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any semi/fully flexible islamic loan available

 
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shahrul



Joined: 18 Jun 2009
Posts: 10
Location: KUALA LUMPUR

PostPosted: Thu Jun 18, 2009 8:41 am    Post subject: any semi/fully flexible islamic loan available Reply with quote

kindly value your advice:

semi-d completed 16years old
purchase RM387,000

Looking for 90% (+5% MRTA) Non zero moving cost
loan period : maximum available
age at next birthday: 38

Currently looking into
CIMB islamic flexi-loan : Offerred BLR-2.2
Maybank maxihome-i : 2.38% 1st year; thereafter BLR-2.2
Hong Leong islamic: 1st 2 years 3.25%; thereafter BLR -2.3

Question:
Which of the above one is better?
Is there any other islamic semi or fully flexible loan available?
Any other better offer (islamic or conventional loan) from other bank that you are aware of?
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redneck



Joined: 09 May 2009
Posts: 30

PostPosted: Thu Jun 18, 2009 1:42 pm    Post subject: Reply with quote

Hi Shahrul,

1st of all, where is the location of ur property?? Coz it's really a bargain for u to get a semi-D @ that price!! And AFAIK, if location is not suitable, then not all banks are interested in approving ur loan! Please ask those banks whether the location of ur intended purchase is within their RADAR...

Anyway, those banks offering loans that u mention, so far, those are the best offers i've seen yet. But u can try OCBC with their conventional flexi loan. I took up their loan with rates of BLR-2.4%(NZEC). Prepayment allowed, no extra charges, withdrawal allowed with RM10 charges, MOF 90% + legal fees + MRTA...i think, by far, it's the best offer i've seen. You can try applying thru OCBC and ask them about the package.
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ahmn77



Joined: 24 Jul 2007
Posts: 9

PostPosted: Fri Jun 19, 2009 7:19 pm    Post subject: Reply with quote

I am still considering to accept loan offer either from CIMB Islamic or Public Islamic Bank. What do you guys think, fully flexi is better than semi or vice versa?

Public Islamic Bank offer ZEC with BFR-2.25 while CIMB Islamic ZEC BFR-2.15.
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redneck



Joined: 09 May 2009
Posts: 30

PostPosted: Fri Jun 19, 2009 11:55 pm    Post subject: Reply with quote

I am no expert, but i wanna share some info i got from an expert...

whether it is a full flexi loan or a semi flexi loan, d only one who can decide which is best suited 4 u, is urself! U hv to consider, that 2 take up a full flexi or a semi flexi, u need 2 have d extra cash 2 offload into d housing loan account 2 take advantage of d daily rest interest. While it's true that a full/semi flexi loan allows u 2 prepay a certain amount of cash, only a full flexi allows u 2 redraw that prepaid cash...if u r thinking of paying up the same amount of cash instalment throughout the loan tenure, and d extra bonuses/income that u may get every yr is kept by u in ur FD, or mutual fund, then i suggest u might as well just take up a conventional loan without the flexi part...

Both PIB and CIMB Islamic offer good ZEC rates. Although NZEC rates are much better compared 2 ZEC, in NZEC, the sole benefactor is the "Lender". They will start accumulating interests from the LVS (legal, valuation, and stamp fees) AS WELL AS from the loan amount, the moment the Lender starts disbursing d loan. Whereas, in ZEC, the Lender loses money within the first 3-5yrs due to d LVS being absorbed by the bank. However, if u plan to buy or refinance a property and keep it for longer period of time, then it is much cheaper 2 get d NZEC. The ZEC is very much worth it if u plan to release ur property much sooner...

Just my two cents' worth
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shahrul



Joined: 18 Jun 2009
Posts: 10
Location: KUALA LUMPUR

PostPosted: Sat Jun 20, 2009 1:45 pm    Post subject: Reply with quote

Hi redneck, thanks so far for your very informative thoughts. The property is in Gombak (old house, hence the lower price; also bought it from owner and not agent), so far banks are ok with the location.
Need to go to OCBC to find out whether they still have the package that you mentioned....that's the best that I've seen so far. I suppose that one is semi flexi by the sounds of it....

ahmn77
Do you know that you have been offerred better rates from these 2 banks than what they have quoted to me.....FYI : Public Islamic Term Loan NZEC BFR-2.2; CIMB Islamic ZEC BFR -2.05, NZEC BRF-2.2.

If i'm not mistaken, the public islamic is non-flexi whereas the cimb is fully flexi. Also the capping for public is at higher BFR of 11.75%, and CIMB only about 10.75%
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redneck



Joined: 09 May 2009
Posts: 30

PostPosted: Sat Jun 20, 2009 2:47 pm    Post subject: Reply with quote

some banks offer different rates for different type of properties, meaning rates are different for under-con and completed properties. Probably that is why shahrul, u got a not-so-good rates compared to ahmn77.

