Wow, quite a lot of questions there. Will try to address it. Please ask again if I've missed out something.

Firstly, Congrats as you have taken the first step by asking. If you've just graduated then you should be 23-25. And look like your parents are smart people and have the foresight to apply the loan for you. If they applied when you were 18, then you would be 5 years in. Is the loan under your name or your parent's name?

Should point out a couple of things here. First, don't settle this ASB loan. We want to take advantage of OPM. At your age, you should always make sure that the loan is at max tenure all the time so as to minimize your monthly payments and get back the ammortized portion. Secondly, if you're going the 'rolling dividend to pay next year's loan' route, don't ever pay annually. You will lose out on the compounding interest. You wanna pay as late as possible, just after they lock in the interest for the month. Also, interest on the loan is probably lower that what you are paying now so you should terminate and reapply as soon as possible. And when you reapply, go for the max tenure here again. Don't worry about the never-ending tenure. It is a non-factor here. Totally ignore it.

If you're rolling the dividend, at the end of 30 years, you would only have 200K. This ASB loan tool has so much more potential than that!

Since you have monthly wages now, and if you can afford RM 1,000 per month and assuming the banks approve your loan, I suggest you don't touch your dividends and let it compound. Here is what I would do if i were you If the current loan is under your name). Terminate the current loan very early in the month and get back the ammortized value. If the loan is already 3 - 5 years, you should get back RM 3k - RM 5k plus some insurance premium back as well. Do with this amount what you will or you can start your ASB2 with it. Immediately reapply your loan and push the banks to disburse the amount into your ASB within the same month! (cannot stress this enough as it will effect your dividend and your bonus dividend)

Keep paying the monthly from your salary and don't touch the dividend. After 3 years terminate and reapply to get back the ammortized value and take advantage of the bank's competitive rates. Again, timing is crucial to make sure that they put in the money in the same month you terminate. Rinse and repeat every 3 years.

Ok i'm gonna be your fortune teller here... barring any unforeseen circumstances. After roughly 10 years, you would have earned 200k in dividends. Free to do as you will! From here on, you will be earning dividends on 400k (200k cert + 200k cash dividend). Plus if you terminate/reapply every 3 years, you would have additional 10k

If PNB still limit loan size to 200k, and your salary in the last 10 years probably would be substantially more, you can start your ASB2 loan. Sooner even if your funds allows it. For me at the time, PNB allowed 400k loan so what i did was took out that earned 200k dividend, transferred to ASB2 and applied 400k loan on ASB. So earning on 600k yearly. Then when the banks allowed loans on ASB2, I applied the 200k ASB2 loan and transferred the 200k cash to ASD, now earning dividends on 800k (400k ASB; 200k ASB2; 200k ASD). Of course during that time all of them were earning dividends for me so now I'm close to earning dividends on a Million yearly. More when it compounds.

As I've mentioned, we don't know maybe PNB will open up again so you need to be ready for when that happens. So you should focus on this medium-term goal. Once you reach that 10 year mark, reevaluate your position. The financial climate and landscape might be different then so no need to look too far ahead. Sometimes planning too far can be a liability or a hindrance as it closes your mind to possibilities as you are too focused on a target in front of you that you fail to see what's to your left or right.

To quote you, "I see myself here at an advantage to maximize returns and getting early capital gains". This is very matured thinking and hats off to you for having that early realization. Youth is your main asset here.

No need to thank me Bro. 10 years from now when you've earned that 200k in dividends, just belanja this old man a teh tarik ok? Haha. We can discuss your next steps...

Somehow I missed answering this question. I'll revisit this because I think it's important.

If you're going down this route, which is to let the dividend pay for the next year's loan repayments, you should never take out at the start of the year and pay monthly. Firstly, there is a risk that you will overspend the dividend elswhere! 

Secondly, Since the more you have in ASB the more dividend you'll get, it makes economic sense to leave the dividend in there as long as possible and only take out when you need to pay to the bank. Meaning, go to the bank every month, ideally the first working day of the month take out 1,xxx and pay your loan for the last month. Leaving the rest in there to earn you dividends.

But again, let me stress this. Although you get free money at the end of the tenure of 200k you shouldn't limit yourself. If you pay monthly from your salary without touching the dividends and let it compound, at the end of 30 years you'll get roughly 1.4M! and you've paid roughly 360k for a nett gain of 1.1M.

1.1M - 200k = 900k more!

That's 1.4M in cash buddy, you can let it rain! 

A lot of people drive a big car/big house but in their bank accounts cannot even buy a used kancil cash...  haha... sorry trolling a bit.

Very sorry to hear about this. Did you explain to them systematically and methodically? Showing them facts and figures? Also you have to address their concerns.

What was their concern anyway? You mentioned the biggest issue was risk. What is the risk they are concerned about? Also, why do you need to queue up at the bank every month?

Concerns with dealing with the banks and low amortisation? That's almost a non issue to me. Like anything else in this world,  set a plan and execute it. Sometimes things goes according to plan, sometimes things don't. When they don't, you learn from it. If the bank delays and don't get it done in the same month, you will not earn as much but still more than the current system you're using of rolling the dividends.  As for amortisation, it's fixed and there's a schedule the banks follow. Also a non issue here. You will get back what was discussed earlier.

Well anyways, the system discussed was to  compound the interest, pay from your salary and terminate and reapply every 3 years right? Well since your dad agrees with compounding and paying from your salary, then the only thing is the terminating. No biggie. It's only about 10k in 10 years. So you just lose out on 1k per year. Just do the compounding then.

Laid off from work? Firstly, it ain't that easy being laid off from work in our current labour laws. That's why non performing staff usually gets the 'freezer' instead of being laid off. So unless you're stealing from your company, this is also a non issue. If you've got a job, work at it 100% and work your way up. Trust me,  paying off 1k a month later will so much easier then now. But in the off chance you do get laid off, there is still no risk...  Just terminate the loan. Or if you don't want to terminate, then just go back to what you were doing before...  Pay from your dividends and retain your loan. The reason why this asb loan is such a hit is not that it is low risk.... It is NO risk!

Security vs maximising gains? The old adage goes....  Low risk, low returns. High risk,  high returns. That still holds true. But not for this loan. Here, it's No risk, high returns. Dude, trust me... There is no security issues here. Inflation? What's the inflation rate and how much are dividends? You can immediately tell from the figures. But even if inflation is higher than dividends.... Asb is still one of the highest returns you'd get. You need to change the government to lower the inflation... Lol

Either way, at some point in your life, you need to take control of your own finances. To me, that starts when you start earning your own money. What's stopping you from doing this if you truly believe that it works? Your parents wouldn't know anyway what you do at the bank. In 5 years just show them your asb book and tell them... I'm sure they wouldn't mind as much.

Oh and ASB is not everything. It's just one investment vehicle. As you progress and earn more, you'll discover that this is just part if your portfolio. Theres property, mutual funds, stock markets, business,  etc.

Bro, whats the current rate now? Heard its 4.8%?
CIMB can do without takaful?
Do pm me the details, thanks.

cimb.. y u very tamak.. now need 3k asnb-v for 4.8%.. last time only 1k.. 

This interest rate change every month or year?

I believe ur monthly payment haven't changed even the interest rate had increase.

Mind to ask, how much is ur asb loan ya? U may apply for new loan (with better rate) without terminating it first. And terminate it after ur new loan got approved. It may effect 1 month dividend but there should be no problem with ur compounding flow since it based on accumulated dividend. Hope for higher dividend distribution la so can earn lebih sikit :-)