Hey guys, I have a PBB islamic semi-flexi property loan, and I have slowly paid a few lump sum payments over the past year to offset and lower the chargeable interest.

My questions are:

1. Since these are considered advance payment, do I still need to pay the monthly repayment (for example 2.2k a month or something)?

2. If I choose to pay off the loan balance but I don't want to close the loan account, is this possible? Meaning I keep the semi-flexi loan account around as an overdraft facility of sorts, and I don't need to do anything anymore every month.

Thanks in advance for your help.

Put the extra cash in the loan current account to reduce interest.

Advance payment does not reduce interest.

Monthly installment will still be deducted from the current account to pay for the interest and principle. The more money in the loan current account, the lesser the interest, hence more money goes to paying the principle.

Not sure I fully understood... my bank gave me an account number to bank in for all loan-related payments, so every month I bank in my monthly payment to that account.

For my extra payments, I also paid extra like 10k 10k 10k into that same account over some time. Over time, I noticed the bank charged me lower monthly interest, so it would appear that the interest was reduced effectively.

Go and learn regarding principal payment and such.

Best is to call the bank. Does the advanced payment pay the principal.

Depending on which flexi or sem flexi. You need to inform the bank in advance to pay extra to pay down the principal. Instead of just keeping in the account and the bank just take it from there to pay the monthly bill.

This post has been edited by AthrunIJ: Jan 17 2024, 06:24 PM

Then you are already doing it right.

If want to pay off the principle, have to go to bank physically to request. But once your money is used to pay off the principle, you cannot take the money out incase of emergencies.

However, if you just transfer into loan current account, which also help reduce interest, you can still take the money out when you need to.

This is the benefit of having flexi/semi flexi housing loan. This is better than putting your money in FD which is tied to a fixed period.

Use this way to keep your cash flow.