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 ASB loan, worth to get it???

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shodan11
post Dec 15 2018, 09:32 AM

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QUOTE(wild_card_my @ Dec 15 2018, 05:25 AM)
1. Having ASB-financing as part of a retirement portfolio is sound financial strategy. There are detractors who claim to get better returns or reach their financial goals earlier and they can be right; however honest investors would disclose the pros and cons of these other investment vehicles/intruments

2. Take property property investment for example. Plenty of people made a lot of money through properties, especially when they bought theirs before and during the property-boom that took place from 2008 through a few years following that. When you compare the two, buying properties with a mortgage is very similar to subscribing to ASB units with ASB-financing. They both:

a. have their financing backed with collaterals (property vs. ASB units)
b. use reducing balance interest calculation (as opposed to upfront interest calculation)
c. have annual and floating interest rates (as opposed to fixed/flat rates)

3. The con, and in-turn the difference between property investment to ASB/ASB-financing would be that the value of the asset (the property) is not fixed. While this is a huge advantage due to the fact that properties may increase in value over time (capital gain), they can also, in-turn lose value over time (capital loss).

4. Do yourself a favor and read on arguments from investment-pragmatic individuals like icemanx and askarperang who are looking at the property-investment situation with a realistic approach. If I got them right, their consensus would be that there were bubbles in the past few years which have started to pop and would get worse over time. Property prices have decreased in some areas, rental yields (rental per annum over MV) have dropped, and lelong units are popping up everywhere with low probability of being sold. High property overhang being reported by developers, agents facing difficulty to dispose their listings, owners having to top up the shortfall between their installments and rental income, etc.

Multiple Signs of Malaysia Property Bubble V20

5. Following point (3), losing value of your property is a huge financial concern. Properties are big-ticket items, unlikely to be bought using cold-hard cash. Mortgages are taken to complete the purchase and in turn would have interest charges on the outstanding each day (daily rest). This is similar to ASB-financing, but while ASB units do not lose value, properties could and have proven to do so:

» Click to show Spoiler - click again to hide... «


6. Following point (6), when the market-value or realistic-selling-price of your property has dropped lower than the loan balance, you would have to top-up to repay the bank to dispose the property. For example, if the realistic-selling-price of your property is RM400k, and your loan balance with the bank is currently RM500k, you would have to pay RM100k (excluding other costs, like redemption fee, etc) to the bank for them to release the unit to be transferred to the purchaser
 
7. Some bid their time before disposing their properties - after assessing that they are able to continue paying their installments while topping up the difference between the installment (plus other costs like maintenance) and rental. Some purchasers are not so lucky, and are unable to do so due to cash-flow issues. When they exhaust their cash due to negative cash-flow, unable to repay their installments, and having no cash to top-up (refer to point 6) to dispose the property, the property would be auctioned off

8. But that is not the end of it. Just because the bank has started the process to auction the property, there are no guarantees they would be successful. If the property fails to be sold in the first round it would go for further rounds of auctions, each time the reserve price would be reduced by about 10%. If the winning price is lower than your loan balance with the bank (plus other fees), you would still end up being liable to pay this balance; if you fail to do so within a stipulated time you will be sued in court for bankruptcy

9. No such thing would happen with ASB-financing due to the fact that the ASB-units do not change value. At any time you fail to pay the installments and the bank force-sell the units, the loan balance would ALWAYS be lower than the RM200k certificate value. As any investment vehicles/instruments, there are cons to ASB-financing, but I am not covering that in this post.

As a practitioner in the financial industry, doing both mortgages as well as ASB-financing among other things, these points are a form of summary on investments in property and ASB through my lens.
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Very thorough information indeed. Posted at 5.25am some more. Property investment always sound intimidating to me due to lack of knowledge and capital, so in the long run ASB & EPF are the only low-medium risk investment/retirement plan vehicles for me.😄
shodan11
post Dec 22 2018, 08:19 AM

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QUOTE(buggie @ Dec 22 2018, 12:58 AM)
With this asb dividend, it brings my 2018 haul to 64.5k

This is together with asb2 dividend in 03/2018 (16k) and ASD (6.5k) in 06/2018

All from ASB loan strategy. Not a single cent lumpsum injection other than the monthly repayments for the loans. No proxy even... All from my own account

After this asb dividend, I'm looking forward to asb2 dividends this coming 03/2019, then 06/2019 for ASD.

