Hi guys, am new to the forum, but am actually a banker with experience in ASB loan. Please feel free to ask any questions and will try as hard to answer.

For your questions Tradefameplz:

Q1: Why max tenure and why not shorter tenure to pay less for the loan.
A1: Most people are in the ASB Loan/financing game only for 3-5 years. So might as well pay lower installment because you are not going to serve the full tenure. You will still receive same dividend although it also means lower principal balance when you cancel the loan. Short term game, you will save more if you maximise the tenure.

Q2: Why cancel in 3 to 5 years, would it be better to settle off the loan.
A2: Depending on the goals of getting the loan in the 1st place. If you have a long term goal, go for long term or settle off the loan. If you plan to use the money in 3-5 years and is using ASB Loan for the means of saving, you cancel it in 3-5 years. In ASB Loan, you earn from Dividend and Principal Balance.

Q3: When to apply and when to start paying
A3: ASNB will calculate dividend pro-rated monthly. To get a month's dividend, the ASB Cert tied for the loan must exist from the 1st to the last day of everymonth. Saying this, ASB will reopen on the 2nd January, meaning the earliest your certificate can be purchased is on the 2nd January, hence you will not get January' s dividend for next year.
Apply now, ask the banker to hold until the said loan 1st installment begin in february.

This post has been edited by muchabi: Dec 28 2017, 01:59 AM

When u cancel the loan, the bank will sell back the collateral which is your Asb cert. With the money they will settle your loan and give u back the difference.