Settle Car Loan, worth to pay in one short?!
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 Jun 19 2008, 11:03 AM
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#1
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All Stars
23,851 posts Joined: Dec 2006  
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You do get a rebate and it could be calculated by a standard special formula.
The banks earned more interests on earlier years then ( more weight on it ) than later years. Diff from housing loan which is on reducing balance method. Sorry i lost the formula. Should get back to you once I have it. Or else contact your banker to confirm. This post has been edited by SKY 1809: Jun 19 2008, 11:08 AM |
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Jun 19 2008, 11:36 AM
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#2
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QUOTE(keonglck79 @ Jun 19 2008, 11:18 AM) You will definately get a rebate from bank. example if you borrow $35k nine year for 4% interest, that mean each year interest is $1400, if you early settlement for 3 year, the bank will give u rebate $4200. Are you sure ? However, if you have housing loan, advice to dump your money to settle the housing loan.  I do not think banks are so generous to get you back RM 4,200. Correct me if I am wrong. This post has been edited by SKY 1809: Jun 19 2008, 11:36 AM |
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Jun 19 2008, 11:41 AM
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#3
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QUOTE(tinkerbel @ Jun 19 2008, 11:36 AM) @SKY 1809, No, it is quite standard according to banking practice .Yeah.. they probably make U pay for early settlement  *grins*They earn lot of interest during the first year ( could have considered the penalty odeli ). My last calculation was about 5 years back, a bit old to recall. This post has been edited by SKY 1809: Jun 19 2008, 11:42 AM |
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Jun 19 2008, 06:48 PM
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#4
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QUOTE(hirota @ Jun 18 2008, 10:17 PM) hello, i wanna ask you guys, let say if i purchased a car with 9 years installment, after 1.5 years do you think it's worth to pay all in one short to settle the balance of my car loan? let say the balance is RM35k The interest charged is based sum of digits method ( if still applicable today )thanks 1st cal the total int = total inst - loan amount 9 yrs loan , sum of digit ( 108+107+......................+1) =5886 total digits ( using spreadsheet to cal ) 18 months , sum of digit ( 108+ 107+...................+91) = 1791 digits 108 ( total months for 9 years in descending ) Int earned by your bank for 18 months would be (a ) total int x1791/5886 therefore discount given should be total int x 4095*/5886 ( interest yet to earned by bank ). * 5886-1791=4095 though, just paying 18 months, int earned by bank 30%, another 70% on bal of 90 months. Bcos weightage used is descending ( sort like penalty ) Correct me if i am wrong. This post has been edited by SKY 1809: Jun 19 2008, 07:41 PM |
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