Compounding interest is addictive!
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You are an inspiration bro..haha. Mind sharing your profile: age/occupation/education. I really look up to financially savvy people.. in this case for ASB unit holdings. I am currently restricted only 100k loan, due to lower income & commitments, possibly age too (30). Maybe next year will apply for another 100k financing as my career & income grow.
shodan11
post Dec 29 2018, 07:45 AM

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QUOTE(rekod @ Dec 29 2018, 12:31 AM)
7% return is good if you use your own 200k cash.

if you take 200k loan, you still need to pay loan interest rate right?

so let say loan interest rate is 4.58% and ASB return around 7%

7-4.58= 2.42% which is lower than FD return.

back then the average was 9%-10%.. now average is 7% only, it's possible that in the future the return is lower than the loan interest rate.

is my calculation correct?
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This is what most people will say/calculate. ASB financing doesn't work simply like that ie : dividend minus interest. Both are separate calculations. Dividend is compounding while the interest is for the loan itself, you pay while the the financing amount reduces (amortization). In the end, we should get a lot more using financing method (unless dividend goes super low or interest is >6.xx % in which you should be wise enough to terminate/cancel it).

shodan11
post Jan 3 2019, 05:01 PM

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QUOTE(HolySatan @ Jan 3 2019, 04:51 PM)
» Click to show Spoiler - click again to hide... «


if possible, I got RM200k cash
if..
rclxub.gif

Accounting & Finance belum tentu faham investment

btw some banker pon tak faham ASBF

ASBF = gain profit, less cost
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IF la kan..😅
For me, if I got 200k cash, what's stopping me to transfer that to ASB2/3 and subsequently get full ASBF 200k? Better..max ROI. Why stop.

shodan11
post Jan 6 2019, 08:28 PM

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QUOTE(debonairs91 @ Jan 6 2019, 08:16 PM)
my soft cap should be 212k only since i just maxed it last year. so how come can still fill until 300k
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My opinion.
212k is your total ASB units - 100k loan + 112k cash units.
Your soft cap is much higher 212 + 90k = 302k.
Reason being; you must have made previous transaction(s)/withdrawal(s).
Of course if that's the case you can take another 90k to fill it up to the max.
shodan11
post Jan 6 2019, 09:06 PM

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QUOTE(debonairs91 @ Jan 6 2019, 08:50 PM)
but my asb never maxed before last year. only thing i can think of for the increased soft cap is it's old account because it's opened like 25 years ago
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Maybe what you meant by max is 200k? As if currently reached 212k this year.
With your account already aged 25 years ago, likely the soft cap has increased way higher due to your previous dealings, after all you also have existing 100k financing as well. Then 212k is not your soft cap.
We wait for sifus to explain.🙂


shodan11
post Jan 17 2019, 01:34 PM

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QUOTE(wild_card_my @ Jan 17 2019, 12:50 PM)
Just thought I'd share. This conversation took place today. It used to be that it took 10 days for this bank to cancel and redeem all units, but now it takes 17 days, the delays may be attributed to most people cancelling their loans this month after the dividends. Still acceptable compared to other banks.

user posted image
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So, for refinancing ASB loan, how long the new bank offer will stand (after all approved with 4.85% interest) cause you know..that certain bank is quite slow to process my existing ASBf cancellation.

shodan11
post Feb 1 2019, 09:33 PM

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QUOTE(haziqnet @ Feb 1 2019, 05:55 PM)
35 years loan only applicable to those who age between 18 to 30 years old. Max age is 65 years old. Therefore if ur age is 32 than your max tenure is 33 years.
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Hopefully other banks will follow suit. Competition is good.

shodan11
post Feb 2 2019, 02:42 PM

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QUOTE(zeronuker @ Feb 2 2019, 07:29 AM)
Hello everyone.

