Actually to clarify, I parked the extra sum to the loan account but did not issue an instruction to the bank to offset from the principal amount. And yes, the remaining outstanding still reduce and the instalment amount reduced as well (monthly payment). However, I still continue to pay a higher instalment amount to reduce the principal loan faster. That is what I was told....hope this is as what supposedly to happen. Quite confused when the loan officer explained this.

Understand about the BLR. But what I meant is for a semi flexi loan, I can gradually park money into the loan account but the interest would not change, only will reduce the monthly payment. That is what happening to one of my housing loan. Just seeking clarifications if the understanding is aligned.