QUOTE(sojurn @ Feb 19 2012, 03:43 PM)
I agree with 15% of monthly, but within reason la. 15% when you earn RM 10k / month sure np, when starting salary is like RM 2-3k, 15% a bit crazy la.
But I don't understand why "guru" say max 5 year then say better to invest. If you take 9 year, you got more money to invest...
Sigh I don't know la. I was a bit silly last time. Fresh grad, earn 2.5k go buy City, 7 year. 1k / month go to car. But Ok la, I need to travel for work. So allowance mostly cover my car.
But honestly la guys, if you got car that running well and you like, dun simply chg2. Depreciating asset is the worst...
And if you have the investment or saving attitude, I recommend better to take longer loan so more money can go into savings.
Interest can offset some of the cost of your loan that way.
Just my $0.02 la...
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
QUOTE(eistern @ Feb 19 2012, 10:22 PM)
i cannot brain dis..pls kindly explain
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. This post has been edited by cherroy: Feb 19 2012, 10:38 PM