Guys,

Any cons on those flexi loan whereby you can put in extra money and withdraw them anytime, and those extra money you put in will reduce your principal hence your interest amount?

For example your loan is 500k and the interest is 6.75% per annum, you dump it 500k inside hence your interest become 0 and you only service the loan amount every month.

Can it be equate to investing 500k and getting a 6.75% return?

The only cons I can think of is you can get better return if your invest your 500k elsewhere.

In answer to your question, yes - it's like getting 6.75% return. The only con I've seen so far is the lending rate is higher than a conventional home loan, plus the monthly maintenance fees.

put it this way, the 500K u put in as advanced payment to reduce the interest charge on loan amount, u only lose 3-4% for not generating interest from the 500K compared to put in FD. u put the 500K in FD n get 3-4% return and pay 6.75% to loan amount , which one is better now? flexibilty ?

Imagine this way pulak... you put 500k in FD after a year getting 4% interest and compounded back into 500k. now you hv 520k for next year FD. 2nd yr you hv 540.8k, 3rd yr you hv 562.4k, 4th=584.9k, 5th yr=608.2k.

so, you gain ~21% for 5 yr FD. of course you need to allocate your monthly sallary to service your loan. after 5 yr, refinance your property... boom!!!, your r millionaire.....

true also about the compounding interest.

So better put in FD?

You should understand the purpose for this type of loan.

Flexi Loan is more for business owner who is running business and could afford to pay extra $$$ generated from their business. The withdrawal flexibilty enables them to get the extra $$$ out whenever they need it for their business cash flow. If you are fixed income earner, very seldom you will do extra payment.

I dun see any advantage of this type of loan as interest rate are higher than term loan and you have to pay startup fees and maintenance charges.

Just for info, banks don't do losing money business.

A bank offered me BLR-1.8 for flexi loan. I think that is better than normal term loan interest rate right?

One should only consider flexi loans when they have plenty of cash in hand.

there's a term called "minimum charge"... banks are smarter than you think

cons is the interest rate is slightly higher than conventional loans...
well... that's my research based on last year, this year a lot of bank are offering BLR - 2%... darn...

Go for StanChart's Mortgage One... RM10 per month, unlimited transactions... some banks like UOB charge per transaction...

how does this minimum charges work?

not sure about the min charges. but most there will be a fee charged per month (rm10 - std chartered, alliance) and rm5 - ambank for flexi loan. 1 time setup fee of rm200. basically all your extra payment goes to your current account therefore no fees when you withdraw money from your account.

kenji, u mean a lot of banks offering -2 for flexi loan? i have yet to find -2 whole tenure for conventional - do let me know which bank?

If you guys really wants to know more, I had previously engaged in a huge debate with some in realestate.com.my

There's one forumer there which I deem quite good in his analytic skills:
marxdean. Quite informational from him if you can understand his points:

http://realestate.net.my/forum/viewtopic.p...6651&highlight=
http://realestate.net.my/forum/viewtopic.php?t=6445
http://realestate.net.my/forum/viewtopic.p...7555&highlight=

nope conventional, OCBC offering BLR-2% for KK Wetlands

thanks for the link.

The arguments that this marxdean guy put forward

1. Interest rate is higher (that may be the case few months back but now I believe the rates are same or even better than conventional loan)

2. Back to square one if we take out the additional amount we put in (Need to do some fine calculation first but I believe even if we put for like 1 month the additional money and then took it out, we do save on some interest in that one month)

What is your view b00n? Are u on flexi loan?

for the whole tenure?

I'm on flexi loan and I have my own reason for taking it.
One reason is because my wife's earning is base on incentive, thus whenever there's big commission we'll commit it to the loan.
I've my fair share of argument with this marxdean guy. But I do admire his logical explanation.
But long time didn't see him in that forum, nor did I log in for a long time also.

I am also on a Mortgage-One loan, and so far I am very pleased with the flexibility. I have not much info on the current flexi loans by other banks, and only some maybe outdated info of that offered by Citibank years ago. But I think a flexi loan is not suitable for everybody. It is suitable for people that
1. Wants to take a longer loan tenure (to reduce minimum monthly repayment) but has the intention to repay in full before the full tenure
2. Has the financial capability to pay an average monthly amount higher than the minimum amount
3. Has the discipline to act according to pt 2
4. Net positive cash flow every month, and income is much higher than the minimum monthly repayment

I see pts (1) intention, (2) financial capability and (3) discipline as necessary in order to benefit from the flexi loan, and (4) is optional. And I think the prior discussions in the other forum did not take pt (4) into consideration. Let's look at an example:

Salary: 100%
Minimum monthly repayment: 30% (this includes paying towards principle and interest)
Personal savings: 20%
Monthly expenses: 50%

I assume that all salary of 100% is deposited into Mortgage One, and the savings of 20% is also kept inside always reduce the interest. These excess payment of 20% per month also serves as emergency fund, and can be withdrawn at anytime. Remaining monthly expenses of 50% is typically not used up in a single day. For simplicity sake, I assume it is evenly distributed (ie. you "withdraw" from the bank an equal amount every day) and hence on average, 25% of your salary (50% / 2) is in the account to help to reduce your interest (but they do not reduce your principle, since at end of the month, they are fully withdrawn out). Therefore, a total of 30% + 20% + 25% = 75% of your salary is contributing to reducing your monthly interest and principle.

