i suggest u use this to calculate;
http://download.cnet.com/Home-Mortgage-Cal...4-75326943.html

it is for home mortgage but it is the same principal(reducing balance loan). U just calculate with 25 years loan and check when u terminate at 5 years.

You only have to pay back the balance of the loan( the bank will forfeit the ASB certificate but will give you back the principal amount)

For example,
Scenario 1: Take 200K loan(1169.18 per month) for 25% years with 5% interest(assume constant) , ASB dividend assume constant at 7.5%
-U terminate the loan after 5 years. U will get 109,965.50 (dividend and principal given back by bank)
Scenario 2: Credit 1,169.18 to ASB every month for 5 years. ASB dividend assumed to be constant at 7.5%
- U will get only RM84,797.24 at the the end of the 5th year.

The difference is a staggering, RM25,168!!!

Risk: BLR could increase and ASB dividend decrease which is unlikely as historically, Dividend increase with BLR, heck even FD rate increase with BLR.

This might be shocking to uninformed investor, but the reason you can get this amount is because the dividend is re-invested, which is the case for ASB.

This post has been edited by backspace66: Jan 26 2014, 01:25 PM

I am looking for longer term result. Since i get BLR-2% so plan to keep it. I also don't know how long im gonna work with this bank..

So,terminate-after-5-years thing is the best way?
Does it work for every bank that offer ASB loan?
No penalty for terminate? Sorry if too much asking

some have lock in period. Maybank for example have a 3% penalty if terminate the loan in 2 years. After 2 years no penalty.

current maybank asb loan did not have the lock in period ... last year i took the loan without the lock in period

Loan ASB Maybank Islamic dont have lock in period. Conventional not sure. How about CIMB?

As of Dec 2012, my loan also is promised with out lock in period. Maybe to attract investors?

+1 Solid calculation with neutral opinion.

This is my take on ASB loan:

It is not a must but if you are not taking the loan, you MUST save your money in ASB. The simplest mistake is you dont want to take the loan because of risk and "hukum hakam" but you let your money rot in the bank.

My preference is to save in ASB to gain modal a.k.a bullets for other investment. Paper investment will no get you far.

RHB does have 2 year locking period but with a slight lower interest rate compare with Maybank & Cimb.

Also if you intro others to loan with RHB, can get $$$ commission from RHB.

It is worth it ? For sure! U just need to maintain 1 year, then after 25 years u will get RM200,000.00. Here my simple calculation :

ASB Loan : RM 200,000.00 x 25 Years

Monthly repayment : RM 1170 x 12 month = RM 14,040.00

Dividen 1 Year : RM 16,xxx (Depend the rates and bonus, BUT never drop below tis value)

So, i just need to maintain 1 Year. After dividen is paid out the next year, i just used my dividen to pay the next year monthly repayment PLUS getting a pocket money RM2,000 every year.

So, after 25 Years - I am getting the RM 200,000 plus RM 50,000 (If i kept the RM2,000 extra) with just startup capital RM 14,040. Due to this system, i wanna open at least 5 or more account. But they limit RM 200,000 for each person. Therefore now i only have 2 account (using my name and wifey) . Waiting my kids to reach 18yrs old. Confirm will open an account for them.

Trust me, if this system open to non-bumis - CONFIRM the queue line up will be from Perlis to JB. Period!!

I wanna ask 1 theoretical question:

Lets say if I took an ASB loan of RM 100k for 20 years, if I terminate it during year 10 which is halfway, will I be entitled for 50% of the certificate value, i.e. Rm 50k that will be disbursed back?

TQVM

Mad, dont confuse between ASB loan and ASB certificate.

After 10 years of payment, you have to check how much principal left to be paid to the bank.

But your certificate, will always be 100k. <== Correct me if Im wrong as I never cash in the cert.

Sorry bro yugimodo, got it mixed up. In that case, what will happen to me after terminating the loan:

1) the insurance paid will be recouped?
2) any penalties if I pay beyond the lock in period?

TQVM

This post has been edited by /AxmaD\: Jan 29 2014, 02:45 PM

I have yet to terminate my loan but what do you mean by paying beyond the lock in period plz clarify.

Lock in: A period where you promise to pay bank 3% if you terminate your loan early.

Ahh, thanks for the correction, didn't realize I used the wrong word.. Hmm, in that case, seems like CIMB is the best with up to 30 years and no lock in period..

Yes check with maybank got lock in period.

r u sure ? which branch ?

usj

my asb loan from maybank islamic did not have the lock in period..
i applied in bangsar

for your info, asb loan by maybank islamic have no lock in period
asb loan under maybank conventional will have 2 years lock in period...