ASB Financing

There are many people who want to buy into Amanah Saham Bumiputera (ASB), but do not have money to buy a significant amount. Certain banks provide ASB loans for investors to finance their investments into Amanah Saham Bumiputera (ASB).

Like the ASB fund, ASB loans are only open to Bumiputeras. After submitting all income documents to the lending bank, the customer will have to open an ASB account with the bank. Once the loan application is approved, the lending bank will credit the loan amount directly into the customer’s ASB account. Every month, the investor (who is the borrower) has an obligation to repay in monthly installments.

Additionally, some management and documentation fees might be charged by banks when applying for an ASB loan.

ASB loans are basic term loans, and interest charged on ASB loans is calculated using the reducing balance method (similar to those used by Housing Loans and Fixed Deposits). Most ASB loans today use floating interest rates, so interest rates will change according to BLR.

Much like mortgage insurances, customers can choose to cover their ASB loans with insurance / Takaful that is financed by the banks. These insurances will cover the remaining loan amount in the event of death or total permanent disability (TPD).

There are no penalties on the early settlement by the borrower as long as it is not within the lock in period. The borrower is only required to settle off the remaining loan balance. But an exit penalty is imposed if the loan is settled within the lock in period.

However, do note that do note that unlike semi-flexi home loans, ASBs loans are basic term loans. Extra payments in monthly installments do not lower the interest payable.

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