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Personal financial management, V2
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spikey2506
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 Jul 1 2011, 09:59 PM
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Good day sifus. I've been following this thread for quite a while and thanks a million for the many tips. I have a question here. Let's say that I have a savings for about RM30K, and I have a car still on loan left about 5 years. (I took a 9 years loan. I know it is not the best decision, but I had my reasons). With rebate from the bank, the car can be settled at around RM30K++. My question, should I settle the car using the savings, or should I just continue servicing the loan? The car is RM600 per month, and after full settlement, my cashflow should be better and I can save a lot more than now.
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spikey2506
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Jul 4 2011, 01:13 PM
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QUOTE(+Newbie+ @ Jul 4 2011, 10:14 AM) Do you mind elaborating on how the rebates are calculated? I'm facing a similar situation as you and the rebate method will probably determine whether I settle or not. As for your situation, you need to make a decision here. Basically, profit from investing vs savings from settlement. Which is higher? If you want to invest rather than to settle, you have to make sure you have the discipline, knowledge and initiative to do something. Not let the money rot. If you wind up doing nothing, then it doesn't matter how much you can potentially earn, because you did nothing with it. This would be a lose/lose situation for you. You lose cash flow and you lose on interest. I don't know the exact calculation mechanism, but I will ask the officer if I have the chance. That day, she just showed me a screen from her terminal showing the total settlement amount and the rebate automatically calculated by their sustem. The rebate calculation differs from bank to bank, so it's best to consult with your bank. Mine is MBB. |
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