I have 300k housing loan from pbe with a lock period until 2027,
am I not allow to deposit money into my loan account during this period to reduce the interest?

based on my bank agent, I can only deposit to loan account after I got the house key,
but my friend said otherwise, by right, semi flexi should allow us to deposit money into loan account,

I have ~100k outstanding balance in my loan account now,
the building is still under development, around 40% completion.

any sifu can enlighten me?

This post has been edited by Perspective2021: Dec 30 2024, 10:27 AM

lock in period means you cannot settle your loan in full during that period, but you can still park your money to save interest.

generally, most of the banks do not allow you to offset the interest payment during construction period. you can check with your bank on this.

"do not allow you to offset the interest payment during construction period"

"can still park your money to save interest"

so can or cannot?

cause my bank agent said cannot,
but when i deposit RM10 into my loan account, I am able to do so.

ya, i am not looking to settle, just to park some money inside to reduce the interest.

"can still park your money to save interest"-> this is referring to lock in period
"do not allow you to offset the interest payment during construction period"-> this is referring to interest offset before you get your keys

you are asking two separate questions

but when i deposit RM10 into my loan account, I am able to do so.-> able to deposit into loan account and able to offset two progressive interest is two separate matters. this may be considered advance payment, and it will not help to reduce your interest.

Both technically correct but in your case, your agent is more correct for your current situation (under construction).

Right now you are paying progressive interest for under construction, so you cannot park in money to offset any interest because your principal has not been released in full.

Money you deposit now will be usually consider advance payment instead and will not be used to reduce interest.

For semi-flexi you need to check with your bank what are the procedures to deposit extra money to reduce interest. Some bank's semi-flexi loan product need to call bank in advance and deposit in a certain way to count correctly.

Lock-in period has nothing to do with your progressive interest period.

i with other bank semi-flexi, i start to park money before i got the key, my banker told me as long as not pay all the outstanding amount.

before u got the key

Has the construction been completed?

This post has been edited by Perspective2021: Dec 31 2024, 11:14 AM

nope .... still constructing and i start putting money in.

Hi, I am applying for the same type of loan from PBB. I had the same question too as you do. After checking with different sources, I can tell you the following:

The bank only chargesyou progressive interest and does not ask for principal payment when the building is still under construction.
So if you want to reduce interest before VP, you could still put extra money into the loan account. the extra amount you put in will be used to settle the loan amount(Principal). For example if the current loan amount is 100k and you put 10k into the loan acc. Your loan amount will become 90k. However this 10k which cut down the loan amount cannot be taken out again. You cannot take this 10k out and change your loan to become 100k again . You can only do that after VP

How solid is this?
Is the info if from PBB agent/banker?

Your banker will give you the best answer. They won't simply give you an answer on this. If you don't believe the banker, call the bank and ask for clarification on this.

Yes pretty solid. However I understand that there are small differences in practice between branches. For example I learnt that one branch allows borrower to start paying installment during progressive phase whereas others only charge progressive interest. So best to talk to your loan officer for details and request for payment method that fits you...customers have the right to pay the way they want to

Ya he is right.

Right now your extra money park fd first..
The development need to drawdown 100% only you can start principal payment

Regardless semi or full flexi, I think all bank same.

During progressive stage, yes you cannot start installment, can only start after VP. However you can do prepayment into loan account to offset progressive interest (I was told, nowadays there is a cap). Yes, cannot withdraw prepayment (done deal) prior to VP

After VP, upon commencement of instalments, you can do advance payment (in extra) into your current account (full flexi) to offset interest (this you can withdraw). Semi-flexi, withdrawal OTC.

The difference here is 1)prepayment and 2)advance payment.
Many got mixed up the 2 and how it works.

Correct me if I am wrong here. I maybe out dated dy

This post has been edited by jojolicia: Jan 10 2025, 06:33 PM

u can go to bank and deposit money into loan account specifying you want to offset the principal amount (not park there). then your interest will reduce

I was told, nowadays there is a cap --> the cap is only applicable to full flexi advance payment.


example 100k into advance payment, 70% aka 70k will be "deducted" aka not counted for the monthly interest.

Right now you are paying progressive interest for under construction, so you cannot park in money to offset any interest because your principal has not been released in full.

Not correct

you park money as advance payment while property U/C it will not reduce interest

but if you park money, ask bank to deduct principal, then monthly interest can be reduced.

yes correct

My understanding is 'cap' of disbursed amount.

Say cap 70%.

Full disbursement is 400k. 70% cap is 280k.
1) If you made a 260k, the 260k is full interest offset

2) If you made a 300k, the 280k is full interest offset

for my case 70% cap, i can pay principal loan up to min 100k.
my loan is 1.5m, so its about min 7%. anything below 7% is same interest rate so its best to pay off 1 shot.