How to consolidate all your loans and save loan instalment payments?

How to consolidate all your loans and save loan instalment payments?

Pay Less Loan Instalment paymentsLoan Consolidation

Do you have a lot of loans that you are constantly paying? You may want to do a self check on your financial status whether you are in financial good health or need some planning at this point:

  • Are you still paying your education loan?
  • Are you still paying for your car loan?
  • Are you still paying for your housing loan?
  • Do you have more than 1 housing loan to service?
  • Are you still paying for your renovation loan?
  • Are you still paying for your wedding loan?
  • Are you still paying for your furnitures or electrical items in instalment payment basis?
  • Do you have any outstanding credit card loan which are in instalment payment basis?
  • Do you have any personal loans and still servicing it?

If you have more than 2 YES for any of the above questions, then you might want to consider loan consolidation.

 

What is loan consolidation?

If you have heard this for the very first time, loan consolidation is merely consolidating all your loans into ONE loan. This can be done if you have an existing housing loan or a fully paid up house.

 

How to consolidate loan?

If you have existing housing loan or a fully paid up house and the current house value may have increased based on the current market value. Hence, you could consider refinancing the house at the current market value to pay off all the other existing loans that you are servicing at the moment.

 

Why should you consolidate all your existing loans?

You may want to answer first at what interest rate are you paying for all the existing loans that you are servicing at this moment. Based on current trend, the interest rates may range from 3% per year for car loans to 9% per year for credit card’s outstanding amounts. This is not even the effective interest rates which could be higher due to the compounding interest effect on the outstanding amounts.

If you took the housing loan from the bank, you could be paying interest rate around the current Malaysia BLR at 6.85% per year. Hence, your instalment payments would be increased in tandem with the interest rates too. Whether the interest rates would increase later, that’s another worry.

Just for illustration purposes, below is the history of BLR Malaysia trend. Based on the current inflation and the weakening of RM against USD, do you still think the BLR in Malaysia will go down? As you can see the graph below from year 2000 – 2015, in the span of 5 years, BLR has increased slightly higher than 100 bp. For those of you who are serving your housing loan at BLR rate, this increase of 100 bp would resulting in extending your loan tenure for another 10 YEARS. Would you still have to work longer to service the loan?

BLR rates graph

 

So if you could sum up all the instalment payments that you are paying for all the existing loans, you could be paying very high interest rates without knowing it. In addition, the tenure for all your existing loans might differ from banks to banks, from different purpose loans, and with different interest penalty conditions.

Thus, by consolidating all your loans, you might be paying one instalment payment only and servicing only one loan with only one tenure. For all you know, you might be paying off all your current loans which you have been serving higher interest rates and be paying at one low installment payment for the duration of the new loan tenure. Moreover, we can offer you a FIXED RATE HOUSING LOAN.

 

What is a Fixed Rate Housing Loan?

Fixed Rate Housing Loan is a locked in fixed loan interest rate for the whole loan tenure. In other words:

  • Fixed instalment payments;
  • Fixed interest rates and
  • Fixed loan tenure even when the BLR goes up.

 

What other benefits does this Fixed Rate Housing Loan have to offer?

Our Fixed Rate Home Loan is flexible where you can:

  • Settle the housing loan without minimum notice period;
  • Immediate net off the housing repayments against the principal;
  • Daily interest rate computation;
  • No lock in period;
  • No early repayment penalty; and
  • Zero entry cost.

 

Which financial institution offers a Fixed Rate Housing Loan?

There is only ONE financial institution with strong financial background that is able to offer Fixed Rate Housing LoanAIA Bhd.

 

What will happen if the interest rate goes down?

If the interest rate goes down, you still can refinance your loan or appeal with the company for a lower rate. But if the interest rate goes up, your interest is still locked in at the rate when you signed AIA’s housing loan offer letter.

 

What is the condition that you should meet in order to apply for AIA Fixed Rate Housing Loan?

Refer to the following link: Terms & Conditions of AIA Fixed Rate Housing Loan 

 

Do I have to commit to take the housing loan once you submit the AIA Home Loan Application Form?

No, you are only applying for the loan.

 

What is the procedures of applying for AIA Home Loan?

  1. You have to fill in the AIA Home Loan Application Form.
  2. Scan the completed application form and all the required financial documents and submit it to klrose.chin@gmail.com.
  3. Thereafter, AIA will take about 7 working days to process your loan.
  4. Once your loan is approved, AIA will issue the housing loan offer letter.
  5. Thereafter, we will meet you to discuss on the terms and conditions of the offer letter.
  6. If you agree to the terms and conditions of the offer letter, you can sign and return it back to us.
  7. You have to appoint our AIA Panel Valuers to value your house.
  8. You have to appoint our AIA Panel Solicitors to process your loan documents.

 

What other fees do you need to pay?

If you take the non-moving cost loan package, you will have to pay the following fees:

  • Loan agreement fees: lawyer fees, disbursement fees, stamp duty (approximate 2% of the loan value)
  • Valuation fees (approximate 0.25% of the property value)

If you take the zero moving costs, there are no other fees to pay, all the fees would be inclusive in the loan amount.

 

Who do I call if I have further queries on AIA Housing Loan?

Contacts Us at 012-2128008 Rose Chin or 017-3237506 Andrea Loh for further clarifications on the loan.

Alternatively, you can send us email at klrose.chin@gmail.com.

 

You may want to read also:

1) Will Based Lending Rate (Malaysia BLR rate) increase?

2) Fixed rate loan or fluctuating rate loan is better?

3) What is the terms and conditions of AIA Fixed Rate Home Loan

4) How to choose good Housing Loan in Malaysia?