ASB Loan? Is it worth it?

Posted by Azhar | 8:33 PM | , , | 0 comments »

Been quite sometime I did not post anything here. Been very busy past 2 months. Anyway most Malays in Malaysia been asking about this ASB Loan. How does it work? Actually ASB Loan been around for few years already. Previously the maximum loan tenure is 10 years (been a while. Was approach by the back officer last time) Only recently the ASB loan tenure been stretched up to 25 years. If you ask me to do or not to do. I would definitely say go for it. Now is the best time since the BLR is -1.65% (the lowest ever). I will show you a simple calculation below how you can make & save lots of money in ASB

Apply for ASB loan - RM200,000.00
Monthly installment for 25 years - RM1,045.00

Payment to bank (loan) - RM1,045.00 x 12 = RM12,540.00
ASB dividen 8% (average) - RM200,000.00 x 8% = RM16,000.00
Different = RM3,460.00 (your free money)

From here you can see the different amount that you need to pay and how much you are getting. Basically only the first year that you need to pay money out from your pocket. 2nd year onwards you can pay the installment just by using your dividen and on top of that you still have extra. If you have enough money there is no need to take the balance. Just keep it in ASB and for the next year rate you will be getting

RM200,000 + RM3,460 = RM203,460 x 8%.

You do the math.

Some people say 25 years is long. Why not you treat this ASB loan as part of your retirement plan. Let say if now you are 30 years old. By the time you retire at the age 55 you have RM200K++ ASB Savings + EPF (KWSP) and maybe others that you have invested in. You can comfortably live with your dividen from ASB. As long you have settle all your housing loan and hire purchase :)

So what happen if the BLR goes up? You should worry!! The BLR wont go up that fast as this will effect Malaysia economy. And what happen if ASB dividen goes down. As you can see from the trend, ASB dividen range 7%-8% annually from the past few years. It would not be such big different as it is called AMANAH SAHAM BUMIPUTRA. You can get the ASB loan from RHB & Maybank. Try look at the table and see which suits your capacity.