if the loan is a flexi one then putting the mrta into the loan is better as the effect is the same. for conventional loans then yes the interest will increase...

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Added on January 21, 2009, 2:56 pmfull flex better if u got lots of spare cash....
fix loan sometimes got slightly lower rates compared to flex, flex also got 200rm set up fee and 10rm monthly fee

This post has been edited by mouldybread: Jan 21 2009, 02:56 PM

the 10rm/month fee applies to most banks, only one i noticed was different was ambank that was charging 5rm/month. ask your own bank to be sure how much they are charging. actually 10rm/month is not much when compared to the interest that u will be charged...

normally for flexi they set up a non-interest bearing current account where whatever is in it will offset the interest of the loan account. there is no limit that u can put into the current account and normally there is no penalty even if you put alot like u described. if your current account has more than your loan account then every month the payment will go 100% into the principle thus shortening your tenure. the surplus in your current account normally will not do anything not even earning interest like a savings account so it is better to take the surplus and put it somewhere else. these are what most banks practice and there are some exceptions so u just have to check with the bank.

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This post has been edited by mouldybread: Jan 21 2009, 05:53 PM

yes it means your loan is settled. for the current account i dont think it will close automatically but its better to ask the bank themselves if there are any other T&C...

make sure there are no early settlement penalties before really settling it, usually the lockin period is either 3 year or 5 years.

This post has been edited by mouldybread: Jan 21 2009, 05:24 PM