So I cancelled my MBB ASB Loan at Branch A on the 2/1. I called Bank A again to ask for any updates, said it'll take 4-5 months doh.gif

I called Branch B (the Branch where I actually took the loan) later on and they said they already submitted the paperworks for cancelation to ASNB on the 7/1. They also said Branch A was lying and it'll only take at most 1 month to process.

Its 2/2 now and my ASB Loan account showing outstanding payment already. I know I'll have to pay but I wont. Not yet anyways since I was told there's some grace period. Is this true?

My worry is that they wont give the principal till I pay the outstanding. I'm also worried that if I pay the last installlment, they wont give back the principal portion of it.

Anyways to solve the situation I'm in? Presistenly Calling MBB Branch B doesnt seem to work    wink.gif
p.s. Last time I will ever deal with MBB on any loan. Not efficient at all. At least at both these branches. Sorry to any MBB agents here.
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Your case is similar to mine though I took ASBf from a different bank. I too cancelled my loan on 2/1 in KL (took initially at my hometown), the KL branch told me it could take months.

I did follow up at HQ (different from both branches) to know the current status; told that still in validation and the process should end on/around 13/2. Waiting now, if still no progress well.. ready to mengamuk😆

Not sure about your concerns, but I'm think you will get back all your principal payments.

This post has been edited by shodan11: Feb 2 2019, 02:44 PM
shodan11
post Feb 3 2019, 01:52 AM

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QUOTE(Nama saya Amad @ Feb 3 2019, 12:19 AM)
Lemme tell you something. They purposely hold your loan to 'manage' the asbloan selloff.

Go bark to the branch, tell them you will report to pnb, hq and bank negara. They will kecut. Trust me.
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Can elaborate further on 'manage' the loan selloff?
Think I'll only deal with the HQ since the cancellation already 'in validation' as in the system.
Not long now..around 10 days until 13/2. We shall see lulz.

shodan11
post Feb 12 2019, 12:32 PM

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QUOTE(Bora Prisoner @ Feb 12 2019, 09:56 AM)
it seems this thread has gone up to 200+ pages because a lot of people keep repeating questions when a little effort to do some research can help get their answers.
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Just wait for the December-January frenzy. Same repeated topics on loan pros/cons and calculations.
shodan11
post Feb 14 2019, 11:07 AM

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Hi everyone..

So I did my ASBf cancellation from CIMB on 2/1/2019. Checked with them earlier this month..told should end on 13/2/2019. Today (14/2/2019) the loan amount still there as viewed from Clicks.

On leave today, so I will check again. If they come up with some BS excuse where do I complain? HQ, BNM, PNB?

For sure I will withdraw my saving account to a mininum so it wont autodeduct next month.
shodan11
post Feb 23 2019, 09:31 AM

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QUOTE(syumul @ Feb 23 2019, 09:15 AM)
hello.
do your loan settle already?
my case same as you.

cancelation was made on 8/1/2019 and up until today 23/2/2018 still the current loan amount is in my asb.
bank rimau buat kerja lembab or that the timeline to cancel the loan?
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Not yet..last week checked again with CIMB and told still in validation with PNB. PNB yet to buy back the certificate.

Since bank rimau also experienced the same, probably the hold up is due to PNB part. Dunno la..very frustrating & can only speculate.

shodan11
post Feb 23 2019, 09:59 AM

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QUOTE(syumul @ Feb 23 2019, 09:49 AM)
The most frightening case would be they zero-ed out my asb acc end Feb and re-invest back top Mar.
Gone 2 month sweet dividend bangwall.gif
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Lulz..very true. Then GG already. Secretly hoping the loan account zeroed on early next month instead of Feb since already at month end.

shodan11
post Feb 25 2019, 09:26 PM

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QUOTE(syumul @ Feb 23 2019, 10:54 AM)
Yup. In that case you're right.
I thought your own ASBF cancel and reapply back.

