Hitman Neutral Newbie September 27, 2005 Share September 27, 2005 For early redemption of loans ..... lets say the banks apply Rule 78 calculations to your loan. Is there any way that the amount is negotiable , that means can talk to the bank to reduce the final amount or is the whole thing non-negotiable ?? The new Hire Purchase agreements now got no more Rule 78 ... is that correct ?? Advises please ..... from our financial geniuses ↡ Advertisement Link to post Share on other sites More sharing options...
Acemundo Supercharged September 27, 2005 Share September 27, 2005 bro, i don't profess to be genius but will gladly offer my opinion. i dun think u can negotiate. i can't rem if the calculation of the monthly interest is shwon in the agreement. but the fact that the total interest is shown there and u signed on it, already shows you are accepting such a way of calculation. the new HP still got rule 78. that time news just say review, but i heard nothing more out of it. guess it just died a natural death. but i do rem some bank do offer variable rate package now which would then mean that we have a choice to seek financing not covered by rule 78 Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 (edited) Oh I see .... so the whole thing is non-negotiable lah I thought the HP Agreements signed after Nov 2004 got no more Rule 78 Still got ah ?? btw ; in my head and in my heart , YOU ARE A FINANCIAL GENIUS ok Edited September 27, 2005 by Hitman Link to post Share on other sites More sharing options...
Acemundo Supercharged September 27, 2005 Share September 27, 2005 most likely non-negotiable, knowing how banks work. not really...like i say, the exercise to weed out rule 78 died a natural death. no strong voice, no good alternatives etc. as a guess, i think now all the fixed interest rate package are still under rule 78. Link to post Share on other sites More sharing options...
Scratchy Neutral Newbie September 27, 2005 Share September 27, 2005 I think the interest rebate can be calculated as follows for this rule 78: Just FYI. n (n+1) X Total Interest Amount Payable ------- N (N+1) Where "n" represents the balance number of outstanding instalments to be paid, and "N" the original tenure of finance (in months). Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 Yeah .... but take this example .... Interest based on HP agreement = S$7200 Loan used = 33 months Unused Loan = 44 months Rebate given = S$2400 Total interest charged therfore is = S$7200 - S$2400 = S$4800.00 S$4800 for a 3 yr loan ... I think thats works out close to an interest rate of 3.8% sia when Rule 78 is applied Crazy manz ..... Link to post Share on other sites More sharing options...
Acemundo Supercharged September 27, 2005 Share September 27, 2005 why do u think they are called banks? Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 (edited) You know lar .... I always take things simple See the illustration above S$7200 for a 77 month loan should give an equivalent of S$93.5 interest per month Multiple by 33 repayments made = 33 x S$93.5 = S$3085.50 in interest Shouldnt rebate be = S$7200 - S$3085.50 = S$4,114.50 however they are only giving back S$2,400.00 in interest rebate. Damn !!! Thats S$1,714.50 in extra interest due to Rule 78 that the banks earn Thus was just wondring whether it is negotiable or not ... cause that a reakin huge sum Edited September 27, 2005 by Hitman Link to post Share on other sites More sharing options...
Acemundo Supercharged September 27, 2005 Share September 27, 2005 yeah i also realised that the last time while working out my sums. bottomline, out to make ur money! Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 Yeah manz ... but be fair ley Its not that they didnt earn interest , they already do at about S$95 per month amounting to S$3135.00 for 33 repayments. Now they apply Rule 78, get another S$1700 Jialat manz .... considering mine got no penalty somemore Cant imagine for those whose loan is above S$55K ... Rule 78 + Penalty Siong ah !!!! Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 And I thought I calculated wrongly Sekali not wrongly .... kena charged extra interest on the years that I didnt even use their loan money Link to post Share on other sites More sharing options...
Scratchy Neutral Newbie September 27, 2005 Share September 27, 2005 ya they borrow their funds at less than 1% from the poor depositors and charge u 3.8%....spread very big and delicious...hehe...... well if dun wanna lose that much then pay till end of tenure...rate per annum should be lower than if u redeem early....although absolute amount more... the more u count abt car the worse it gets....guess just concentrate on earning more money... Link to post Share on other sites More sharing options...
Acemundo Supercharged September 27, 2005 Share September 27, 2005 well, i also realised that we have no way out of this...just pay our butts off. Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 ya they borrow their funds at less than 1% from the poor depositors and charge u 3.8%....spread very big and delicious...hehe...... You are abslutely right dude But they rnu a biz for those with no money to buy car in cash upfront We need Robin Hood well if dun wanna lose that much then pay till end of tenure Yeah I know .... just that I think its grossly unfair to charge such an amount of interest on an unused loan amount guess just concentrate on earning more money... Also no use ... the extra money you earn flies away so fast , you wonder whatever happened to it Back to Square One Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 Sad but True .... thats why I advocate the people to spend less and save for the future if they possibly can Else unlike our forefathers .... this generation and beyond is gonna be in deep deep trouble near retirement age Link to post Share on other sites More sharing options...
Acemundo Supercharged September 27, 2005 Share September 27, 2005 haha....like i always say, banks rent you an umbrella when it is sunny weather........take it away from you when its raining. Link to post Share on other sites More sharing options...
Acemundo Supercharged September 27, 2005 Share September 27, 2005 actually we r jus following examples of some developed countries Link to post Share on other sites More sharing options...
Hitman Neutral Newbie September 27, 2005 Author Share September 27, 2005 Yeah but we are the one who asked for that umbrella on a sunny day, what to do ↡ Advertisement Link to post Share on other sites More sharing options...
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