What are the common housing loan packages offered by banks or financial institutions in Malaysia?

Each financial institution packages its housing loans differently.

You should examine all the features of a loan package and not just base your decision on any single feature.

Pricing is just one consideration; other features like flexible repayment terms could balance the scale or even translate into greater loan savings.

Financial institutions generally offer housing loan packages either in the form of a term loan, overdraft, or a combination of a term loan and overdraft.
  • Term Loan
    - A facility with regular predetermined monthly instalments. Instalment is fixed for period of time, say 30 years
    - Instalment payment consists of the loan amount plus the interest

  • Overdraft facility
    - A facility with credit line granted based on predetermined limit
    - No fixed monthly instalments as the interest is calculated based on daily outstanding balance
    - Allows flexibility to repay the loan anytime and freedom to re-use the money
    - Interest charged is generally higher than the term loan

  • Term loan and overdraft combined
    - A facility that combines Term Loan and Overdraft. For example, 70% as term loan and 30% as Overdraft
    - Regular loan instalment on the term loan portion is required
    - Flexibility on the repayment of overdraft portion

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Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)

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Knowledge Base ID :   1269
Last Reviewed :   May 22, 2014
Source :   BankingInfo
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