In a less flexi loan where penalty is incurred when withdrawn, then 30% + 20% = 50% is contributing. And in a conventional loan, only 30%.

Therefore, the Mortage One loan is working out very well for me. On average, I am keeping more than 2X the monthly minimum in the A/C (eg. if I need to pay 1000/mth, then I maintain at lease 2000/mth), I withdraw my expenses only when I need them (eg. pay bills only when they are abt to be due, but make sure I pay in full the CC), and so far, after abt 5 years of repayment, my monthly interest has reduced to <50% of what I started out with. And all these, with less headaches in how much to plan for emergency fund, and how much to prepay in advance etc. I also got hit with something similar to b00n, where a family tragedy needed me to withdraw close to total 20K within 2 month, but spread over a few times, but accessing the money was a snap, and no extra charges incurred.

Finally, I do not think the Mortgage One plan is so suitable for businessmen, as it is unlike an overdraft where you can withdraw up to your original principle. In Mortgage One, every month, the portion that is paying towards your principle is "frozen" and is not accessible anymore. This is how the bank reduces its risk. Therefore, towards the end of the loan tenure, you can only withdraw a small portion of the loan. For businesses that require more flexibility, other loans might be more suitable.

I am a new member here ... did u guy really understand your own loan package ?

* Do you know how to analyze the Loan Advertisement?

* Do you know how to analyze the Loan Quotations?

* Do you know how to analyze the Letter of Offer?

* Do you know how to analyze the Loan Agreement?

* Do you know how to analyze the Loan Statement?

*Do you know how to analyze the Principal Reduction?

*Do you know how to analyze the Advance Payment?

*Do you know how to analyze the Excess Payment?

*Do you know how to analyze the Late Charges?

*Do you know how to analyze the Revision of Interest Rate?

Please Don't ignore this Problems and Please read this Web page
http://mortgagereduction.com.my/blog

The blog looks familiar.....hhhmmm.... SUPEX related?........Bryan??.......

OMG.....they r finally here.............

At least give him credit for being so persistent.....

The best part............they're going to charge you for all that.........errrr......... they term it as selling a service.

"charge" i believe is an understatement, think "rip-off" would best describe their "fees".

Hi, please help me as this question had been in my mind for quite a
long time but none of my friend who bought house could give me the
correct answer. For Flexi Home Loan

Let said I want to buy 120k properties, but currently i have 70k
cash, Can i loan it with max 90% @100k. Then after that i dump my
50k into the loan so make the total interest become

Normal Condition:
120k house@100k loan = 100k X 6% = 6k/year interest

I want to make it
120k house@100k loan = 100k x 6% = 6kyear = rm500/month interest
Then 2nd month i dump in 50k
Total owe bank = 50k
50k x 6% = 3k/year = rm250/month for interest.

Can it be done? what is the penalty?
What is the difference i loan 50k directly compare to i loan 100k
then dump 50k to reduce total amount i owe bank?

What I'm have in mind is as I made extra payment 50k as extra
payment, I can have skip do not need to pay the installment for
first few years, i can use my monthly saving to do other investment.
And since the extra 50k is advance payment, in case of emergency i
can take out the $ for temporary use.

Yes you can. Most banks only give you penalty when you pay back all within less than 5 years or stated by the bank. Talk to your bank about it.

nonop, i dun intent to pay all in 5years, also not afford to pay all in such short period. What i want is to reduce interest rate and settle the loan asap

Normally I'll suggest customer to take max loan tenure n max loan. Cuz since u're so young, if u take max tenure then the monthly installemnt will be lesser. So mayb u got extra money you can do others investment..money make money. if u loan 100k u also allowed to dump in 100k so the bank will charge u 0% interest, no any charges, no penalty..

For example,

monthly installement we have to pay 2 portion, principle and interest.

Loan Amount : 100k
Loan Tenure : 30 years
monthly installement: RM800
principle : RM300 Interest : RM500 (no dump any money into your CA)

Let's said u got dump in 50k
so, maybe principle : RM300 Interest : RM400
the RM100 tat u saved we will rebate it into your CA.

P/S: this is just for an example. The interest saved calculation is not accuarate.

@Errie,
I don't understand what U mean by if we take a 100k loan and dump 100k in, the bank won't charge us interest.