As my case, whatever happen, i still miss out one month dividen. Maybe (hopefully not) two month dividen. vmad.gif
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At last, my ASB loan/cert is no more..checked this evening, only left with cash units.
Now to proceed to refinance asap with lower interest rate, hopefully will disburse before Feb ends.
shodan11
post Mar 1 2019, 07:05 PM

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QUOTE(Adamant @ Feb 27 2019, 01:08 PM)
Hi everyone.

I am keen to get an ASB loan.

Just checking if any of you has compiled the latest ASB rate from most if not all banks that offers ASB loan.

I tried calling some of the banks, but none seems to be picking up their phone. Abit challenging for me to visit bank branches as there are not many around my working area in KL.

Looking forward to get some guidance from you guys!

Thanks!
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Have you applied for one yet?

I believe the lowest rate available is 4.85/4.90 (got mine disbursed yesterday) with 4.85 from HLB.

Affin is 4.90, RHB 4.90, CIMB 5.0/5.1. Maybank not sure..possibly 4.90 too.
shodan11
post Mar 4 2019, 07:48 PM

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QUOTE(Adamant @ Mar 4 2019, 07:38 PM)
Can share abit more about which bank you've decided to go with and why? As always, when it comes to taking up loan, takut ada udang disebalik batu.
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As above..Hong Leong. Why? Always choose the lowest interest with no lock-in period & optional takaful. HLB just happened to offer the lowest interest that time. Not sure now..maybe already 4.90.

Lucky got disbursed on time, so I only lose on 1 month dividend. Previously was with CIMB in 2015, full takaful. Interest shot up to 5.45% 😶 so decided to pull out after 3 years/cycles.

Now with starting lower interest and min takaful (5 years on first 100k), I have the option to terminate in <5 years and refinance back on full tenure ( lucky still 'young') with whatever lowest interest in the future. Continue abusing the system 🤭

This post has been edited by shodan11: Mar 4 2019, 07:49 PM
shodan11
post Mar 4 2019, 11:53 PM

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QUOTE(Adamant @ Mar 4 2019, 11:25 PM)
When you mention Takaful, are you referring to ASB loan using Islamic loan? not really sure what you mean. I think for a lot of bank, insurance on asb loan is optional. Even Maybank staff mentioned that they can waive the insurance requirement.

Really appreciate your input buddy.
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I was referring to ASB financing (shariah-compliant version of ASB loan). Takaful (insurance) is to cover the financing (loan).

Yes, now mainly banks offer optional takaful/insurance for ASB financing/loan. Just make sure to be fully clear on your goals in this investment. If you're in for longer time, maybe it's wise to get some takaful/insurance cover on full/partial loan amount. Or just take third party term insurance/takaful which is fully owned by you (policy owner).

For me, I took 5 year takaful on 100k amount (even though the loan/financing is 200k full tenure 30 years) - because I wanna get that 4.85% interest (4.90 without takaful) and I plan to terminate within 5 years and reapply/refinance to maximise ROI.
shodan11
post Mar 5 2019, 03:39 PM

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QUOTE(Adamant @ Mar 5 2019, 12:53 PM)
I actually intend to do the same. RM100k loan, for 5 years tenure without any insurance / takaful. So far, Maybank is offering 4.9% on it. I will check HLB on their rate. Hopefully can match yours @ 4.85%. The 0.05% is quite marginal actually, not much impact in terms of cash flow and value after 5 years. Yours takde lock in period kan?
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Yup..no lock in period as per offer letter. Personally I also agree the difference is quite marginal but learning from this thread and using financial calculator estimate that for every 0.1% interest on 100k loan, we're paying extra RM100 yearly. However if 4.90 is the lowest available just take it I guess.✌

shodan11
post Mar 5 2019, 06:36 PM

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QUOTE(Bora Prisoner @ Mar 5 2019, 05:55 PM)
100k loan, and for 5 years?

it's been discusedd many times that to really take advantage of ASB loan you should go for max (200k) and prolong your loan term to 30 years (or as long as possible).

but of course if you have different plans ...
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For me, the plan is to terminate after 5 years, that's why min 5 years takaful on 100k. And.. I did take another 250k life takaful (independent) as personal live cover concurrently until age 70. Just in case.

This post has been edited by shodan11: Mar 5 2019, 06:37 PM

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