I can smell that you know what I mean. Hopefully the rest understand. Simple!

Loan=commitment=bank get profit? We? For the sake of the current value that we see now, which is much more less once the loan is finished

Bravo potenza10!

I still remember when I terminate my Maybank ASB loan, the officer push me to upgrade to 50k loan (current loan is 25k)...she said "untung la u nanti, habis tenure u sudah ada 50k maaaa..manyak wooo"..then i replied "50k sekarang dengan 50k 30 tahun depan lain value maaa.kena kira inflasi jugakkk"...then, she just smile and cannot reply back..hehehee..why u are willing to share profit of asb with bank????

But i still respect to other who want to get this loan.i just voiced out my opinon.For saving or investment, better do by our own monies. i.e asb, silver, gold, stock, unit trust..just spare your loan facilites to those thing that cannot buy cash i.e car, house, land...

Just my 1/4 oz gold coin!

This post has been edited by potenza10: Nov 11 2011, 11:48 AM

Same here, I was influenced by my dad about this ASB loan. He told me the same thing that our friend share here, dividend pay here and there and blablabla. About 3 months later I went to the bank and cancel, of course I need to pay some penalty for it. Better loss now then lot more later.

I think we all know that banks here always make money and play with us. Seldomly we play and make money with banks, and there are methods to!

I'm pretty sure those who take ASB loans only plan to pay the first year with their own money and later use the dividends to cover the rest of the instalments.

for example I took 100k loan for 25 years. I only have to commit about RM8k to pay for the first year. The rest of the years can be covered with the dividends.

Total money spent out of my pocket = 8k
Total money received after 25 years without doing anything = 100k

unless inflation gets crazy and 100k in 25 years is only worth 8k in current value, I don't see why ASB loan isn't a good choice.

My salaray is too low..have to spare loan facilities for car and house and 1 cc...

Exactly. That's why I didn't bother to reply to posts above you. They cannot see the point that we've been trying to make

Its depends on person itself as i can see it doesnt suit my needs. If emergency happens, i can withdraw my asb saving or pawn my gold or sell my silver bar..its easy to convert to cash.but different if u servicing loan for ASB..u cannot withdraw a bit from it and still need to continue pay the loan.

We pay from the DIVIDEND. Get it? After the first year, we are free to use our money to invest in other things. You only pay for the first year. After that, you don't have to pay. Use DIVIDEND. Then, you can use your OWN money to invest in mutual funds, gold, silver, property, etc, while you get FREE money from ASB. Can you brain that?

ASB loan

1st year, use own money to pay loan, end of year get dividend.let say 8k.
2nd year, use 8k to pay loan..

Own

1st year saving with same amount with loan, end of year have 8k CASH in ASB book + dividend.
2nd year, continue saving.


When emergency struck in mid of 2nd year and u need 10k...which one is better?????

Loan - use dividend as emergency, then fork out your money continue pay loan
Cash - lalaalalalalalalalalaa...smile of the way looking your ASB passbook..


GET IT DUDE?

It's ok la potenza10. They are smarter, paying for example RM80k in total to get RM50k beforehand. Smart.

Did you read the part that I said from the second year we can invest in other things? It's not like I put all my eggs in one basket. Oh yes, if emergency struck, I can get money from my Public Mutual, Gold, Silver. I can even sell my properties.

How long you can sell your properties? Split seconds? When emergency really need solid cash whatsoever urgently?

Paying up more than what you get and you should get is smart. Seriously smart

Maybe those in early 20's who dont come across to buy house can try this loan la..when u start to find properties (condos in klang valley now hard to find below 400k) then u know how to evaluate your credit situation.

Few points to share on this. I'm all for taking this ASB Loan.

Reason?

Point 1:
If i save 1k per month, end of the year i have 12k. Dividend i receive will be based on the average balance of the year, approx 6k. Assuming dividend declared of 10%, i will earn RM600.

If i took a loan of 100k, and paid 1k/month, the dividend i receive at the end of the year will be RM10,000. BIG DIFFERENCE!

