Yes correct. It will include in the processing fee of RM63. You need to pay this in your 1st installment.

if u dont have any problem to pay for the current installments u can just go on. But if u want to get the lower rate yes u can always terminate and reapply.

Or if u r eligible you can maximize OPM by adding another 200k financing and get the lower rate. You can switch to pay the lower rate installment and for your current asb 200k pay by using the dividend. By doing this u can earn more profit than terminate and reapply for the better rate. PM me for more info.

This post has been edited by haziqnet: Mar 5 2017, 08:25 AM

sorry im not understand. can u please advise me? thanks ya

hi there.

congrats for your 1st step to achieve financial freedom. The best way to maximize profit actually is not by terminating and reapply but to max the OPM. Your current rates now (5%) is already the lowest (put aside the 2 month 4.8% special rate) If u r eligible try using the hybrid method by adding another 200k (asb2) to max out your ASB loan to 400k. This method will be a good choice and give you more profit if u dun have any intention to use the money in the near time.

Please take note the compounding effect will be much bigger when you hold your loan longer than start afresh after few year.

Comparison between compounding and hybrid method. Look at below :

Compounding method
-------------------------

200k loan
terminate after 3 years

Your estimate profit

compounding dividend = 43,295
Principal = 9,313
Total = 52,608
Nett profit
52,608 - (1073 x 36) = 13,980 @ 39.19% ✔

Hybrid method
-----------------

200k loan (1st year)
200k loan (2nd year)

Terminate after 3 years

Last dividen (1st year loan) = 13,500
Compounding dividen (2nd year loan) = 27,911
Dividend balance x 2 years (after paid for 2nd year loan) = 1248
1st year principal = 9313
2nd year principal = 6053
Total = 58,025
Nett profit
58,025 - (1073 x 36) = 19,397 @ 50.21% ✔✔

Between the 2 above method which one do you think give more profit at the end with the same amount of installments?

This im not calculating if you hold the loan much longer assume 5 years and above. I just want to show you what you will get if u optimize the OPM.

Any further question PM me. TQ

This post has been edited by haziqnet: Mar 5 2017, 09:47 AM

look at my post #1908. I explain about the hybrid technique.


about the switching method

your current 200k asb rate is 5.1% quite low already.

so rather than you terminate your asb its preferable to add another 200k asb (max OPM). This time you apply with 4.8% rates (need to follow the T&C look for my previous post)

ok now assume you already apply the 200k loan with 4.8% rates. Your monthly is 1049.33.

What are u going to do now every year,

your first 200k loan use its own dividend to pay for the installments

And your 2nd 200k loan use your own money.

Do u get it now by switching?

By doing this you not just pay with lower installments but also get more profit at the end.

For this 2nd 200k loan u can use ASB2 or apply under your wife name for ASB1.

about the 4.8% rate pm me so i can assist you. TQ

This post has been edited by haziqnet: Mar 5 2017, 09:50 AM

Hi Buggie. thanks for the encouraging words. i am planning to use ASB loan as 'force saving' and at same time maximising my profit with OPM. Based on your previous post u were saying that for every 10-years doing terminate-reapply LASB our capital will multiply by 2.

In my case i would have my 1st 200k in 10 years?

Hi Haziqnet,

Thanks for the reply. From what I can summarized from Hybrid method is for 2nd year I need to use dividend from my 1st year to pay the monthly for the 2nd year. Also need to open LASB2 for 200k in order to maximise the ROI.

The different between the compounding and hybrid method is i would have the extra principal from the LASB2. Am I correct?

Yes you will use the dividend from the 1st 200k to cover for the 2nd 200k...but if ur 2nd 200k have lower monthly installment you can switch it...try to read at my previous post...u use the available dividend from 1st 200k to pay for its own installment and for the 2nd 200k use your own money.

If u dun want to open asb2 account you can always use family proxy who u trust like your wife or siblings age 18 years above to apply for asb1.

By using hybrid method u can get 200k (gross) about 8 years while using the normal method about 9-10 years.

So if your goal to get 200k in a few years hybrid method will be faster.

This post has been edited by haziqnet: Mar 5 2017, 12:48 PM

I've spent some time going through the thread and the earlier one. While I understand the power of compounding interest over decades, I'm still quite noob on this, so correct me if the following calculation is wrong.

How is taking a loan and gaining 13,980 (above) in 3 years > than simply paying/saving the same 1073 x 36 = 38,628 (dividends not included)? Doesn't this mean that one essentially "lost" at least RM24,648 (38,628 - 13980) to the bank? The maths simply does not compute. Be glad to know if I'm missing something here.

This post has been edited by voncrane: Mar 5 2017, 02:24 PM

Hi voncrane,

13980 is the nett profit. already minus the capital from own money. it is free money generate from the capital.

From what i understand about LASB is we have advantage of the principal return to us after terminate and the dividend of the loan amount. Rather than get the dividend of our saving which is significantly lower.

Hmm.. I think I see it now... I omitted a previous factor... It's clearer now.

Thnks bro..yes correct...we are not getting profit just from the dividend but also the principal which is include in our installments and will be refund to us after terminate the asb...

We also earn profit from the ASB bonus which calculate separately.

This post has been edited by haziqnet: Mar 5 2017, 04:47 PM

Pretty much. If u use a compounding calculator, you'll see that at the end of year 10, you'd have a balance of 393k. At the end of 20th year will be 773k. At the end of 30th year will have 1.5M.

And those figures belum take into account terminate reapply kickback from amortised values yet.

So theoretically & assuming both loan & earnings interest figures remain stable. Using compound interest and loan calculators, I was able to whip up the following calculations. Kindly advise if accurate. Apologies, I'm just meticulous like that about finances...


This post has been edited by voncrane: Mar 5 2017, 07:25 PM

Glad to know that the calculations are on track.. I did a preliminary search of this thread and couldn't get a direct answer. When terminating the loan, we only have to pay back the remaining principal and no added interest/penalties right? Naturally, I'll go thru the official T & C during sign up.. But asking to reconfirm.

Yeah, technically.

But when you terminate, usually no need to fork out any funds to pay off the principal as the bank would just sell off the sijil.

So just go to the bank and request to terminate. And..... that's it! your ASB account get deducted 200k, you keep the dividend you've earned so far and the bank pays you back the principal you already paid (ammortised)

Thanks..

I am asking on behalf of my next door neighbour akak who is not so tech savvy. Is it advisable to take ASB loan at 45yrs of age and with only RM500 extra fund per mth available for savings? She told me her ASB account already at 180k so I guess max loan can apply is 20k only right? Is it still worth applying loan? She got open ASB2 acct and already max 200k but $ in tht acct are not hers.. belongs to her sisters who tumpang her acct cos their own accounts apparently already penuh. At that time, she didnt think she will ever need ASB2 for herself as her ASB also not yet penuh. Now she said segan to ask her sisters to return the acct to her. Any advice for this akak on loan??😁

This post has been edited by honkkydorry: Mar 6 2017, 10:29 PM

Rent other people asb need to pay rental

Imo self top up better. I'm thinking to settle all loan at that age and left only housing loan or already loan free.

Im afraid the bigger problem is not either she can topup another financing or not but if she eligible to do so...pm me bro so i can check for her credibility to apply loan

This post has been edited by haziqnet: Mar 8 2017, 10:40 AM