Save link Interest Payment Option (IPO) – The loan that offers the flexibility of OD at the price of home loan rates with low initial payment of interest for the first 5 years of the loan.
Product Features
Save link is a deposit linked flexi home
loan - A home loan and Checking Account combined into One (1) that offers unlimited prepayment and redraw all of pre-paid amounts at anytime. Alliance Bank has added a new feature to Save Link - Savelink IPO.
Savelink Interest Payment Option (IPO) features the combination of SaveLink HomeLoan and Interest Servicing Only(similar to the nature of OD) for the first 5 years of the loan. Commencement is from first disbursement or 3 months from the Letter of Offer date, whichever is earlier. IPO is applicable to both completed and under-construction residential properties. Minimum Property Price or property market value at RM 100,000. The offer margin of finance is up to 90% of the Property Price or the property market value and the minimum loan tenure is 15 years (inclusive of interest period).
The Savelink IPO package offers the convenience of Zero Entry Cost (ZEC) option. This package comes with a Lock-In period of 3 to 5 years ( 5 years for Zero Cost package and 3 years for Non-Zero cost package- completed property only) and early settlement within the first 5 years of the loan will be being imposed an exit fee of 3% of the original loan amount.
What's good about it?
This flexi loan only requires the Borrower to service interest payment only which is different to most other Banks’ flexi loan packages that require the Borrower to service the interest and principal. The feature of Interest only payment at lower Home Loan rates (offered rate as low as BLR minus 0.9%) makes it affordable for the new homebuyers or home up-graders to commit on their desired dream house with low initial payment of interest only. Additionally, this loan suits Investor as they are only requires to service the interest portion for first 5 years of the loan before selling the property to a quick profit. Also the built in flexi features in Savelink IPO allows the Borrower to achieve cost savings, while having the flexibility to redraw on the excess payment made should they require cash.
Limitation
With IPO loan, during the first 5 years interest payment period, no principal portion will be paid hence no principal reduction during the interest period. The full installment payment will be deferred to commence on Year 6 onwards and this lays heavier repayment amounts on Borrower as the loan will still need to be settled within the approved loan tenure less interest period. For example, a repayment tenure of 15 years, the first 5 years is the interest period and the repayment of the approved loan amount is to be repaid fully during the balance 10 years of the loan tenure. Hence, the monthly installment amount will be higher as it will be based on the 10 years instead of the applied loan tenure of 15 years. This loan requires discipline in managing funds and Interest rates may be higher than loans without such features.
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