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Financial Flexi home loan, Any cons
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TSX-Zen
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 Nov 16 2007, 12:44 PM, updated 19y ago
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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.
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TSX-Zen
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Nov 16 2007, 05:04 PM
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QUOTE(kuya @ Nov 16 2007, 03:52 PM) 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? |
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TSX-Zen
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Nov 16 2007, 09:33 PM
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QUOTE(cuebiz @ Nov 16 2007, 07:50 PM) 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? |
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TSX-Zen
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Nov 17 2007, 08:12 AM
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QUOTE(kenji1903 @ Nov 17 2007, 01:30 AM) 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? |
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TSX-Zen
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Nov 18 2007, 12:01 AM
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QUOTE(b00n @ Nov 17 2007, 03:48 PM) 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=6445http://realestate.net.my/forum/viewtopic.p...7555&highlight=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? |
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TSX-Zen
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Nov 18 2007, 12:02 AM
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QUOTE(kenji1903 @ Nov 17 2007, 11:49 PM) nope conventional, OCBC offering BLR-2% for KK Wetlands for the whole tenure? |
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