Also, if we had the 100k to put into the bank, Y would we need the loan in the first place?

can i know what bank is this so that i can recommend my dad for refinance?

there is a minimum charge if you place a cash amount equivalent to your loan outstanding amount... i too have a housing loan and i've spent some time surveying most of the banks around...

also, it will be wiser to pay off the loan unless you have an investment that is give you higher per annum returns compared to your housing loan interest rate...

@kenji1903,
Yes I'm quite sure there would be some surcharges incurred cause banks are going to need to make $. It just doesn't make $en$e for an individual to put those $ in the bank and take out a loan equivalent to the same amount. It also doesn't make $en$e for the bank to allow that cause they aren't going to benefit from it; other than the fact that they know U'll be able to pay up the principal sum but hey it doesn't draw lots of profits due 0% interest charged.

Tinkerbel, liquidity is the name of the game. No point tying all your $$$$$ into your property due to its poor liquidity.

I'd do exactly what Errie suggested. That way, I have spare cash to capitalize on better investment opprtunity and could potentially pay 0%. Win-win IMO.

simple. so the income tax ppl won't red flag you.

@Pai,
It only benefits one if there are no additional charges. Also, I don't see how it benefits the bank hence am surprised.

Tinkerbel,

There's no free lunch (unless u r extremely hot, that is ;p ), hence why there's usually the RM10 maintenance fee for the loan a/c.

To portgage loan prospects, pls check your loan LO throughly prior signing, as there might be hidden clauses that could cot u more than initially anticipated.

pay cash for 120K property won't kena red flag, but if ur name appear too often on the list submitted to LHDN, they will AUDIT u.

@Pai,
Now we're talking - there is a surcharge for the service rendered unlike what was mentioned previously. Also, I do get free lunches and I really ain't hot

First of all TS doesn't know what is flexi loan.
Pls do up more research and the easiest way is shop around and ask bankers.
Truly full flexi loan is available with SCB, Citi and HSBC whereby they give you ATM cards and checque books.
Some are what I would term them as partial such as UOB, OCBC and most local banks. I.e. when one wants to withdraw, they would have to inform the bank and can only withdraw in Thousands or multiples of hundreds with the minimum of RM500.

Than when we talked about charges, usually the first group would charge a monthly "account maintenance fee" of RM10. Whereas the latter group usually doesn't charge anything but might charge processing fees upon withdrawal.

So now the decision is on whether or not one really needs this "flexiness" and how frequent one projects he/she would need to withdraw money.

Btw, the advance payment made doesn't reduce one's monthly repayment. In all, it would reduce the total loan principal thus reducing also the interest charged. But the monthly repayment amount is still the same.

Put HLB's MortgagePlus into the full flexi loan category....and it also charges the RM10 monthly maintenance fee (I asked for waiver, but wasn't given it, oh well ).

I have calculate for the rm10 monthly charge for 'TRUE' flexi pay loan already, its only worth if you have >16k extra payment all the time to save the interest for paying rm10 charge.

2k x 6% = rm120 or rm10/month.
The extra 2k will goes to the rm10 charge

Like I say, the way you calculate interest shows that you're not familiar with housing loan interest at all....
mortgage interest is using amortising method.
excel PMT function:
(from excel help)
Calculates the payment for a loan based on constant payments and a constant interest rate.

Syntax

PMT(rate,nper,pv,fv,type)

For a more complete description of the arguments in PMT, see PV.

Rate is the interest rate for the loan.

Nper is the total number of payments for the loan.

Pv is the present value, or the total amount that a series of future payments is worth now; also known as the principal.

Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.

Type is the number 0 (zero) or 1 and indicates when payments are due.


And according to your first post example, you'll be paying RM599.55 per month.
Logically if you've dumped in RM50k the next month your monthly repayment should reduced to RM300.07 but the fact is flexi doesn't work that way. You'll still have to pay monthly RM599.55 till you finish finish paying down your principal.

This post has been edited by b00n: May 26 2008, 03:33 PM

ok, so i can conclude that,
100k loan @ 6%

50k @ 6% = RM3k /year interest
599.55 X 12mont = RM7194.60 (total payment per year)

So after 1year, my outstanding loan amount would be

7194.6 - 3k(50k interest for 1year)
So i'll paying RM4194.60 on principle

instead of if i loan 100k no extra 50k payment
RM 7194.6 - 6k(10k interest for 1year)
pying RM 1194.6 on pinciple.

This post has been edited by ychwang: May 26 2008, 07:21 PM

This is just an example la..For rich ppl sure they will dump in more money la...
i got 1 customer borrow 150k dump in 150k la

this also can argue..dizzy

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Added on May 26, 2008, 11:31 pmgot lockin period la sure every bank have la 5 yrs 9%..standard la, just u can dump in money any time withdral it anytime no penalty charges only....sorry forgot to mentioned we do have rm10 monthly maintenence fee and rm200 one time set up fee..pay upon signing the LO.

