Refinance....

[Jen1106]

Dear bro & sis,

I heard from my colleague that if i go for refinance my instalment so that i no need to pay so much monthly izzit true? And wat is the procedures?

[Latio79]

Hi, I heard about this from my colleague too. Think basically after refinance

should save some $$. My interest at the time when I bought my ride is 3.25%.

..my friend got it at 2.5% when he got his ride recently...

 

Anyone got any lobangs? any bankers ard?

[Silver_blade]

I did that a couple years ago with Citibank. Saving will not be very much if you intend to see out the loan period or if your loan does not have rule78 for early repayment. The saving I got from refinancing went to pay for the early repayment penalty and I pay $2 less per mths.

[Auron]

i thought this should be quite simple. go to another bank and say u want to refinance, if after calculation it is cheaper per month, then u refinance your loan.

[Surferguy1978]

i think there are some criteria for refinancing. e.g. car must be of certain age etc etc.

[Galantspeedz]

guys, you all are missing the whole point.

 

1) Rule 78. your payment goes more to interest at the start of the loan

2) lower installment but longer loan period?

3) you are paying interest all over again to the 2nd bank. so how can be savings?

4) you pay additional penalty charges for cureent bank and then pay again for your next bank.

 

 

IMHO, people should refinance only if they really hard up for cash.

[Smiley]

i did that fr my old ride. savings is not much, assuming no change to overall loan period. i dun take the cash bonus, and the savings ia less than $50 each month.

Edited October 23, 2007 by Smiley

[Jen1106]

[reply]Dear bro & sis,

I heard from my colleague that if i go for refinance my instalment so that i no need to pay so much monthly izzit true? And wat is the procedures?

 

Thanks all bro & sis, hmm i guess its not wise to go for refinance again in dat case.

[Qpik]

thank you for the wake-up call to those pple who are being mislead...

 

guess that is unavoidable & luckily we have MCF to prevent pple from falling into this trap.

[Fondue]

There will be savings if the interest rate on your current loan is significantly higher than current interest rate. best to go to the bank to inquire.

Sometimes, when the banks are desperate for business, they give very good deals.

 

But if you are thinking of refinancing to also extend the repayment period, then I would advise against it.

Edited October 23, 2007 by Fondue

[Sony]

just to know more.

 

Let's say I ask for refinance and get a shorter loan period. (7years instead of 10years, i.e. if my current loan is 2 years already and I still got 8 years. but after refinancing, it become 5 more years instead of 8).

 

Is it worth it?

 

and also assuming that interest rate is lower than existing.

+

since the initial payment goes towards interest but when we refinance, the original bank have to refund the interest paid, right?

 

Cheers

[Galantspeedz]

interest rate is lower but as i mentioned the key point is that for eg, a 7 yr loan.... you will have paid about 70-80% of the interest of the loan period by the 3rd or 4th yr...

 

And no bank will not refund you any interest paid, instead they will just deduct the interest that you have not paid from your o/s loan.... and there is still a 20% penalty and a early loan redemption charge and admin charge.....

 

so how can it be worth it?

 

1 way to check, ask someone that has refinanced, ask them how much he paid for the loan

before and add to his total loan now (after refinancing), i dun see how can it be less than the ex-loan amount.... dun forget the charges too....

 

In this way you are paying penalty twice if you redeem your loan early...

[Galantspeedz]

i think the people that are affected most are those that refinance than 1 or 2 yrs later change car.... they be shocked that the loan amount is still almost the same as the start of the loan....

 

I only can say i try to advise to the best of my understanding, as i used to be in this industry... and from then on, i dun take loan liao... i rather buy cheaper car...... the interest is scary....

 

And FYI, when people quote u interest rate for eg: 2.5%, pls note that is the nominal rate, the effective rate is about 5% as it is compounded daily if i rem correctly...

Edited October 23, 2007 by Galantspeedz