How to calculate full settlement

[Hcblue99]

Hi, based on the following information, can anyone teach me how to calculate the full settlement of the loan? Besides the figure, is there other charges involved?

 

Amount Finance: $64,000

Loan years: 10year(120 month)

Interest: 2.45%

Total interest: $17,280

Monthly instalment: $680

 

Full settlement after 24months.

[BoneStock]

you can find an eg here http://www.dbs.com/sg/personal/loans/car/

[Hcblue99]

Thank you so much. That's very helpful

[Paulcs]

ur interest looks a bit high

it's $0 down payment?

 

may need to check with bank whether got any penalty charge.

[Hcblue99]

That's just an example.

I though the current interest is around 2.45% ?

[Ghostrider]

Your interest calculate wrongly rite ?

 

64000k the interest per year should be $1568 @ 2.45% PA

 

So 10 years should be 15680 PLUS 64000 = 79,680

 

Monthly installment should be 664

 

Full Settle after 24 installment 79680 minus (664X24) = 63,744

 

IMHO...if you intend to full settle the loan at the end of 2 years...

 

If you are keeping the car ok. But if you are selling...better carry on driving the car...cos the 24 installment that you paid was just for interest alone only. You have not even started paying off your principle amount.

 

Please note that my above calculation does not factor in any penalty imposed by the finance or bank. Factor that in you could be seeing a even bigger amount !!

[Gadgeter]

hi HCblue99,

 

you may also want to use the attached file for more information.

FullSettlementCalculation.zip

[Hcblue99]

Thanks for pointing out the mistake.

Based on the current tax and parf value, it's not possible to change car within 4 years without suffering heavy losses.

I was actaully trying to calculate my current ride that is already 5 years old now.

[Happyboy99]

full settlement is not like that. got to use rule78 to cal the interest rebate then subtract it off from the oustanding amt.

 

base on his data, after 24 mth, the oustanding amt should be $63744 like what you cal, rule78 rebate will be $10055, so full settlement will be $53688.

 

total amt paid is $15936, of which $5624 goes to interest portion and $10312 goes to pay off loan portion.

[Ghostrider]

I dunno if he effected by the rule78 or not mah....cos now the new loan structure also dunno how to count full settlement.

 

Usually when I count for myself...I just add another 15% or so as penalty....quite close...at least in my case. I usually drive at least half the loan period before I change car.

 

If loan 5yrs...drive at least 3years then consider change...if not a fair bit of the DP will be gone.

[Happyboy99]

actually all car loan are affected by rule78, bank/finance company dont want to let go of it. our gov doesn't said must remove rule78 but up to the bank to decide.

 

for loan under Act, they will get all the rule78 interest rebate.

 

for loan under non-ACT, normally for those big car, the rule78 rebate will suffer 20% penalty.

 

you mention add 15%, to where ? because full settlement amt is always less than outstanding amt. full outstanding amt has future interest. upon early termination, bank has to rebate the interest portion and they use rule78. the earlier you stop the loan, the more interest you can get rebate. but generally after 3 yrs and above most interest portion already paid, there is no much rebate thus the full settlement amt and outstanding amt will be very close.

 

I'm doing car refinance that why quite familar with it.

Edited January 7, 2005 by Happyboy99

[Porker]

Full settlement according to the rule 78 should be done in this manner...

 

Loan taken = $64000

Interest = 64000 x 0.0245 x 10 = $15680

Monthly = (64000 + 15680)/120 = $664

Oustanding after paying for 2 yrs = 664 x 96 (8 yrs) = $63744

 

Interest rebate from rule 78 = [(15680 x 96 x 97)/(120 x 121)] x 0.8 = $8112

 

Full settlement = 63744 - 8112 = $55632

 

Hope this is clearer.

 

edit --> should I use 80% for the interest rebate? I can't remember. Its either 80% or 100%

Edited January 7, 2005 by Brandonsoh

[Hitman]

actually all car loan are affected by rule78, bank/finance company dont want to let go of it. our gov doesn't said must remove rule78 but up to the bank to decide.

 

I took a 5 yr loan of 42K and am not affected by this rule ley

[RadX]

Additiuonal disclaimer.....for those loans above 50k

[Hitman]

.... the morale is "Take below 50K Loans"

[RadX]

the morale is...Take public tpt

[Hitman]

.... I cant. Many women will be charmed by my good looks that I'll make the other guys on Public Transport look bad

[Looneytune]

I took a 5 yr loan of 42K and am not affected by this rule ley

 

are u sure bro? thot all loans affected by rule78.

but if loan less than $55k, than its considered under Hire Purchase Act, which is just rule78. but if loan is more than $55k, than its under Common Law. so there is a penalty on 20% on interest rebate from rule78, at any pt in time when u wanna fully redeem the loan b4 its maturity.