This post has been edited by Errie: May 26 2008, 11:31 PM

I'd rather pay RM10 p/m and save few hundred or thousands in interest per month. Dont want to be penny-wise, pound foolish


lucky u.............no one wants to buy me lunch.................

Hi... wanna ask something regarding Flexi vs Fixed Loan, & Daily vs Montly Rest...

My understanding (Flexi vs Fixed):
---------------------
Fixed Loan: for extra prepayment, it reduces your principle. Hence, it helps to reduce the interest
Flexi Loan: for extra prepayment, it will just park in your current account. And it "virtually" reduce your principle. Hence, it helps to reduce the interest (same as above), except that you can withdraw back the extra prepayment anytime, no charge (apart from other maintenance fees). Then the interest will be recalculated =
[ (the actual amount you owe bank - virtual prepayment you made) * interest rate / 365 ].

With my understanding above, if flexi n fixed loan come with a same rate, no way the fixed loan can be better than flexi loan, right? Or is there any other benefit on the fixed loan (let's say we omit the setup n montyly charges)?

Daily vs Montly Rest
-----------------------
Everytime i see in the brochures, the bank will says smth like "interest is calculated on daily basis, so you can save on the interest". But isn't it with daily basis, the calculation will be in a Compound Interest way where you actually pay more interest instead of saving them? whereas for montly rest, it will be calculated once a month (net outstanding amt * interest rate / 365*30)?

This post has been edited by ...PS...: May 27 2008, 10:27 AM

as i mention as above, flexiloan only help you save if your park amount >2k.
So if you park 2k = rm120/month = RM10/month goes to monthly maintance c/a fees. so u earn no interest
only if your park amount more than 2k, the subsequence amount will help you save 6%(if your loan interest is 6%)

Let said your loan interest is 5%, u need RM2.4k in park c/a all the time in order to "Break Even" the rm10/month maintaince fees.

I'm very interested in this terminology between Flexi and Fixed loans as well, need to decide which type is better for me in the long run to save on interest.

By the way, I recently called up one of my housing agents, I want to buy an RM 255K house, loan 90%, tenure 30 years, BLR 6.5... she calculated and said the monthly installment is RM1,300. Wonder if it is correct....

By the way, I am 25 this year. Can tenure be 35 years?

It's depends on the interest rate and with/without MRTA. If BLR-2% whole tenure for 229.5k, 30 yrs tenure without MRTA, monthly should be around RM1200.

some banks offer 35 yrs tenure or up to 70 years of age.

i wanna ask...

I taking a flexi mortgage loan with BLR -1.8% for 216k loan with 30yrs.monthly Rm1160.

Principal 260
Interest 900

if i dump in 200k on 2nd month,mean i still paying 1160

Principal 1094
Interest 66

is it calculate this way??

Yup,your interest will be count as
216k-200k = 16k * BLR - 1.8

If you dump 216k, you interest will be count as
216k-216k = 0 * BLR -1.8 = 0

So your monthly installmant Rm1160 will 100% become principal.

This is y some people will take a loan even they already have the money to buy with cash in hand.
They can buy a house with the cash and still have the cash liquidity in case of emergancy.

---

Added on September 12, 2008, 4:53 pmFor me i will definately go for flexi loan. As every Rm1 we have in hand, we can save Rm1 interest.

If you earn Rm5k and spend Rm5k every month,then ony you go for fixed loan.

Even some bank state that they are semi-flexi ,but there are alot term and condition.
Which is not flexi to me.

I deal with some customer who dump in extra money but it didn't save any interest for them.
After checking i found that the money is stay in bank as early payment, which use to deduct every month for the installment. Not early settlement.





This post has been edited by onnying88: Sep 12 2008, 04:53 PM

onnying88, many thanks for your kind advise. I will take note of it.

No problem

One more things to take note if u really go for flexi,
You have to open a current account with the LO u signed. No need to put Rm1000 as normal current account needed.
your extra money and monthly installment will all put in the current account that will link up with the loan.
This is a important step for flexi loan.

If for fixed loan, they get the rate which offer lower interest then flexi.
which normally fixed loan have lower interest rate then flexi.


Any problem according for the housing loan,feel free to pm or ask me.


Goodluck in getting your dream house


This post has been edited by onnying88: Sep 12 2008, 10:23 PM

mine is flexi one but i dont see any cheque book coming with it...Which is better? positive cash flow or save interest??hmmm

Well, it's like doctor or lawyer. Or a comp technician... that's their trade.

Just compare interest to interest.
FD interest lower than Loan interest, so put in Loan.
If balance in flexi loan already 500K and zero interest, then put in FD.

I think compounding interest also works for Loan but have to start at say 400K so that you actually do incur interest

If you have $500k flexi loan and $500k cash in the flexi account.

Would the bank able to loan others $1.5mil?
The bank is allowed to loan 3 times the amount in their customers' savings.

Pretty much none of our business...
As long as we managed to save on our interests, who cares what the bank gonna do with the money, seriously....

