May 21 2012, 06:39 PM
QUOTE(cherroy @ Feb 19 2012, 10:33 PM)
Wrong.
Unless your investment can yield your more than 5-6%, you are going to lose against the car loan interest.
And to achieve more than 5-6% in current investment environment is not easy task.
Most importantly, most people cannot even save enough, more money in hand, spend it, rather than using it for investment.
Forget about put the money in FD or saving, you are going to lose against your car loan interest.
Don't not think that car loan 2.xx% is your effective interest rate. You are not paying 2.xx% interest, even your saving give you 3.5%, you still lose against it.
Added on February 19, 2012, 10:38 pm
Car loan work like that.
You borrow 50k. If the 50K interest is 3%, and for 5 years, means 50k x 3% x 5 years = 7.5K interest for the whole loan period (average 1.5K pa).
First year, you loan 50K, paid 1.5K, yes it is 3%.
But second year, you already down 10K, left 40K, you still being charged 1.5K. 1.5/40 = 3.75 (no longer 3%)
Third year, loan left 30k, still pay 1.5K interest, 1.5/30 = 5%.
4th 1.5/20 = 7.5%
So the longer you drag the loan period, the more happier the bank is.
That's why the longer loan period, bank can give more lower rate.
U kidding me right bro?
That is housing loan
. If u borrow 50k with an interest of 3% throughout the 5 years, then what u are paying is just 50k + 7.5k
So basically its 3% for the whole tenure.this is fixed for hire purchase duration.they dont take the balance and recalculate like that again. Of cuz interest will be higher lah lif u calc like that cuz the balance of ur loan is reducing every year.
Unless your investment can yield your more than 5-6%, you are going to lose against the car loan interest.
And to achieve more than 5-6% in current investment environment is not easy task.
Most importantly, most people cannot even save enough, more money in hand, spend it, rather than using it for investment.
Forget about put the money in FD or saving, you are going to lose against your car loan interest.
Don't not think that car loan 2.xx% is your effective interest rate. You are not paying 2.xx% interest, even your saving give you 3.5%, you still lose against it.
Added on February 19, 2012, 10:38 pm
Car loan work like that.
You borrow 50k. If the 50K interest is 3%, and for 5 years, means 50k x 3% x 5 years = 7.5K interest for the whole loan period (average 1.5K pa).
First year, you loan 50K, paid 1.5K, yes it is 3%.
But second year, you already down 10K, left 40K, you still being charged 1.5K. 1.5/40 = 3.75 (no longer 3%)
Third year, loan left 30k, still pay 1.5K interest, 1.5/30 = 5%.
4th 1.5/20 = 7.5%
So the longer you drag the loan period, the more happier the bank is.
That's why the longer loan period, bank can give more lower rate.
U kidding me right bro?
That is housing loan
. If u borrow 50k with an interest of 3% throughout the 5 years, then what u are paying is just 50k + 7.5k
So basically its 3% for the whole tenure.this is fixed for hire purchase duration.they dont take the balance and recalculate like that again. Of cuz interest will be higher lah lif u calc like that cuz the balance of ur loan is reducing every year.
QUOTE(Kiding @ Apr 2 2012, 11:34 PM)
Cherroy is right, you are the one who doesn't understand house loan.
House load installment pay off interest and and reduce principle so your interest each year is getting lesser and lesser!
Hire purchase loan pay off interest but don't reduce your principle, your interest amount is fix throughout the loan period
3% car loan is actually higher than house load 3%.
Thats because housing loan is calculated based on monthly rest? I am sure u know this, thats why for housing loan the faster u settle the better cuz u will be paying less interest , they calc interest every month on ur balance amount whereas for car loan its fixed .House load installment pay off interest and and reduce principle so your interest each year is getting lesser and lesser!
Hire purchase loan pay off interest but don't reduce your principle, your interest amount is fix throughout the loan period
3% car loan is actually higher than house load 3%.
Aiyo,so simple calc also u all can mix up?
This post has been edited by kevin23: May 21 2012, 06:41 PM
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- aren't I a customer and isn't it your job to indeed attract a customer 
So i chose to just go to the other dealer. But now the prev SA keeps calling to say they'll match the offer, though i seriously am not interested to go back to them.
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