Point 2:
Despite of taking the loan and having to pay the interest, the extra dividend i receive at the end of year will be able to subsidize the interest i have to pay and in fact still earn me a positive return (7% dvd vs 4%+ interest pay out)

Point 3:
If i take the loan, i can use the dividend to help making my monthly installments once i have received them after the 1st year. (1st year still no dividend so have to pay 100% la). So 2nd year onwards, your monthly is already subsidized in a sense.

Point 4:
If i take the loan, i have to take the ASBRTA (similar to MRTA for housing loan). If anything happen to me, the whole loan will be paid for and my next of kin will benefit. If i save 1k per month and i "kick the bucket" (touch wood), thats the end of the savings. Whatever i have thats it!

How do i know all this? My wife does the ASB loan for one of the banks. So I've done the study for her and this is the outcome. Anyone interested to know more can PM me and i can get my wife to get in touch with you. (Klang Valley only and preferably min 100k loan laa)

---

Added on November 11, 2011, 2:28 pmOooo.. on liquidity, you can easily sell off the loan and get whatever that's due back to you, and you still earn dividend on the duration you held the loan.

Hope this helps to address the concerns on emergency funding.

This post has been edited by flattyre: Nov 11 2011, 02:28 PM

Great!

If u save 1k per month with dividend 600 end year, you will get 12600 and its TOTALLY yours!

If take loan, pay 1k per month and get dividend 10k end year, what is TOTALLY yours? 2nd year still short 2k lah if use dividend along still not enough to cover?

Aiyahhh..just see the diff in term of end year dividend only.

---

Added on November 11, 2011, 3:07 pmLet put it this way lah

bank got 1mil to loan out and want to take advantage of asb dividend.so what they do? They offer loan facilties to BUMIPUTERA to take the loan.so,what is the summary? Banks will get benefit of the dividend for whole tenure when the 'smarters' group say 2nd year onwards just use the dividend to pay monthly loan and put a hope when end of loan tenure, they will get total amount of monies with inflation factor 3% per year...hahahahaha..

This post has been edited by potenza10: Nov 11 2011, 03:07 PM

Put cash at end of year get 12.6k (based on earlier example)

Take 100k Loan, assume pay 1k per month
end of year get dividend 6k
Sell off the loan to bank. Get back your principal paid (12k - interest of say 5% of 12K =600. Hence net principal 11.4k)
Total you get back = 11.4k + 6k = 17.4k.

Compare Cash @ 12.6k vs Loan @ 17.4k = Difference of 4.8k (thats 38% more than via cash)

All for 1 year work only. Which one better? This can happen because of leveraging. Use money to make money. Of course the bank also earns some income. But so do you.

End of the day the choice is yours. Hence make your decision wisely.

Edit. Sorry. The dividend that you get under the loan is 12k. (asuumption was 10% dividend) Since you took the 100k loan from the beginning, you earn the entire year period worth, and not prorated like under cash. Hence total return is actually higher than example shown above. My apologies for understating the benefits


This post has been edited by flattyre: Nov 11 2011, 03:21 PM

+1


You know bank already calculate all this interest, dividend and so on. Of course bank will make profit, if not they won't introduce this. If one side is gaining, what happend to the other side? During emergency, why do you need to sell back your loan+interest+penalty when you actually can use your own savings?

For example if you need instantly RM20k NOW (for medical matter or family matter or whatever), do you really have the CASH? Yes, CASH? Yes, go and get from ASB loan

Of course in terms of liquidity, cash is king. I believe for the loan maybe take 2 to 3 months to encash. In meantime, can use the dividends & advance with CC or borrow from Ah Long .

For ASB loan, be careful of which bank you take from as some has early exit penalty and some do not when you decide to sell back the loan.

Hence be wise and know what you're getting into!

please explain how I'm not gaining when I only have to fork out RM8k of my own money and get RM100k 25 years later.

+1

Exactly the point. You get back the money at the end of the period. Not that the bank keeps the 100k. That would be daylight robbery!!

In short, the dividend is almost sufficient to cover the loan, and you only need to pay minimal in total.