Shingkyo Neutral Newbie September 11, 2010 Share September 11, 2010 Hi, Is it that nowadays the banks will charge 20% on unearned interest for early car loan repayment irregardless of your car <55K (Governed under Hire Purchase Law) or >55k (Governed under Common Law)? ↡ Advertisement Link to post Share on other sites More sharing options...
Xspace 1st Gear September 11, 2010 Share September 11, 2010 Why don't you call your bank and check? They can advise you immediately on the amount... Link to post Share on other sites More sharing options...
Shingkyo Neutral Newbie September 11, 2010 Author Share September 11, 2010 Yes, they said they need to impose 20% + some admin charge... But my car is under 55k which is to be governed by HP Law where the bank should not be charging this 20%... Advise? Link to post Share on other sites More sharing options...
Alvinnoob 1st Gear September 14, 2010 Share September 14, 2010 that is consider 78 rule, under early resettlement. Link to post Share on other sites More sharing options...
Galantspeedz Turbocharged September 14, 2010 Share September 14, 2010 Yes, they said they need to impose 20% + some admin charge... But my car is under 55k which is to be governed by HP Law where the bank should not be charging this 20%... Advise? not necessary.... because due to change in law for rule 78...... the 20% may still be charged under HP law.... but it must be stated in your contract... look thru your contract details and see if it is stated.... i used to work in a finance company.... hopefully my info is not our dated Link to post Share on other sites More sharing options...
Galantspeedz Turbocharged September 14, 2010 Share September 14, 2010 that is consider 78 rule, under early resettlement. it is not.. it is a different matter altogether... dun mislead leh Link to post Share on other sites More sharing options...
Kurty Supercharged September 14, 2010 Share September 14, 2010 (edited) quite standard, due to the curiousity, after reading this thread. i called up my bank and find that the penalty is also around 20% of the 'rebate'. but what is the 'rebate', need the loan department to call me up and explain. Edited September 14, 2010 by Kurty Link to post Share on other sites More sharing options...
Galantspeedz Turbocharged September 14, 2010 Share September 14, 2010 quite standard, due to the curiousity, after reading this thread. i called up my bank and find that the penalty is also around 20% of the 'rebate'. but what is the 'rebate', need the loan department to call me up and explain. rebate is based on interest not earned on the loan... an example in layman terms... 7yr loan will have 7yr interest but if you full settle on 3rd yr... you have 4 yrs of interest rebate as you did not use the loan for the remaining 4 yrs... but because of rule 78.. the calculation is not as simple as interest divide by 7yrs X 4years because rule 78 in layman terms means you pay more interest upfront.... for eg: 1st yr $1,000 installment = 900 to interest + 100 to principle 2nd yr = 800 to interest + 200 to principle etc so if you want to full settle after 3yrs.... your rebate may not be alot... as you have paid most of the interest during the 1st 3yrs installments.... this is why rule 78 is a killer Link to post Share on other sites More sharing options...
Kurty Supercharged September 14, 2010 Share September 14, 2010 so bro, based on your experience, what do you reckon? early settlement or just leave it alone.. Link to post Share on other sites More sharing options...
Galantspeedz Turbocharged September 14, 2010 Share September 14, 2010 so bro, based on your experience, what do you reckon? early settlement or just leave it alone.. to me.. as long as you have taken a loan.. it is best to carry on till end of tenure.... i know you intending to change car.... try not to....unless absolutely necessary Link to post Share on other sites More sharing options...
Kar_lover Supercharged September 14, 2010 Share September 14, 2010 Even those under Rule 78, they still can have other admin fees eg. a % of balance loan or something like dat. The details will be in your loan contract. Link to post Share on other sites More sharing options...
Tigerwoods Turbocharged September 14, 2010 Share September 14, 2010 so bro, based on your experience, what do you reckon? early settlement or just leave it alone.. Leave it alone and make them do transactionary work. My loan from one American Bank put ALL the Interest in 1st Year OK... KNN... After 1st year I still owe them my full loan amount. I was so C2Pid not to read the fine lines... Kena conned... Link to post Share on other sites More sharing options...
Alechi 2nd Gear September 14, 2010 Share September 14, 2010 not necessary.... because due to change in law for rule 78...... the 20% may still be charged under HP law.... but it must be stated in your contract... look thru your contract details and see if it is stated.... i used to work in a finance company.... hopefully my info is not our dated yes, this is right. the new rule came into being about 5 yrs ago. all hire purchase contracts should contain the revised clause already. otherwise, it must simply be the company sleeping, which is quite unlikely given that this is a P&L issue to them. Link to post Share on other sites More sharing options...
Alvinnoob 1st Gear September 14, 2010 Share September 14, 2010 it is not.. it is a different matter altogether... dun mislead leh opps.. my bad Link to post Share on other sites More sharing options...
Kurty Supercharged September 14, 2010 Share September 14, 2010 to me.. as long as you have taken a loan.. it is best to carry on till end of tenure.... i know you intending to change car.... try not to....unless absolutely necessary wah, like tat also know... power apart from intending to change car, my interest is high. 3%, thus was thinking of clearing the debt, then my cost of ownership will be further decrease Link to post Share on other sites More sharing options...
Vextan 1st Gear September 14, 2010 Share September 14, 2010 i just took a iHP loan from posb, the int rate is low and no penalty (insignificant) upon early redemption. Link to post Share on other sites More sharing options...
Treesmaker Clutched September 14, 2010 Share September 14, 2010 i just took a iHP loan from posb, the int rate is low and no penalty (insignificant) upon early redemption. Same here. 1.88%, no penalty for early redemption. Link to post Share on other sites More sharing options...
Galantspeedz Turbocharged September 14, 2010 Share September 14, 2010 (edited) to me.. as long as you have taken a loan.. it is best to carry on till end of tenure.... i know you intending to change car.... try not to....unless absolutely necessary wah, like tat also know... power saw your accident thread before apart from intending to change car, my interest is high. 3%, thus was thinking of clearing the debt, then my cost of ownership will be further decrease how long loan you take and left how many years? anyway anything more than 3yrs... you carry on lar.... overall you will lose more when refinancing.. also fyi if you duno... interest rate quoted is nominal rate... the effective rate (actualy rate you are paying) is about double.... Edited September 14, 2010 by Galantspeedz ↡ Advertisement Link to post Share on other sites More sharing options...
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