QUOTE(facktura @ Jan 11 2019, 01:39 PM)
So even my octopus bank rate increased to 5.35% now, but the increment is less than RM50, i dont need to refinance aite?? Can we check whats the amount need to pay now at octopusclick website?? If its already revised??
1. Yes, you can check the amount at the bank's site. This applies to most banks
, including CIMB, MBB, and RHB that I know of. the current effective interest rate (EIR) would be displayed on your respective loan's bank's websites. For example, here:
2. As to your question whether you need to refinance or not, it depends entirely on yourself. Given the nature of my business
, I would be inclined to favor one over the other. Over time plenty of people would ask me the same question, I am just going to copy-paste it:
» Click to show Spoiler - click again to hide... «
QUOTE(missboo @ Jan 12 2019, 10:12 PM)
Normally the total amount won't increase but you'll notice the principal payment would decrease.
1. This is right, when the banks do not increase the installment after increasing the rate applied to your loan
, the amount that would go towards loan repayment would be reduced, since the total interest payment is increased. Remember, when you pay your installment, it is split into 2 parts: loan repayment and interest payment. Banks will always insist that their interest (profit) is paid first, and the rest would go towards the loan repayment
2. This is very easy to calculate. The formula for daily interest calculation is: [(interest rate in %)/365] x loan outstanding
. For example, if your rate is 5.35%, and have a loan balance of RM180,000 (original loan amount is RM200k, with a tenure of 30 years, thus the installment is Rm1,116/m), to know the interest rate you need to pay of this month of January with 31 days is
2a. 5.35%/365 x RM180k x 31 days = RM818
worth of interest payment for this month. Given that your installment is RM1,116, the principal repayment made on 1st February is RM1,116 - RM818 = RM298
2b. Now imagine that you are with Sotong, and experienced a 0.1% increment of interest rate, but Sotong did not increase your installment. This is your interest payable for month of January:
5.45%/365 x RM180k x 31 days = RM833
worth of interest payment this month. Since Sotong did not increase your installment and you keep paying RM1,116, the principal repayment made on 1st February is RM1,116 - RM833 = RM283
3. Notice that RM283 (with 5.45% interest) is lesser than RM298 (with 5.35% interest), this means you would take longer to finish paying off your loan
because each month you would repay the loan at lesser amounts that originally planned. If your original tenure was 30 years, I guarantee, based on numbers, that the tenure would end up being extended.
4. I believe I have mentioned above that, if unsure, calculate
. I've done your calculations for you. Up to you all to refinance of not - it is your money, your installments to pay, your investments to grow and protect. I am only here as a facilitator.
5. Just to be clear, the 4.85% p.a. promotional rate would end by the end of this month (31st January)
. Any submissions made after that would revert to normal, non-promotional, board rate of higher then 4.85% p.a. It's your money, your call.This post has been edited by wild_card_my: Jan 13 2019, 12:23 AM