This is an analysis of investing using loan. As some of you might know, investing on loan is quite popular among Malaysians. Even some banks make a fully describing brochures to attract people. One of the main confusions is the monthly pay. Do noticed some banks use lower monthly payment but here, I’m going to use standard BLR + 0.4% as the interest rate which is 6.9%. Some calculations are done with the help of online calculator. There are a lot of methods to invest using loan. I will just analyze the ones that I think the best.
Update: Too tired of numbers? Or use the Excel simplified ASB calculator instead.
If you would like to share your ASB investment plan, check here is the place
The data that I used in this calculation is as follow:
Interest Rate:6.9%
Dividend Rate:7%
Lending Terms: 10 years
Loan Method 1:
Dividend will be used to buy more ASB shares
Monthly Payment = RM587 (using online calculator)
Conventional Method 1: Invest RM587 monthly for 10 years in ASB
Verdict:
Loan Method :Total Investment at the end = RM98357 ( 39.63%)
Conventional Method:Total Investment at the end = RM103,888 ( 47.48%)
Total Cost: RM587 x 120 = $70,440
Loan Method 2 :
Dividend will be used to pay monthly loan payment.
Monthly loan payment minus Monthly Dividend = RM587 - RM291.66 =RM295.33
VS. Conventional Method 2 : Invest RM587 monthly for 12 months, and RM295.33 for 108 months
Verdict:
Loan Method :Total Investment at the end = 50,000 ( 28.40%)
Conventional Method:Total Investment at the end = RM58,884 (51.22%)
Total Cost: (587 x 12) + (295.33 x 108) =RM38,939.64
The scenario of banks giving out loans to fund your ASB investment is like as though like the banks themselves wants to invest in ASB, but unable to (Maybe because of the 200,000 limit). So what do they do? They use your entitlement Ex: your account to gain access to the ASB dividend, by providing you the capital upfront. They collect their dividend monthly from you. I remember calculating using “Time Value of money”, “Compounding Interest” and such formula and concluded that there’s no significant advantage to getting a loan to finance your investment, other than handing over your dividend entitlement to the BANK.
Start compounding savings + must have a strong self discipline.
Extra Notes:
Maybank is an appointed authorised agent for Amanah Saham Nasional Berhad (ASNB). Investors can perform transactions for the following ASNB’s unit trust funds at Maybank branches nationwide:
1. Amanah Saham Nasional (ASN)
2. Amanah Saham Bumiputera (ASB)
3. Amanah Saham Wawasan 2020 (ASW 2020)
4. Amanah Saham Nasional 2 (ASN 2)
5. Amanah Saham Malaysia (ASM)
6. Amanah Saham Didik (ASD)
7. Amanah Saham Nasional 3 Imbang (ASN 3)
8. Amanah Saham Gemilang
9. Amanah Saham Pendidikan
10. Amanah Saham Kesihatan
11. Amanah Saham Persaraan
One more thing is the SSPN ( Skim Simpanan Pedidikan Negara / National Education Savings Scheme) , has anyone take a look on the overall benefits?
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Tags: ASB, ASN, ASN2, ASW, dividend, Loan, Maybank, SSPN, tabung haji, unit trust fund
Comments: 9 comments
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Shieseefferie
December 15th, 2008 at 9:14 am
Hi!
My name is Jessika!
e46
December 19th, 2008 at 3:46 am
So what say you….which one is better…ASB investment on Loan or Monthly bank-in?
klseesea
December 23rd, 2008 at 12:38 pm
Montly bankin is the preferred way, and the return is much more.
Try to make yourself to bank-in into ASB would be the hardest part of all.
bluffy83
January 25th, 2009 at 4:45 pm
hurmm.. u should make calculation on 20 years period for ASB Loan not 10..
Mohd azad
February 4th, 2009 at 12:44 pm
Have u tried calculating the new BLR rate =5.95%
Maybe now its worth taking the loan since the ASB interest rate remains about the same but the BLR has had a significant drop
nizam
March 29th, 2009 at 8:47 pm
We cannot predict BLR to be low.. once the BLR > ASB dividen, you have to pay higher which means monthly deposit is always better than ASB loan
sal
June 21st, 2009 at 7:38 pm
Sebenarnya ramai orang tidak tahu hakikat sebenar Pinjaman Peribadi (Personal Loan) ni. Kalau personal loan itu dikira secara straight-calculation (seperti pinjaman kereta yang mempunyai fixed-interest), interest sebenar yang dicaj tidak sama dengan interest yang dipamerkan.
Pinjaman untuk 5 tahun pada 7.05%
Interest sebenar pada kadar APR = 12.6%
Pinjaman untuk 7 tahun pada 7.55%
Interest sebenar pada kadar APR = 13%
Walaupun nama pinjaman Islamik, pengiraan semua cara konvensional. Masalahnya, walaupun di dalam surat perjanjian ada tercatat interest sebenar dikira mengikut APR (Annual Percentage Rate), sesetengah bank tidak telus dengan TIDAK menyatakan kadar interest sebenar ini semasa berurusan dengan pelanggan. Sebaliknya mereka mengguna published rate 7.05% & 7.55% sehingga membuatkan pelanggan seperti anda menyangka mendapat faedah pinjaman peribadi yang rendah seperti pinjaman ASB Loan yang berasaskan kadar BLR 7%.
Kalau melabur ke ASB guna personal loan pada kadar interest 12-13% setahun, dan duit itu tadi dilabur dalam ASB yang cuma beri 7-8% setahun, nampak seperti tidak rasional. Sebaik-baik pelaburan adalah guna duit sendiri, dan bukannya dengan duit yang dipinjam (duit hutang).
Katakanlah anda pinjam RM 10,000 pada kadar 7.05% untuk 5 tahun. Interest sebenar 12.6% dan bayaran bulanan adalah RM 226 . Jumlah pembayaran selepas 60 bulan = RM 13,560.
Simpan duit RM10,000 itu dalam ASB yang beri faedah 7% setahun. Selepas 5 tahun, ia menjadi RM 14,025, dengan syarat dividen ASB dilabur semula.
Keuntungan yang anda dapat selepas 5 tahun bersusah payah bayar pinjaman
= RM 14,025 - RM 13,560 = RM 465 sahaja.
Alternatively, kalau anda simpan RM226 sebulan dalam ASB yang beri 7% setahun untuk 5 tahun,
Total Contribution = RM 13,560
Total Investment Value selepas 5 tahun menabung = RM 16,274.
As you can see, menabung dengan duit sendiri sebenarnya lebih untung, kerana pulangan lebih tinggi dan pulangan tersebut anda dapat bersih, tanpa disapu oleh pihak bank melalui interest yang dikenakan ke atas pinjaman peribadi ada. Masalah disiplin atau tidak, sebenarnya adalah isu peribadi. Mengapa bila berhutang boleh disiplin bayar RM226 sebulan tanpa gagal, sedangkan jika menyimpan RM226 sebulan anda akan dapat lebih dari itu?
zulkaarnain
July 3rd, 2009 at 10:53 am
ASB Loan.
Try with this scenario,
Take ASB loan for 20 year, for whatever amount(Limit to 100K). With the BLR (latest rate).
The idea is we just pay the loan half way only ( 8 year to 10 year).and PLEASE do not take out the dividend during this period.
The next step, either we Surrender or Pay all the balance to the BANK with the dividend received from ASB .
FROM calculation, we make more money than put our money every month to the ASB.
There is no charge fee ,if more than 3 year service with the bank.
My 50 cent thought (Bad English)
DMoney
November 3rd, 2009 at 1:00 pm
Check here for ASB deviden year 2009 2010
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