I think banks can lend you up to installment equals to 1/3 of your salary.
Maybe like share investment they lend you (not others) 3x your balance but by 3 days,
you have to pay or force sell.

Don't think they can lend someone money they don't have ... by create money from thin air.
Maybe they can borrow money from Japan with lower interest and lend to Malaysians but I think BNM will limit them.
If they can create money, don't need customers' savings at all right???

This post has been edited by getsmart: Feb 21 2009, 06:35 PM

Oh my, they are here too.

I just close a thread on Slash Interest Methodology from Acesphere.
Also gave him points deduction for spurring nonsense.

Under flexi loan with ZMC, if the loan amount & the balance in current a/c equals, it is deemed interest free.
however, ZMC means the fees/charges for loan being borne by the bank.
so, under the 'loan amount = balance in current a/c' circumstance, how do we determine that the bank has borne the fees/charges for the loan?
Is the % of interest (BLR-X%) which the bank charge inclusive of a sum of money (for the legal fees of the loan @ maybe prescribed in the form of %) on top of the interest on the loan?
If it is, can we construe that if: 'loan amount = balance in current a/c, then legal fees on loan = free?

I just combined some of the flexi loan topic into one for easier reference.
If there's any others that you come across and felt informational; pls PM me and I'll merge it in.

thanks boon, can it be made into something like below ( a widget ) that can be used by those who may be interested ?

http://www.malpf.com/2008/04/free-best-rat...ur-own-web.html

---

Added on May 22, 2009, 5:13 pmopps, sorry I think I may have miss-uderstood what you meant by 'combined' sorry ...

This post has been edited by mtsen: May 22 2009, 05:13 PM

Very interested to know, if you don't mind explaining, why?

I beg to differ.

If you have enough advance payments let say 3 to 5 years, you can vary the monthly payments according to your monthly cashflow. You can pay less let say you need to spend more money during the Rayas , and CNY. Save 90% of your bonus by dumping into this account. The key word is PLANNING.

Good for those who work for commissions, that are not fixed monthly.

It surely has lot of advantages when one knows how to plan and save, and from financial planning point of view.

However, for those do not tend to see the "benefits " if they do not know exactly how to apply , then there is no difference at all.

And having Knowledge without the actual application is equally bad. Many assumptions could have been made.

Advance Payment is one of the method that you do not have to play the banks' rules, or else facing penalties or legal letters.

Likewise, I see many forumers do not seem to understand what their loan packages could do for them. The main concern is cheapest interest counts.

Remember housing loan is a long term liability , unless and until you have fully settle.

Sad to say, very least talk from from the cashflow point of view.

Mostly assume there would not be cashflow problems throughout their lifetime. Employment is 100% confirmed for the next 20 years or so. Best possible solution than worst case scenario ? Ignoring trade cycles and work pressure.

these are just perfection assumptions in Life, or so called" smooth sailing" that most people want, a perfect world i believe.

And things happened in US, would not happen here.

And if you believe in having the financial freedom in future.

Wishing all the best.

---

Added on May 23, 2009, 1:01 pmYou have all the answers with you.

Why want to confuse yourself by asking ?

---

Added on May 23, 2009, 1:21 pmWell,

If bank allows you 1.5 millions facility, you still can park 500k back into your flexi loan.

It might be better off from tax point of view, and a way of reducing your personal liability.

It has " business sense " though may not be a common sense.

Of course, it is your plan, so decide what is best for you.

This post has been edited by SKY 1809: May 23 2009, 01:39 PM

Wrote a long post in the other forum, copy and paste it here:

Just my 2 cents from recent home loan hunt and research. Flexi loan = prepayment made offsets principal for interest calculation, prepayment made can be withdrawn.

And there are two types of flexi loan in the market now.

Type 1, Full-flexi:
- Higher interest rate than semi-flexi
- Allow you to make any amount of partial prepayment or even full payment anytime without notice.
- Keep the facility for the duration of lock-in period to avoid early settlement penalty if you are able to make full payment within lock-in period.
- ATM card and/or cheque book provided for the loan+current account to withdraw prepayment at any time without notice.
- Monthly maintenance fee of RM10 and a one time RM200 setup fee.

Type 2, Semi-flexi:
- Lower interest rate than full-flexi
- Allow you to make partial prepayment up to amount of total installment for the duration of lock-in period anytime without notice.
- Penalty imposed if loan is to be settled within lock-in period.
- Withdraw prepayment from branch office at a cost of RM10 or RM50 per withdrawal. Amount of withdrawal must be in multiple of RM1000 at a minimum of RM5000.
- No monthly maintenance fee and setup fee.

Some glossary that i am so confused with before all the research:
1. Installment - Minimum amount you need to pay every month.
2. Prepayment - Excess amount you pay apart from installment. Please take note most banks will consider your payment made 7 days before installment due date as prepayment.
3. Advance payment - Monthly installment you pay in advance so that it will be deducted automatically every month. This amount do not offsets principal for interest calculation. However, most banks do not practice this anymore. They will suggest you to use standing instructions.
4. Principal - Your total loan amount.

