No need to thank me Bro. 10 years from now when you've earned that 200k in dividends, just belanja this old man a teh tarik ok? Haha. We can discuss your next steps...

Also if I understand this correctly, every start of a year I should take out the leveraged ASB dividend and spread the payment in a 12-month basis. Is that correct? To me this sounds like cost averaging over the 12 months.

Thanks, informative post
What I learn here is,
Assume loan 200k, pay monthly for 3 years. Stop and cancel loan, ask bank to disburse amount of remaining, let's say 36k

So at the same month, apply maximum loan again which is 160k example (200k -  36k + dividend) and continue paying for 3 years.

Repeat.

Is this what I suppose to do?

Whole tenure of the loan. 25 yrs. Reason I ask is because earlier there was mention that we get return from insurance.

Also it seems conventional loan got early exit penalty?

Hey Bro PrincZe, I think you've gone a little astray in the concept. Let me try to explain or maybe bro Haziq can explain better in figures 

But firstly, what does the 36k represent?

Anyway, let's set the scene.... so you take 200k loan and you pay 1k monthly for 3 years. Assuming @ 7% dividend, you would have 245k in ASB by now made up of 200k sijil pledged to the bank and 45k of earned dividend in cash. You've paid 36k in installments and you have 27 years left in your tenure. Your outstanding owed to the bank will be less then 200k but that's not important.

Clear on the scene above? Ok now what do you do?

On the 1st of the next month apply to terminate the current loan which has 27 years left and immediately re-apply the loan for 200k again for the max tenure of 30 years. Don't worry, the bank officer should be used to this procedure of terminate/re-apply. Only thing is that you have to make it clear that they (the bank) have to disburse the NEW loan within the same month which could be very frustrating. I'll explain why later.

What happens when you do this? the bank will dissolve the 200k sijil and settle your existing 27 year loan. This leaves you with only 45k dividend in cash in your ASB. So for roughly 2 - 3 weeks until your new loan is approved and disbursed, your ASB will only have 45k in it. Then the bank will do their due diligence and process your new 30 year loan application and if all goes well, before the end of the month will put back the 200k sijil into your ASB making it 245k again

So where do you stand after this whole process? Your loan is extended back to 30 years. And you have 245k in ASB (200k sijil + 45k cash) ready to earn you that compounding interest at the end of the year. And you continue to pay for the next 3 years before repeating the process. And as a bonus, you get back 3k in ammortization which you can spend to get that new iPhone/Samsung to reward yourself for being so disciplined in making those monthly payments!  

Bro haziq, correct me if I'm wrong please.

Yes correct..but make sure u put the 45k dividend into another account like ASB 2 or TABUNG HAJI when apply the new 200k loan...if not u only can apply another 155k (max loan 200k per account)

If u are young u can either flip your ASB every 1,2,3 or more years until u reach 35...35 make sure u apply 400k asb and use rolling the dividend technique to cover for the loan installment (1st year installment use from the profit u earn from your previous ASB loan)

If you are terminating/reapply, the 45k no need to take out right? only if applying first time loan need to take out.

No still need to take out...if you really want to make 200k asb than yes...because max loan is based on what u have in your asb account...the dividend included...even after u terminated it...

So what you are saying is if I had 245k cash in ASB, no loan (for simplicity sake). If I wanted to take a 200k loan I need to take out the full 245k and put elsewhere? Then my ASB will be left with only 200k? If that's the case, everytime I terminate and reapply, I will be back at square one with only 200k and compounding interest is non-existent.

With due respect Bro haziq, I believe can just take out 200k and leave 45k inside. So when the bank approve my loan, and put back 200k sijil I will have back 245k...(200k sijil + 45k cash).

So what you are saying is if I had 245k cash in ASB, no loan (for simplicity sake). If I wanted to take a 200k loan I need to take out the full 245k and put elsewhere? Then my ASB will be left with only 200k? If that's the case, everytime I terminate and reapply, I will be back at square one with only 200k and compounding interest is non-existent.

With due respect Bro haziq, I believe can just take out 200k and leave 45k inside. So when the bank approve my loan, and put back 200k sijil I will have back 245k...(200k sijil + 45k cash).

If you apply loan, the bank will take sometime to disburse the loan before instalment payment, you lose the one or two months dividend depending on how fast the bank disburse the loan. Also the dividend will only  commence upon paying the instalment and not upon disbursement of the loan by the bank ?

The dividend commence at the date of your asb disbursement...thats why asb flipper every year they will apply new asb loan at early month of november and terminate it at december...continue the step every year and getting cash in hand...

If ur loan approve and disbursed in november u will get free dividend at december even u only start payment at january the next year...

If you apply loan in Nov, you have to move all the fund out from asb in Nov, so no dividend will be paid in Nov?

you mean if u already have fund in your ASB account?

i just want to explain your question either the dividend will be calculate on the date of disbursement or installment date...

so the answer is on the date of disbursement
about ASB flipper every year, if u dun have any asb account yet and your goal to get cash in hand every year than the technique is like i mention on my previous post.
why u apply at november previous year and end at december current year ? the answer is because u want to get the 12 month dividend.
If u already have fund in you ASB1, you take it out temporarily (park in ASB2 or TH), apply for 200k ASB loan after disbursed put it back. Than at December apply for termination and u will earn more dividend (compounding) as u have loan and your own fund.

but if your fund in ASB for example 50k and u only want to apply another 150k by using loan, then u dun need to take out the fund as u still not reach the max 200k yet.

If you apply loan, the bank will take sometime to disburse the loan before instalment payment, you lose the one or two months dividend depending on how fast the bank disburse the loan. Also the dividend will only  commence upon paying the instalment and not upon disbursement of the loan by the bank ?

So if take out completely from asb to facilitate the loan, then there will be no dividend for Nov, is my interpretation correct?

Bro, dividend is given by PNB and nothing to do with the bank installment. All PNB cares when they calculate the dividend is whether the money is in at that point in time. So it is at the point of disbursement.

So having said that, you can push the bank to disburse within the same month. Usually you apply first, then the bank will tell you that they are ready to disburse and request you to empty the account. So it lessens the risk. Just make sure all done by month end cause that's when they calculate.

So what you are saying is if I had 245k cash in ASB, no loan (for simplicity sake). If I wanted to take a 200k loan I need to take out the full 245k and put elsewhere? Then my ASB will be left with only 200k? If that's the case, everytime I terminate and reapply, I will be back at square one with only 200k and compounding interest is non-existent.

With due respect Bro haziq, I believe can just take out 200k and leave 45k inside. So when the bank approve my loan, and put back 200k sijil I will have back 245k...(200k sijil + 45k cash).

No like this when u r applying for max loan 200k u need to allocate all what u have in your asb into another account...after the loan disburse u can transfer the allocate money back into your asb account...

For example :

You are trying to apply 200k asb loan and in your account already have 245k so you take out the 245k and put it into your asb2 account or Tabung haji (temporary)...after the loan approved and disburse into your asb account (received an offer letter) u can transfer back the 245k into your asb1 and you will have 445k in your account.