Some flexible loans allow you to redraw surplus prepayments without penalty or for a small fee. Traditional loans do not allow redrawing.

However the redrawing features of some flexible loans can be restrictive or subject to conditions, ie a high minimum amount of redrawing, a limited number of redrawing per month/annum and a fee chargeable upon each redrawing.

The most flexible loans offer an all-in-one account feature, ie, MortgageOne (by Standard Chartered Bank) and Savelink (by Alliance Bank). An all-in-one account allows you to have a savings or current account or even a fixed deposit account, the credit balance of which set off your loan principal and thereby reducing your interest cost. This account will enable you to cut the interest costs substantially or even totally if you have a substantial credit balance in your saving or current account. The advantage of an all-in-one account is you can redraw from your saving or current account as and when you like without penalty. The all-in-one account attracts a higher interest rate and charges a small monthly fee for the maintenance of the all-in-one account. If the saving in the interest costs resulting from your excess funds is more than the additional interest you have to pay (based on the higher interest rate), the all-in-one account loan would suit you.