Multiple banks. Different interest rates. Call it a "conflict of interest".
Multiple banks. Different interest rates. Call it a "conflict of interest".
  • Personal Loan BYTES FROM OUR KITCHEN

    ASB Loan Malaysia

    What is ASB?

    ASB is a scheme that was launched in 1990 and is considered one of the safest investments avenues and has been known to provide some fairly impressive and steady returns. The scheme is actually an investment in equity markets and pegs the price of each unit at RM 1. It also is known not to charge any fee on redemptions of investments made. It also comes with a limit on the amount that can be invested in the account and this limit is RM 200,000. While there exists a limit on the amount that can be invested in the account, there is no limit on the amount that can be held in the account. This means that if the investment grows to exceed RM 200,000, then no the investors won’t be asked to withdraw or limit investments into the account.

    What is an ASB loan?

    An ASB (Amanah Saham Bumiputera) loan is a loan that is extended to Malay ethnic group, who are also referred to as Bumiputeras. It is a loan that can be taken to invest in ASB schemes and is provided by most of the banks in Malaysia. The general features of this loan can include, high loan amounts coupled with long repayment tenures.

    Features and benefits of ASB financing

    Some of the salient features of the ASB loans being offered by various banks are:

    • Some banks provide financing for the entire amount that the customer wants to invest in ASB.
    • Banks can have a limit on the minimum amount that can be borrowed under such a loan.
    • The maximum amount that can be invested in such accounts is RM 200,000 so financing for amount beyond this may not be provided.
    • The repayment tenure for this loan can be as long as 30 years depending on the bank. Some banks can even define the tenure based on the age of the borrower and cap the repayment period to 65 years of age.
    • The repayment for this loan can be done on a monthly basis and through standing instruction.
    • Some banks allow only 1 repayment to be made each month.
    • There is also a penalty that the bank may charge for payments that are delayed. This penalty is determined by the banks and can, in some cases, be calculated using the formula instalments not paid x number of days overdue x 1%/365.
    • There is also a prepayment option available for these loans however there can be a penalty associated with these prepayments if they are made within a period defined by the banks.

    ASB loan Interest Rates

    The interest rates offered on these loans are determined by the banks offering the loan.

    • The usual calculation is a certain amount above the base rate of the bank. For example, if the base rate of the bank is 5% and the ASB loan rate is BR + 1.5% then the interest rate charged on this loan will be 6.5% per annum.
    • The interest rates also depend on the amount that is being borrowed with some banks assigning a slightly lower interest rates on loans that have higher amounts being borrowed.
    • While most banks offer a fixed interest rate on these loans, there are some banks that can even offer floating interest rates.

    Eligibility criteria and documents required

    The eligibility criteria that governs the approval such loans depends on the bank but some common points are:

    • The age of the applicant needs to be between 18 years and 65 years.
    • They must be considered Bumiputeras. If they are not Bumiputeras then they are not eligible for the loan.
    • Some banks may also require the applicants to be salaried or self-employed.
    • Some of the documents that will be required for these loans are:
      1. Copy of an identity cards like NRIC or a passport.
      2. Copy of the ASB passbook.
      3. Pay slips for the last 2 to 3 months.
      4. Bank statements for the last 3 months.

    FAQs on ASB Loan

    Q. Can I borrow more than RM 200,000?

    A. Some banks extend loans up to RM 400,000 and more. The maximum amount that you can borrow will depend on the banks.

    Q. Can I make more than one payments towards the loan in a month?

    A. This facility is subject to bank's rules. In some cases, banks limit the number of payments to 1 per month.

    Q. What is the maximum amount that I can invest in an ASB account?

    A. The limit of the amount that can be invested in this account is set to RM 200,000.

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