BTW, any reason why u r interested in Islamic loans only? Becoz AFAIK, Islamic loans go by the concept "Bai Al-Inah", meaning the bank purchases the property for u, and then sells it back to u at a higher price, albeit at fixed rates. So u don't have 2 worry bout fluctuating BLR/BFR for that matter. But, from what i have gathered in this thread, both Public and CIMB rely on BFR for the rates, meaning u are not paying a fixed instalment in the 1st place, which defeats the purpose of Islamic loans. To me, an ideal Islamic loan should give fixed rates to its customers, meaning although it is still "Riba", but it is fixed. Unlike BFR/BLR based rates whereby the Lender is actually cashing-in on u misfortunes when the BFR/BLR fluctuates.
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cmtoh85



Joined: 23 Mar 2009
Posts: 21
Location: Kuala Lumpur

PostPosted: Sat Jun 20, 2009 3:09 pm    Post subject: Reply with quote

Hi,

Yes OCBC still provide BLR-2.4% for loan size above 300k. I would like to assist you in loan application. Kindly contact me if got any enquiry regarding the OCBC loan package. Thanks.

Regards,
Toh
cmtoh85@hotmail.com
0169455966
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shahrul



Joined: 18 Jun 2009
Posts: 10
Location: KUALA LUMPUR

PostPosted: Sat Jun 20, 2009 3:34 pm    Post subject: Reply with quote

Redneck
That used to be the concept of Islamic loan and that's why it was not very popular before. But now there seems to be a new interpretation of its application. Unfortunately, I am the right person to explain all the details coz I'm still a baby in this loan business. Totally outside my professional expertise. Perhaps other forum members may help to explain this new flexi-islamic housing loan and how it tallies with the Islamic syariah.

BTW, is this OCBC loan fully flexi or semi flexi? Is it linked to an OD account? Any maintenance fee, set-up fee?
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redneck



Joined: 09 May 2009
Posts: 30

PostPosted: Sat Jun 20, 2009 10:03 pm    Post subject: Reply with quote

the OCBC loan that i got is a full flexi loan. No monthly maintenance fees, and it's not linked to an OD account. Only loans with an OD account has monthly maintenance fees.

Do u have the habit of reading thru (word-for-word) the Offer Letter given by the banks? becoz, i am that kind of person who does that, so that i can compare the package given by other banks. The difference between OCBC loan and loans from other banks is that the penalty that you have to pay is 3% from the TOTAL LOAN AMOUNT if loan is settled within lock-in period, as opposed to other banks which is 3% from OUTSTANDING LOAN AMOUNT.

Whatever it is, do update me on this thread regarding the Islamic flexi loan...

Thx.
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redneck



Joined: 09 May 2009
Posts: 30

PostPosted: Sun Jun 21, 2009 10:24 am    Post subject: Reply with quote

Shahrul

Like i said, i am no expert in these financing stuff either, but i like asking ppl around and investigate about my investment. Afterall, buying a home IS A BIG INVESTMENT, don't you agree?? It is considered the biggest financial decision you will ever make in your life!

Hence i think it is most appropriate for u to scout around banks and asks the credit ppl, rather than just relying on ppl's opinion in this forum. That's what i usually do, i give opinions in these forums, but i do not ask for any...

IMHO, Islamic financing is based on Al-Bai Bithaman Ajil (buy and sell on a deferred payment basis contract). Which means that the bank purchases the property and sells it to u at a fixed price. Banks that go for BFR/BLR based rates, although claiming to be Islamic, but i do not see the requirements of the "buy and sell transactions" as stipulated in the Al-Quran (Surah Al-Baqarah verse 275).

Please read through an article I found on Money3 website regarding Islamic Financing and then tell me what u think, ok? The website is money3 dot com dot my
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shahrul



Joined: 18 Jun 2009
Posts: 10
Location: KUALA LUMPUR

PostPosted: Mon Jun 22, 2009 11:12 pm    Post subject: Reply with quote

Hi redneck

Thanks so much for all the advice given. Read the article that you've mentioned. Had the opportunity to ask some friends about this islamic "buy and sell contract", basically it is a trading between the bank and borrower for which the settlement of the sale price (financing amount plus total profit margin must be capped at certain % e.g 10% to protect the borrower, unlike the conventional loan.

The BRF floating will merely serve and be beneficial to the borrower, as he/she may end up paying less that the initial agreed contract of paying 10% profit to the bank.

From my limited understanding about the Islamic law of trading, one should not take excessive profit from the customer. This may explain why the BFR float or the flexible finance may be implemented as both parties will not be in the lossing end.
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