anybody know the rate for this loan from maybank/cimb/rhb? anybody have the monthly payment for this?

For Maybank the loan rate is 4.20%.

let say maybank branch kl, the rate is 4.2%. If you go to other maybakn branch, say in johor, is the rate is still the same?

I am still blur about ASB loan until now wether it is worth to take or not. I have read many books regarding investment such as Rich dad poor dad and from Azizi Ali (millionaires planet). Both of them never recommend to borrow money to invest because of bank interest. Should I listen to both these millionaires guys about no to borrow money to invest (ASB loan) or any one can tell me wether this advice is wrong or not?

One thing, I had read somewhere in the website (forgot where already.. ) regarding comparison between self saving and loan about this asb. The study was written by someone (officer) in Maybank for comparison. From her study, self saving every month will always outperform the ASB loan in term of nett profit because of no interets deduction and it is nett. She never recommend to take take a loan for ASB as it is not worth it. If someone cannot commit to save every month for saving then why he/she able to pay monthly debt (loan)? Any idea is it correct or wrong?

Just asking...

i am taking asb loan for 40k last year .. just started paying Jan this year.. at the time , already got the 2008 dividen (not sure how much coz it accumulate with my ASB cash) .

paying rm440 p/month based on BLR - 1.25 (at the time BLR rate is 6.75) ... its reduce to RM416 p/month started may 2009 (new rules from Bank Negara , payment automaticly adjust based on BLR).

I am also thinking many-many times before taking an ASB loan. Its actually OK, if the ASB dividen maintance at 7-8% with BLR lower than 7%. But, we look from the other point.

Loan is always a loan .. its dont care if we used it for investment or for spending. The bad things is our next loan application also calculated the ASB loan, thus for the bank our income is become thin then our loan offered should be less. I am lucky since got a cash to redeem the ASB loan, maybe after 2 years or depending on the dividen given this year

wow....i tot this ASB loan is so simple but when i read all the comment and case studies it is not that simple anymore....
from what i understand
Loan(100000) ASB Interest8%(8000) Bank InterestBLR5.55-1.25(4300)

so Profit(8000-4300=3700)

so basically i will get 3700 for free every year right?? but this is not the case after i read all your comments...so where is the flaw in my calculation

you have to payback the principal
if you want a calculation like that, go for ASB O/D.

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Added on April 29, 2009, 2:35 pmyou read wrongly la,
buy house = take a loan
azizi has a book property
rich dad too

key word here is leverage..

a question i ask my friends

if someone is willing to lend you 1 million, with 200% interest per year, would you take it?

the answer is it depends on whether i can put the 1 million and get 300% in profit.

leverage.

borrow from lower rate, put in higher rate, get the difference.




This post has been edited by ttwangsa: Apr 29 2009, 02:35 PM

I dont know how they guy from the other forum calculate, but im pretty sure its wrong. ASB loan is like a housing loan right? It is reducing balance and not like a car loan/hire purchase.

Please correct me if im wrong. I remembered there is a blog somewhere he did the same calculation as what mooze quoted, after a few months he corrected his calculation and say is better to get a ASB loan.

That aside, consider this:
RM100,000 ASB loan with current BLR rate for 20 years.
RM100,000 x 8% (conservative) for the 1st year = RM8000
Payment for the year = RM620 (today's rate) x12 = RM7440

Ofcourse u only get extra RM560
But use the RM8000 from the 1st year to pay for Year-2
That means your year 2 is free. Do the same for next year and keep on doing that. After 20 years, with just RM7440 you get RM100,000 free.

Summary:
1. First year pay RM7440,
2. Use RM8000 from prev year's dividend to pay for next year.
3. Repeat step 2 for the next 19 years.

i guess the post was posted when BLR was 6.75 and abs loan rate was BLR + instead of BLR -
so
at BLR 6.75 + 0.5 compared to ASB return of 7
obviously its what you would call a "bad debt" debt that makes you poorer.
borrow 7.25% get return 7%

but at the current condition
most ASB loans are BLR -
BLR - 1.56 i think for CIMB
anyways
5.55 - 1.56 is less than ASB return (less just call it 5% because economy is very bad)
so
its still profitable.

put it this way
if you buy a house, you take a loan
down payment + all the legal docs = RM 500
you pay the bank 500/month,
the rent is 550/month
would you take it?

same goes for ASB loan.

you get 7% out of RM 200k per year

if in doubt
just fire up your excel sheet and do the calculations yourself

there is a talk of mixing asb loan and OD....can u explain to me how does that work...i mean why does it gives you more profit?

i guess
O/D's concept is like this

using your already existing ASB account, mortgage it to the bank
you only pay the interest (BLR - 1.25 for CIMB, 90% of face value)
every year you get the dividend from your ASB
its like renting a house for RM 500, and re-renting it for 550
the house won't be yours

asb loan,
you take a loan to get your ASB
you have a fixed amount to pay,
this is like buying a house and renting it,
per month basis, this pays less than ASB O/D
but it all becomes yours at the end of the loan period.

i guess its all leverage and
which one is more profitable depends on a few things
like how big is your current ASB account size,
how well do you THINK this year's payback will be,

basically you can even treat your O/D like an ASB loan,
but not vice versa
i guess that's why the rate for ASB loan is better than O/D.

i'm not sure if this answers your question or if my explanations has a few holes in them, but i hope it helps you understand.

the loan only suitable for those who dont have discipline to save money

if u can disciplined urself paying loan to banks every single month,why cant u do the same thing to invest every month into ASB???...i think this is the biggest rip off from the banks to public..i dont believe taking a loan for investment..if u have xtra money,invest...if u dont,juz duduk diam diam

Totally agree

If u cant discipline yourself, i think its better to tell ur bank to deduct a certain percentage of ur income directly to your savings account. So every month, there will be a standing instruction to automatically deduct say 10% of ur income directly to ASB. I think its better than letting the banks swallow your money through ASB loan.

Personally though, I look forward to put more money into my investment account myself..Because u get the feeling like you're paying yourself and putting more money for urself.. everytime i put more money in my asb i feel like i am getting richer. I dont feel like I am depriving myself..but that is just my way of thinking.

Auto debit is it? Will there be any extra charge? This is better I than going to a post office or banks every month

for me...if taking 100k for 20 years payment asb loan, based on repayment table MAYBANK it rm602 per month....
total for yearly payment 602x12=7224
If dividend as of 2009=7.3%...so 100000x7.3%=7300
u only have to save money to pay for the 1st year period... for 2nd till 20 years onli using the dividend to paid the installment...
no need to save money after 1st initial year u earning the dividend....n let it be for next 20 years ull earn 100k for only paid 7224+other fee...
if u have extra money always can top-up money to grow ur investment....

But that's if the dividend stays the same right? What about the BLR? If it goes up in future?

Aiyo, these people always easily get conned by bank. Go do your own calculations lah.

If you put RM 7,224 cash every year for 20 years AND if you can get 7.3% interest annually AND reinvest your dividends, your money will be worth RM 328,326.39 due compounding effect of interest. If you take the loan you will get RM 100,000 and not much else. Where does the extra 238,326.39 goes to? Ask the bank, as they will love you.

This post has been edited by gark: Mar 24 2010, 04:41 PM

The bank won't easily give you 200,000 if they gain nothing