Guys I just did a calculation, much to my surprise..

based on this: Maybank ASB Financing-i

Let's say that I took a 30k ones with 25 years of repayment schedule which is 176/month for 25 years

Using ASB Loan

Monthly = 176
Yearly = 2112
Total = 2112x25 = 52,800 (goes to Maybank)

Assuming that ASB dividend is 8% for 25 years

Total = (deposit=30k) + (dividend=175,454)
= 205,454

Nett total = 205,454 - 52,800(goes to Maybank)
= RM152,654

Putting 176/month for 25 years

Monthly = 176
Yearly = 2112
Total = 2112x25 = 52,800(goes directly into ASB)

Assuming that ASB divident is 8% for 25 years

Calculated using this Online Calc

Nett Total = (deposit=52,800) + (dividend=108,290)
= RM161,090

Using dividend to pay installment

Monthly = 176
Yearly = 2112
Total = 2112x25 = 52,800

Assuming that ASB divident is 8% for 25 years

Dividend per year = 8/100*30,000
= 2400

Profit = 2400 * 25
Total = 60,000 + 30,000
= 90,000

Nett total = 90,000 - 52,800 (goes to Maybank)
= RM37,200

Summary

Basically you lose = 161,090 - 152,654
= RM8436 if you use the loan instead of putting 176/month for 25 years (assuming that u put it regularly)

U lose even more by using the dividend to pay the installment

And this is assuming BLR is the same for 25 years, which is impossible..
Also assuming that dividend is 8% flat for 25 years

Point me if I'm wrong cause I still can't wrap my head around this, how that we're blatantly lied to..

Sorry for the long post

pnb calculate dividen per monthly balance and inject them on january, u need to recalculate. if u choose to pay the loan with dividen, better pay monthly basis to optimize the profit

ASB is a good option for bumi .. over the years, it never give divident below 7%. Most of them in 8-9% since last 10 years.

Based on my calculation (and realistic, 7% divident average for next 25 years), loan RM200k for 25 years will make you a millionaire once the loan finish. Of course, no withdrawal and keep paying +- RM1200/month (threat it as saving).

Year Amount Dividen Amount After Dividen
1 200000.00 1.07 214000.00
2 214000.00 1.07 228980.00
3 228980.00 1.07 245008.60
4 245008.60 1.07 262159.20
5 262159.20 1.07 280510.35
6 280510.35 1.07 300146.07
7 300146.07 1.07 321156.30
8 321156.30 1.07 343637.24
9 343637.24 1.07 367691.84
10 367691.84 1.07 393430.27
11 393430.27 1.07 420970.39
12 420970.39 1.07 450438.32
13 450438.32 1.07 481969.00
14 481969.00 1.07 515706.83
15 515706.83 1.07 551806.31
16 551806.31 1.07 590432.75
17 590432.75 1.07 631763.04
18 631763.04 1.07 675986.46
19 675986.46 1.07 723305.51
20 723305.51 1.07 773936.89
21 773936.89 1.07 828112.47
22 828112.47 1.07 886080.35
23 886080.35 1.07 948105.97
24 948105.97 1.07 1014473.39
25 1014473.39 1.07 1085486.53

i did it using the calculator in the link with monthly balance increasing and dividend injected annually..

What happen if the BLR suddenly increased? u could be at risk of losing the money rather than making it. a lot can happen in 25 years..

u can always terminate the loan if there's no lock in period or lock in period finished am i rite

Not sure about that la. if terminate then they sell the cert rite?

the amount u paid i.e. installment + dividend = yours

the rest they take back

See this

With loan

Month by month

Also you can install Financial Calculators app for Ios, Android or Window phone. Just input your figure, the app will lay the result for you. Even with monthly table.

For me, the best way doing the asb loan is cancel & reapply the again in 3 year. You will get extra $$ beside the dividend.

Regardless of the app, anything wrong with my calculation?

So, taking the loans, and pay monthly until the end of 25yrs gives you more?

Thought you already decided not to take asb loan...

Answer to your question is no. Use own money is better.

actually you are neither right or wrong

there's a risk of increased BLR, or reduced dividend, or a combination of both

if all variables remain static, you earn approximately 1 - 2% more with ASB loan than using your own money

depends if the 1-2% is worth the risk to that individual

Yup, I know but simple calculation based on present rate using own money still more $$ compare to loan.

But I myself still prefer loan compare to using own money. I can gain $$ with loan

or you can leverage your cash reserve by converting it into loan and use the cash for other investments instead.

Yes I do, but every now and then, people keep on insisting that by loan, you'll gain more. Still saving own money into my ASB though.

Ok..

You must understand with asb loan before you take it. It not simple as asb dividend - loan interest = gain. You must understand with term principal, interest, dividend & compound dividend.

Asb loan is not similar to personal loan or car loan but it more toward to house loan (each installment will reduce the principal)

And please do not served the loan till end of tenure, you will lose lot on your capital gain.

One of the method already shared by Masta Lucifar

yes sir, u are absolutely right..it has been discussed extensively in the other forum. i've done it..200k loan and i then terminated it on the second year. and my gain was more or less the same as the amortized amount..

dont forget that u will get approx 70-75% of gasbritt surrender value.

all in, my yearly roi was around 25% way more than 7-8% if u save urself

I'm thinking to buy a house first(RM100K++) then involve in asb loan. Bcoz if not, I need to settle down 2 loan at a time and don't have money to treat my family.

This post has been edited by mhisyam6: Jun 21 2013, 09:50 PM