What Is Flexi Loan?
Are you looking for a home loan in order to pay for a property you want? Are you having a hard time understanding the different types of loan options available on the market for you? There are different loan types you need to make sure you have a complete understanding of, because some of them might be right for you while others not so much. In Malaysia there are three primary forms of home/property loans you can get. You have what is called basic term, then you have semi-flexi and lastly there’s full-flexi. We’re going to discuss the full-flexi option here.
The first question you need to ask yourself?
The idea of being in debt for a home might not be something particular people are worried about. A long term debt on a home is considered a good thing. It enables you to build the following attributes:
- You look better on paper to financial institutions moving forward
- You get an idea of how financially responsible you have to be in order to be consistent with repaying the loan.
- You get the chance to slowly, but consistently increase equity in your home as a means of future leverage if needed.
- You get the chance to focus on saving more money overall in order to help with the upkeep of the home/property.
Now this might work for someone who isn’t too sure about their income as far as future growth is concerned. The decisions they make in the present are based on what their income is now and what they feel it’s going to be in the long term future.
What about those who have more financial flexibility though. This is where flexi-loans come into play. The main benefit they provide is that they don’t lock you into having to do things one way. That’s why they’re called flexi, meaning flexible and in this case fully or completely flexible.
What a full-flexi loan enable a person to do is make advanced payments on their home loans, and this enables them to lower the amount of interest owed as well. A person who makes an advanced payment on their loan can then decide to withdraw any additional payment they’ve put in if and when they want to. All this can take place without the need to go through a complex process or without being charged any sort of fees.
With a basic full-flexi loan you’ll be setup with a property loan account that’s going to be associated with your current account and has a checkbook. Each month the loan increment will be taken out automatically through the current account and paid into the property loan account. Should you decide to put more money into the current account, then you’ll be able to lower not just what your principle loan total is, but you’ll be able to lower the interest you owe on the housing/home loan.
There is any number of reasons some applicant would prefer a full-Flexi loan. Here are some examples:
- You expect to be getting a pay raise soon and will be able to make bigger or more frequent payment in the future.
- You’re expecting a large financial windfall in the future by means of family help or other means.
- You have substantial savings that you’ll be making investments with to increase your overall yearly income.
With a full-flexi loan you have the ability to pay down your loan faster and not be in debt as long as someone with a more conventional option. You have flexibility in terms of the extra money you put in and taking it out is a simple process. Carefully consider whether or not this option would be right for you before applying.