Note: Please check carefully for your needs. I have chosen semi-flexi because i hardly use the cheque book facility, hardly needed to withdraw money immediately, put extra cash into loan account, keeping only 6 months of expenses at saving account for easy cashflow, and i save more from semi-flexi. Must do a simulation of your loan amortization schedule!

[Post deleted] Sorry, posted but I later realize it's not really related to this topic, and seems not able to delete it entirely

This post has been edited by Interrupt: May 27 2009, 10:39 PM

Do you know that if you put your 6 months expenses into flexi loan instate of saving account, you can save more with flexi loan?
Did you try calculate in your loan amortization with the 6months expenses with flexi loan ???

I agree with you completely.
The money in the saving account generate a very small interest while the same amount of money in the full flexi loan account reduces a big interest.
Furthermore, for full flexi loan, you can apply for the atm card for easy withdrawal and cheque book facility.

Guys,

I need to refinance my hse.
Currently which banks offer the lowest BLR?
Any recommendation?

Yes, i did calculate having all my money into the full flexi loan account. But due to the full flexi i applied requires MRTA, hence the loan amount is higher, translating into higher interest. Note that the semi flexi loan i have applied do not need MRTA. Anyway, from my rough calculation, i will be paying around RM15 extra interest per month if taking the full flexi. Probably it is not a lot for the convenience of ATM card and cheque book provided.

There is alot banks require no MRTA for full flexi. For example Alliance,CIMB,Hong Leong.
Just that maybe some bank will have slighly higher interest rate if no take MRTA.
May i know what's the interest rate offer to you for the semi flexi and the loan amount?

Further more, you paying extra RM15 per month, but do you know you saved more then RM15 per month also in term of interest if you use flexi account as your saving account? With extra MRTA for you too.

Anyway,everyone have their own needs, no one or no package is perfect. As long the loan serve you well, that a good package.

---

Added on May 28, 2009, 5:50 pmIt's depend on what type of loan you need and also loan amount of your loan to decide which bank will give the best offer.
You may give more info about the type loan you need and the loan amount. So that we can give you some advise.

You may pm me also can. I'm helping people to get the best loan package and rate, free of charge.

This post has been edited by onnying88: May 28 2009, 05:50 PM

I do not see anything wrong if you could park 6 years living expenses into this loan account.

People tend to forget the main objective bcos too involving in small little issues like atm card and cheque books.

Unless you can find and and see better opportunity elsewhere, the return here is guaranteed. It is a parking harbour for your smooth sailing journey.

But whatever you do, asset allocation and cashflow are important.

Cash is king as far as future opportunity is concerned. It is positioned for future gains.

This post has been edited by SKY 1809: May 30 2009, 11:23 AM

Just for remind the typo error, futago is putting 6months of expenses (not 6 years ) into saving account.

Well, we all know the fact which is 6months expenses in flexi loan will give more saving of interest instead of put in saving account.

But still, everyone have their own choice to choose for a loan pacakge that they wanted. As long the loan is serve you well, it's a good package.

Well, as a reasonable consultant , if you make him see, probably he may want to consider as his future plan.

Otherwise, having 6 weeks are no diff from 6 months also.

It depends on how well you educate your client, in his best interest. Otherwise, Reducing the tenure by half is just a fake as well. Nothing to shout about.

You cannot put a sale in front of a need, and if it is is a need based selling, to serve his need.

This post has been edited by SKY 1809: May 30 2009, 02:20 PM

I already let him know the fact and make him see what's flexi can help in earlier post, but if the clients needs or interest is not in flexi, no point to force them to take. They may end up sign up flexi loan and still put money in FD/Saving Account.

As a consultant, our main job/objective is to educate client, let them know the best they can have. If they think semi-flexi is better for them, we just go for semi flexi. A reasonable consultant will never force client to take anythings, we just consult and let client choose for it.

Reducing the tenure by half, it will happen and it's a fact, but nothings come for free. You can't commit it, then it's different story. You wouldn't gain anythings if you do nothings.

I get the offer as this.

Semi flexi - BLR-2.4
Flexi - BLR-2.2

If the loan amount is 370k, and average principle need to pay interest at the end of year is RM350k.
In the first year, total interest to pay for semi-flexi = 350k * 3.15% = 11025

total interest to pay for "fully flexi" = 350k * 3.35% = 11725
Total interest saved if use semi-flexi = RM700

For example, I have extra cash flow which can temporary "park" in the fully flexi account = 5k, total interest save = 5000 * 3.35% / 12 month = RM14 - RM10 (month maintainance fee) = RM4.

Total save per year = RM4 * 12 = 48.

In the scenario above, semi-flexi will save more (700-48 = 652), since it able to get lower interest rate compare to fully flexi.


