some donation to bank..

this seems like a good idea, anyone know how much is the minimum principal amount I need to keep in the loan? for example if I left the balance as Rm100 would the bank come force me to settle the loan?

better check with your bank directly as each bank have different SOP.