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 reducing balance..flat rate, calculation question

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jack2
post Mar 23 2008, 12:24 AM

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QUOTE(ultramanbabe @ Mar 22 2008, 11:51 PM)
nope,im working in bank,which need to explain to customer about the package ,product...i found out most of the customers who loan for more than 2 loan and above,still cant differentiate about flat rate,reducing rate
maybe they just heard about 6% is cheaper than 10%,didnt bother whether is flat rate or maybe reducing rate
kindly make clear everything before u sign a loan ....
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You make two calculations that showing one is using reducing balance, one is flat rate using the same amount of principal and repayment amount.

Then show them that using reducing balance, you will pay lesser and interest charged is lower. Whereas using flat rate, they need to pay more.
jack2
post Mar 23 2008, 10:26 PM

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QUOTE(Chester @ Mar 23 2008, 01:51 AM)
I know my company car loan is 4% on Reducing Balance. After calculated, it is actually equilevant to 2.1% of fixed rate thumbup.gif
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Where got car loan (HP) is using reducing balance de?
jack2
post Mar 24 2008, 12:05 AM

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QUOTE(Darkmage12 @ Mar 23 2008, 11:35 PM)
He did mention company loan
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QUOTE
I know my company car loan is 4% on Reducing Balance. After calculated, it is actually equilevant to 2.1% of fixed rate thumbup.gif



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