From my calculation, I found that lower interest rate is the key factor to reduce interest rate, fully flexi loan actually didnt save alot interest, unless you have very huge cash flow (I mean temporary cash flow, eg: will use it later to pay credit card, car loan).

If have extra money which can deposit into loan account for longer period, both flexi or semi flexi can enjoy to save interest.


Am I correct? Thanks.

My question, if semi-flexi, is there any limit of the extra payment that we can deposit to save the interest?

This post has been edited by HappyGuy: May 31 2009, 11:52 PM

Let me ask you a question, you work and get your salary every month, Where do you keep your salary?
If you keep your salary in bank, will you finish up or withdraw all your salary on 1st day of every month?
You can utilies the function of Full flexi to save even more interest by using flexi loan account as your normal saving account that keeping your salary. You can't do this with semi-flexi as you will be charge RM10- RM50 per withdraw and in multiple of RM500 or RM1000.

And also,will you finish up your salary every month? or will left maybe RM200 at the end of the month? what will you do with the extra cash every month? Seldom people will put in semi-flexi as you might use it in next month, you cant withdraw it anymore. People that using semi-flexi will pay extra base on a fix amount normaly, let say original installment is RM800, people will pay rm1000 every month, the RM200 is the fixed extra perpayment.

We hardly know how much we will use or left every month, If using flexi, you just spend money as usual and any amount that you left in account will reduce further your interest until you take it out. This is one of the different in between full flexi and semi flexi. A every simple concept, Full Flexi loan will have a current account and semi flexi don't have current account. If you using flexi loan, just transfer your money to the current account and use it as your saving account. Bank in your salary and use your money as usual. Then leave your extra cash in there if have any. Automatically it will help you save alot of money.

About your question,Either Full flexi or Semi flexi, some bank will have a limit that you can offset the principle or interest. Some bank allow you to fully offset the principle or interest.
Different bank will have different T&C. Better ask your bank clearly before sign up the loan.

This post has been edited by onnying88: Jun 1 2009, 12:47 AM

Thanks for your reply.

For your question, salary will definitely keep in bank, perhaps in current account (at least interest calculate in daily basis).
Yes, you are right, the salary will not finish up on the 1st day.

Yes, the fully flexi allow you to keep all salary into loan account to save the loan interest, but the interest actually you saved is "little" and not a lot compare to getting lower rate, based on my previous calculation.

Extra money put into fully flexi every month:
Case 1:
Rate = BLR - 2.2 = 5.55 - 2.2 = 3.35
5k, total interest save = 5000 * 3.35% / 12 month = RM14 - RM10 (month maintainance fee) = RM4.
Total save per year = RM4 * 12 = 48.

Case 2:
10k, total interest save = 10000 * 3.35% / 12 month = RM28 - RM10 (month maintainance fee) = RM18.
Total save per year = RM18 * 12 = 216

Case 3: - Higher interest BLR = 8
Rate = BLR - 2.2 = 8 - 2.2 = 5.8
5k, total interest save = 5000 * 5.8% / 12 month = RM24 - RM10 (month maintainance fee) = RM14.
Total save per year = RM14 * 12 = 168.

Case 3: - Higher interest BLR = 8
Rate = BLR - 2.2 = 8 - 2.2 = 5.8
5k, total interest save = 10000 * 5.8% / 12 month = RM48 - RM10 (month maintainance fee) = RM38.
Total save per year = RM38 * 12 = 456.


I will say that if your loan amount is high enough, you actually can save more if go for semi-flexi loan. Just to get lower interest rate, you will save more instantly.
RM700 compare to the best interest saved, which is RM456 if BLR = 8, cash flow = 10k.
Some more for semi-flexi, you can park your temporary cash into current account, you will enjoy at least 1% interest, better than none.

But of course, the semi-flexi loan doesn't save you much compare to fully flexi when your principle amount is getting lower. Can opt-for refinance again and go to fully flexi if other bank have better offer.

Last thing, I agree with you that semi flexi will always pay the fixed installment, but if can go for proper planning for the monthly expenses, people definitely can know the maximum amount they can pay for each month, to save more interest. The process of withdrawal money from loan account for semi-flexi is getting more convenient now, some bank even offer RM10 per withdrawal and 2 days processing.

For those who want to be rich.
Please use term loan.

Em, why?

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Added on June 1, 2009, 3:00 pmYa,the example really show that semi flexi will save more interest if dump in the same money in both flexi and semi flexi. Simply because the interest rate is lower for semi flexi.

But what the different here is for flexi, we will not using a fixed extra money to count, the amount in your currrent account will be extra then the fixed amount,for example you put in your salary and use your money as usual for daily espenses. From there the interest counting will totally different already. It's very have to calculate a fixed figure to show you how much you can save per month, as we dunno how fast you will withdraw the money.
Futher more, if every month we will left some extra money, normally people will just keep it in the saving account, for emergency use maybe. Seldom people will that the extra money left to put in the semi account. Normall for people who using semi flexi will just pay extra prepayment base on a fixed amount as they have calculated in their planning. But if we use the flexi, we can just leave it in the current account and use it to save more money instead of just leave it in saving account.

