How to Terminate ASB Loan

ASB Loan or Pinjaman ASB is a financing facility offered by banks in Malaysia, including CIMB, Maybank, and RHB, to help investors purchase Amanah Saham Bumiputera (ASB) units without using cash capital. However, sometimes, investors may wish to terminate this loan before the maturity period. In this article, we will guide you through the steps to terminate your ASB loan, the conditions that need to be met, potential penalties, and tips to avoid issues during this process.

General Procedure to Terminate ASB Loan

Before terminating your ASB loan, there are a few things you need to consider:

1. Check Loan Balance: First, you need to check your loan balance. Is the amount that still needs to be paid almost the same as the value of your ASB certificate? If not, there may be a shortfall that needs to be settled first.
2. Prepare Documents: You will be asked to provide important documents such as your identification card and the latest loan statement.
3. Contact Your Bank: Make sure you contact the bank managing your ASB loan to get accurate information about the ASB account closure procedure and the next steps.
4. Check Penalties: Find out if there are any fines or penalties imposed if the loan is terminated early. Some banks may impose a penalty for terminating ASB loan CIMB if you decide to terminate the loan before the specified period.

Conditions for Terminating ASB Loan

To terminate your ASB loan, ensure that you meet the following conditions:

Documents Required for Cancellation

The bank will require several documents as part of the loan cancellation process:

• Identification card for identity verification
• Loan cancellation form to be filled out at the bank counter
• Current loan balance statement

Potential Penalties and Charges for Terminating ASB Loan

Before you decide to terminate your ASB loan, it is important to understand any charges or penalties that may be imposed by the bank. The loan termination process before the maturity period may incur penalties depending on the bank's policy.

How Penalties Are Calculated

The calculation for returning an ASB loan depends on several factors, including the loan balance and the period the loan has been paid. If the value of your ASB certificate is insufficient to cover the loan balance, you will be charged a shortfall.

• Loan Balance Higher Than Certificate Value: If the loan balance is higher than the value of the ASB units held, you will need to pay the shortfall.
• Early Penalty: Some banks impose a penalty for terminating ASB loan CIMB if termination is done before the specified period.

Loan Balance Payment Process After Termination

After deciding to terminate your ASB loan, the loan balance payment process will begin. Here are the steps that will be taken:

1. Payment Confirmation: The bank will confirm your loan balance payment and contact you for the next steps.
2. Return of ASB Certificate: If the loan is terminated, the ASB certificate used as collateral will be returned to the bank, and the accumulated dividends will remain yours.

Differences Between ASB Financing and Personal Investment

Depending on your investment choice, there are some differences between an ASB loan and personal investment:

• Initial Capital: ASB loans require a large initial capital, while personal investment can be done consistently with smaller amounts every month.
• Return Rate: With ASB loans, you will receive dividends faster because ASB units are bought in large amounts from the start, while personal investment provides slower returns as the amount increases gradually.

Tips to Avoid Issues When Terminating ASB Loan

Here are some practical tips to avoid problems when terminating your ASB loan:

1. Check Before Terminating: Make sure you know your loan balance and the value of your ASB certificate. If there is a shortfall, ensure you have the funds to settle the loan balance.
2. Get Takaful: If you took the loan with takaful, it can provide protection against death or disability risks. This takaful can also help reduce the costs you need to bear if you terminate the loan early.
3. Plan Long-Term Finances: Remember that terminating the ASB loan early can impact your long-term finances. Make sure you plan carefully before taking this step.

Instant Cash Loans

If you are looking for an alternative to the ASB loan, you can consider instant cash loans as an option. While these loans provide quick access to cash, they often come with higher interest rates, so make sure you understand them before making a decision.

By following this guide, you can understand how to terminate an ASB loan more easily and avoid any unwanted issues. Make sure to contact your bank for more information and make the best decision for your financial situation.

Frequently Asked Questions