Due to the availability of a variety of home loans, owning a house is getting easier these days. In our country, there are 3 major home loans available namely basic term, semi-flexi or full-flexi. For those who apply for this type of loan for the first time, here are some useful information to help you choose which will suit your needs best.
1. Basic Term Home Loan
As what the name implies, this is the most basic and the strictest type of loan. The repayment schedule is fixed and you have to pay the similar amount of monthly repayment throughout the whole loan tenure. Usually, extra payment is allowed to reduce principals depending on the bank to whether take your request into consideration or not. The inflexibility means any advance payment you make will not affect or lower your home loan interest. Instead, it will be considered as pre-payment for the upcoming months. However, you are not allowed to withdraw the extra amount if you need it for future use.
2. Semi-Flexi Home Loan
In semi-flexi housing loan, the bank allows you to withdraw the extra amount but you will be charged processing fee for each withdrawal, which is between RM10 to RM50. This amount could vary from one bank to another. Whenever you make any additional payment, it helps you to decrease the amount of principle loan and the interest you are being charged. Anyway, you have to notify the bank in the first place. On top of that, certain banks also place a limit on the number of withdrawal per year.
3. Full-Flexi Home Loan
Very much similar to the semi-flexi housing loan, this 'flexi loan' enables any advance payment to reduce the total loan interest right away. This way, you are able to withdraw these payments without having to inform the bank. In most cases, the bank will provide borrowers of this type of loan with a loan account that is linked to an additional current account with a chequebook. In order to reduce principals, you can make extra payment by depositing either through loan account or current account that will be synchronized. To maintain the current account, you will also be charged a fixed monthly fee.
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