And also, nowaday, The interest rate between flexi loan and semi-flexi loan is getting closser already. Now flexi loan already can get up to
BLR-2.3% which semi flexi up to BLR-2.4%. Different can be 0.1% only.

This post has been edited by onnying88: Jun 1 2009, 03:07 PM

Hi!

Just curious. If I already have a Maybank current account, can I use it for the purpose of Flexi Loan prepayment? Or do I need a separate current account for the sole purpose of this loan?
TQ

Agree...

The current account must be in the same bank with the loan, if yes then you can request to use the account. If can't then you just close the old current account and use the new one that link with the flexi loan as your new current account.

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Added on June 21, 2009, 10:56 pmWhy?

This post has been edited by onnying88: Jun 21 2009, 10:56 PM

Mind elaborate on why is that so?

I am using semi-flexi, is it a term loan too?

If it is, I am going to be rich soon

some of my humble observations

1)for the 10rm monthly maintenance fee of full-flex, it is the same as parking 120(per year)/.0335(blr-2.2) = around 3600rm in it permanently (less if blr rises).

2)for the semi-flex since it will cost around 10rm to 50rm per withdrawal of multiples of 500rm or 1000rm, it would make sense to have some buffer of at least 5k or more (depending on your needs) parked at another savings/current account which acts as the daily/regular money moving account.

3)assuming that the interest earned on this savings account from parking this 5k is minimal (most savings account has pitiful initial tiered interest rates) in the semi-flex scenario, the 10rm monthly maintenance is actually free as the 5k in the semi-flex scenario could have been placed in the full-flex account to cancel off the 10rm, more or less.

4)taking the previous example where the full-flex was blr-2.2 and semi-flex was blr-2.4 the difference of .2% would equate to 200rm/100k loan/year.

so to decide which flex is for you the risk assessment question would be this, in the semi-flex scenario would you be able to control yourself well enough to limit your withdrawal frequencies so that the 10-50rm charged everytime over a year is less than the 200rm/100k loan/year that you would have saved?

my 2cents

1) Full Flexi loan, pay RM10/month, no charges on widrawn.
2) Semi Flexi, treat it as term loan, forget the withdraw facilitity, but do remember of it when you are desperate for money in some difficult time (real difficult time hor, not buying GUCCI, LV...)

Before I give you guys direct answer why term loan is much better, here are 2 examples for you guys to discuss.


Mr. A had taken a $100k term loan @ 5% for 30 years.
He has $100k cash and re-invest it, the return is 10% per year.

Mr. B had taken a $100k flexi loan @ 5% for 30 years.
He has $100k cash and park it in his flexi account, thus cancelling his interest payment.

Both of them use their $100k for monthly re-payment.
Who is richer after 30 years?

if mr A can make an investment return of 10% of course he will be richer. however, when he could find no other avenues for investing his other excess cash or that his original investment vehicle has suddenly become unprofitable, he could park his cash in the humble flexi account which at least gives him blr-2.2 more or less before he starts to think of another investment plan and proceed to empty off the flex account again.

If there is a 10% return every year guaranteed and safe, everyone is going to be rich, and i will be the 1st one who will cash out from all my property to invest in it.

Of cause if there is a better return then your loan interest, PLEASE do invest in that. But every investment vehicle have their own risk, please think twice if you can really take up the risk or not. So please invest with the risk that you can affort. If I have 100k in hand, i will not take all 100k for invest. Except the 10% return is guranteed and safe. (but there can get a 10% return guaranteed and safe in this world?)

More over,will you invest your emergency saving in the investment vehicle too? for me, i will not do that as i will need to use it anytime for emergency. But if i'm using flexi loan, i will save my emergency fund and others temporary cash flow in the flexi loan and in the same time enjoy/save a 5% interest guaranteed. And i still can use the money in flexi loan anytime i want.

If we have a good financial planning, we will seperate our money in few fund like emergency fund,investment fund, retirement fund, children education fund, and etc... Thus maybe, about 20%-30% of our money will be goin to investment fund. (for this case will go in the 10% investment vehicle). It is not advise to put 100% of our cash into one fund or investment vehicle.

So, for me
If i have a loan of 100k and 100k in hand, i will still put 100k in the flexi loan.

But if there is some investment vehicle that give better return then my loan interest,and i feel it's safe enough for me, then i will invest maybe 20k in that. And leave the remaining in flexi loan.

And if there's a investment vehicle that give 10% return and it's GUARANTEED and SAFE.
I will put all my money in that and even cash out more from my porperty and invest in it. And wait to be rich.

But in reality it's impossible to find such perfect investment vehicle. Or maybe i haven't found one yet