Loan Packages Offered by Bank
If you apply Mortgage loan (Housing loan) with any banks, usually you will have few options to choose the package you want.
The packages includes FULL FLEXI, SEMI FLEXI AND Fixed Loan. Banks keep themselves simple as in not giving too much options but sufficiently to the borrower, less is more.
Conventional loan is loan with Flexi packages (Full flexi & Semi Flexi) as mentioned, you can chose either one of the available option as your overall loan package at the beginning of loan application. It’s fixed throughout loan tenure when you had signed the letter offer.
Conventional loan interest rate will fluctuates according to bank’s base rate and overnight policy rate (OPR) by BNM( bank negara malaysia). Hence, when you signed 35 years loan tenure conventional loan 4.5% effective interest rate. Throughout the loan tenure, effective interest rate will be altered up or down.
Conventional loan packages as below:
Full Flexi Loan
1. It’s a Flexi loan, which means you can credit additional cash into the loan account, so that it will reduce interest charges on your loan.
| Loan A Rm500,000 loan amount.|
– Credit RM300,000 (from inheritance) into LOAN A account.
– From here onwards, interest rate 4.65% will be charging RM200, 000 instead RM500, 000 until you withdraw the RM300, 000 cash out from the loan account.
2. Bank will open Current Account for you
3. RM10 charges monthly for the Current Account fees
4. Withdrawal and crediting of your Rm300, 000 cash will easier, via ATM, Cheque, Online or Over the counter.
5. Certain bank will charge Rm200+ processing fees
6. Current account is tied with loan account, hence withdrawal or crediting of cash can do it with Current account. Hence, you don’t need to transfer the cash from current account to loan account to credit in for interest reduction or withdrawal of the cash.
7. Usually Full flexi will be suitable for business people, because they can credit their weekly cash flow from their business into the loan account to save a day interest overnight and withdraw it next day for business purposes.
1. It’s a flexi loan, which means you can credit additional cash into the loan account, so that it will reduce interest charges on your loan, example:
| 2016 Jan|
– Loan A RM500, 000 with Bank A, 4.65% interest rate
-From here onwards, interest rate 4.65% will be charging RM200, 000 instead RM500, 000 until you withdraw the RM300, 000 cash out from the loan account.
2. There’s no Current account for this
3. No maintenance fees charges
4. Withdrawing and crediting cash into account will be troublesome, as only Cheque and ATM options are allowable only
5. There’s a withdrawal fees cost for every transaction, RM23- RM53 (dependent on which banks), hence it will be costly for people who withdraws money frequently, using this package
6. When you Credit your money into the account, you need to inform the bank that the cash is for extra payments, early settlements or advance payment. If not you will be charged 1% penalty for not informing. (Certain banks policy have this)
7. This package is more suitable for people who are employees whom doesn’t have much cash flow frequently.
*The main difference is the maintenance fees charge on full flexi instead of semi flexi due to Current Account*
*The acecssibility in withdrawing the cash out when needed*
|No.||Full Flexi||.||Semi Flexi||.|
|1||Current Account||√||Current Account||X|
|2||RM10 charges||√||RM10 charges||X|
|3||Withdraw and credit options ATM, Cheque, Online or Over the counter.||√||Withdraw and credit options Cheque or Over the counter.||√|
|4||Processing fees *Certain bank*||√||Processing fees||X|
|5||Current Account tied with loan account *Certain bank*||√||Current Account tied with loan account||X|
|6||Interest rate higher *Certain bank*||√||Interest rate higher||X|
Fixed loan package
1. Fixed loan package offered only by few banks etc (AIA, HSBC… etc)
2. Your interest rate will be fixed throughout the loan tenure 10,25,35 years..
3. It has similar flexi features build in within this package, whereby you can reduce your total interest charges on your loan, by crediting extra cash into your loan account. (semi flexi, full flexi)
4. Your interest rate will be locked as stipulated in the letter offer.
Any inquiries do drop at the comment section