Help. I tried to calculate RHB's (and other bank's) ASB loan and got mindf*cked.

I tried calculating a RM50,000 loan for 20 and 25 years.

For 25 years:

Monthly payment (inclusive of interest) : RM 294
So Full amount for 25 years is 294 x 12 x 25 = RM88,200

ASB Dividend (7.65% pa): RM50,000 x (7.65/100) x 25 = RM95,625

So Net profit = RM95,625 - 88,200 = RM7425

All good and fine, BUT when I calculate 20 years.

20 Years x 332 (monthly) x 12 (pa) = RM 79,680

ASB - 50,000 x (7.65/100) x 20 years = RM 76,500

Which means theres NEGATIVE net profit... why?

Im really confused. HELP

Nope.after 20 @ 25 years, u get back the div + principal.

In short : 25 years : rm 183,825
20 years : rm 156,180

Pure profit i think

its like that? means whatever I get add the principal? (meaning the RM50k or whatever the initial loan amount is?)

Hi Mikeshashimi,

Your formula for ASB Dividend is wrong. You did not take into account Compounding Interest.

It should calculate like this:
Year 1: RM50,000 x 7.65% = RM3825. So total Principal + Dividend = RM53,825
Year 2: RM53,825 x 7.65% = RM4117. Total now is RM57,942
Year 3:.......repeat the same till Year 25. (Easier if you use a spreadsheet).

Based on the example, Year 25 you will get RM315,734

At year 20, you will get RM218,399.....

Actually, if you use an example of RM200,000 and ASB dividend of 7.65% - -> you will be a millionaire in 22 years.

BUT the dividend + bonus is average at 8.5%pa - -> so RM200K ASB will grow to RM1 million in 20 years.

You are a FUTURE MILLIONAIRE

owh yeah... silly me

Thanks for clarifying for me.

if you didn't touch the div+bonus for every yr..then only you can get that figure. some, or maybe many of those who took asb loan will use whatever div+bonus earned for last year to pay the annual/monthly asb loan for the current year..

in the calculations, people usually forget to i) compound the dividends, and ii) add back the principal (after all, you repay the loan, not just the interest portion right? so the principal after you finish your term is yours).

usually they find that after adjusting this the difference is hugely positive.

---

Added on February 15, 2012, 2:03 amlike this.

after you repay the loan (20 or 25 years), do you give back the 50k in the account you loaned, or you keep it? of course you keep it. you add this amount to your dividends.

if you dont add it back, it's like as if you finish paying off your housing loan after how many years then you have to give the house to the bank. dont confuse the loan repayment and the interest portion.

This post has been edited by empyreal: Feb 15 2012, 02:03 AM

Sesiapa yang berminat nak invest and apply : ASB loan or Unit trust , do contact me at nurulaqmarmohed@yahoo.com..

Guys... kindly advise blur case here...

I am helping my friend to seek answer for ASB @ 200k for 20years loan..

1. Which bank has the lowest interest rate ?
2. If settle full loan early any penalty ?
3. If pay upfront 1year lum sum & let dividen cover next year loan & so on..
Is this a good idea?
4. Can this act as an insurance? If anything happen .. his family will benefit..

Many Thanks in Advance...

Yes, the family will get full amount i think from what i read.

only bumiputra is able to apply right ? then there is total no chance for us chinese and indian right ? no ?

nama pon ASB - Amanah Saham "BUMIPUTERA" ..so for bumi only~

Thanks guys for the advise...

another thing.. do he get to keep the ASB blue book ? or bank keep ?

*tagging for future reference.

Its ok bro
U can apply under ASN or AS1M if i m not mistaken

you keep the book, but the loan amount is not stated in the book. Bank only give a letter or certificate mentioned about the loan amount.
Only after the full payment made or after u surrender, bank will put the moeny in to ur asb account/book.

but the dividend every year will go in to ur account

among this 3 banks, which one has the best package?
I saw both CIMB & Maybank offering BLR(6.3%) - 1.65% = 4.65% whereas RHB offered 4.95%.
But read there are additional charges impose by Maybank hence CIMB would be the best options?

Hi Guys,

Appreciate if someone can feed me in determining the rough figures that I will manage to get if I terminate the loans after 2years(200k with Maybank). Excluded the divident..

Thanks

ASN only for Bumiputra, ASN3 only for all Malaysians.

Info,
http://www.asnb.com.my/english/asn.htm

This post has been edited by adolph: Nov 21 2012, 02:13 PM