Thursday, July 10, 2008

Scheme to help lower-income group cope with housing loans

It was reported in The Star,

Second Finance Minister Tan Sri Nor Mohamed Yakcop said the move would enable borrowers to have more disposable income for their daily expenses.

For example, a person who has managed to repay half the amount of his 20-year loan of RM300,000 within 10 years might be given 20 years instead of 10 to repay the rest of the loan.

This simply would not work. Making the loan repayment longer simply means paying more interest to the bank. In the end, the borrower would end lose even more money. How can our Finance Minister brilliantly come out with this statement. I do not think he is well verse in Finance. Jezz.

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