5 minutes and never a title

I've done a lil' research as of late on whether I should take some personal loan to add to ASB savings.

The result was quite interesting.

For my case, I had about 20k in ASB savings prior to the loan.

If I take a Rm30k loan with 15 years to pay it with RM250 monthly, I'd end up paying the bank in total of RM15k in interest.

After 15 years of that, I'd end up having RM173,693. Minus the RM15k paid to the bank, the true amount I have is actually RM158,693. Retrospectively, if I'd gone the conventional way, I'd have RM162,957 in savings - and thats the total amount. That means I actually lose out some RM4k because I'd have to pay the bank.

But if you stretch that a little further, let say another 5 years, then you'll see the numbers kinda evens up on both side (conventional and loan).

Stretching another 5 years, I begin to see an increase in return from the loan side - in which the difference between the loan and the conventional method amounts to RM10k.

This effect is perhaps due to the fact that in ASB the bonus is counted using a 10 year formula, so your investment history really can make a difference.

So in the long run - taking a loan to use as capital for ASB investment is actually rewarding. By long I mean real long..like 25 years kinda long (in the example the period of loan payment is 15 years, the period to actually break even is ~20 years. )