Author 
Message 
Thomas Posts: 271 

Edited on 29Nov2006 8:58:09 AM

Sian.. mine still need to wait until Dec 08 to breakeven!!!!

Honda  Power up my WET dreams 

orangeboy Posts: 284 
Mine is 3 months earlier than yours... mebbe we can bulk purchase our new cars together in 2008 =)

orangeboy Posts: 284 

Edited on 29Nov2006 2:23:43 PM

My next car should be a SUV =P

Thomas Posts: 271 
quote:
Originally posted by orangeboy: My next car should be a SUV =P
On lar... just hope I can tahan until that long :P

Honda  Power up my WET dreams 

Ivan Liew Posts: 163 
the breakeven calculator is gone ...
any idea how much is the penalty for early redemption of car loan?


Kheng Fatt Posts: 191 
quote:
Originally posted by orangeboy: My next car should be a SUV =P
Yo boon heng, 2008 is just 14 days away!!!

Thomas Posts: 271 
quote:
Originally posted by Ivan Liew: the breakeven calculator is gone ...
any idea how much is the penalty for early redemption of car loan?
I have attached the formula provided on Hong Leong Finance website. If you are not too mathematically inclined, you can just call your finance company to ask for the amount if you pay early. You can be sure that the amount will be less than (total loan amount  Total amt paid so far).
Q3: How do you explain the interest rebate calculation using the Rule of 78 method? Aa3: Interest Rebate Calculation: The interest rebate calculation is based on the below formula:
 Interest Rebate (R) = n(n+1) X TC / t(t+1) where R = Term Charges Rebate, n = unexpired term ( in months ), t = total repayment period, TC = Term Charges
For example:  Amount Finance = S$100,000, Interest rate = 2.7% p.a. flat rate, Loan (number of yrs) = 7 yrs (84 mths), Hirer full settles after 5 yrs, unexpired hiring period is 2 yrs or 24 mths
Thus, interest rebate is computed as follows: Interest Rebate (R) = 24(24+1) X (S$100,000 X 2.70% X 7) / 84(84+1) = S$1,588.26

Honda  Power up my WET dreams 

Ivan Liew Posts: 163 
quote:
Originally posted by Thomas:
quote:
Originally posted by Ivan Liew: the breakeven calculator is gone ...
any idea how much is the penalty for early redemption of car loan?
I have attached the formula provided on Hong Leong Finance website. If you are not too mathematically inclined, you can just call your finance company to ask for the amount if you pay early. You can be sure that the amount will be less than (total loan amount  Total amt paid so far).
Q3: How do you explain the interest rebate calculation using the Rule of 78 method? Aa3: Interest Rebate Calculation: The interest rebate calculation is based on the below formula:
 Interest Rebate (R) = n(n+1) X TC / t(t+1) where R = Term Charges Rebate, n = unexpired term ( in months ), t = total repayment period, TC = Term Charges
For example:  Amount Finance = S$100,000, Interest rate = 2.7% p.a. flat rate, Loan (number of yrs) = 7 yrs (84 mths), Hirer full settles after 5 yrs, unexpired hiring period is 2 yrs or 24 mths
Thus, interest rebate is computed as follows: Interest Rebate (R) = 24(24+1) X (S$100,000 X 2.70% X 7) / 84(84+1) = S$1,588.26
yup, knew about the interest rebate part, but normally how much's the early redemption penalty?


Thomas Posts: 271 

Edited on 26Dec2007 5:22:10 PM

quote:
Originally posted by Ivan Liew:
quote:
Originally posted by Thomas:
quote:
Originally posted by Ivan Liew: the breakeven calculator is gone ...
any idea how much is the penalty for early redemption of car loan?
I have attached the formula provided on Hong Leong Finance website. If you are not too mathematically inclined, you can just call your finance company to ask for the amount if you pay early. You can be sure that the amount will be less than (total loan amount  Total amt paid so far).
Q3: How do you explain the interest rebate calculation using the Rule of 78 method? Aa3: Interest Rebate Calculation: The interest rebate calculation is based on the below formula:
 Interest Rebate (R) = n(n+1) X TC / t(t+1) where R = Term Charges Rebate, n = unexpired term ( in months ), t = total repayment period, TC = Term Charges
For example:  Amount Finance = S$100,000, Interest rate = 2.7% p.a. flat rate, Loan (number of yrs) = 7 yrs (84 mths), Hirer full settles after 5 yrs, unexpired hiring period is 2 yrs or 24 mths
Thus, interest rebate is computed as follows: Interest Rebate (R) = 24(24+1) X (S$100,000 X 2.70% X 7) / 84(84+1) = S$1,588.26
yup, knew about the interest rebate part, but normally how much's the early redemption penalty?
I guess for our cars, we fall under the Hire purchase act. We need to first work out the total amount payable to bank.
Let’s assume some numbers here: Car loan is $50,000, Loan period is 7 years, interest p.a is 2.2% and you are repaying after 5 years
Original Car loan $50,000
Add interest $7,700
Principal + interest $57,700
Less: Installments paid $41214.29
Less: rebate of unearned interest (rule 78) $647.06
Total amount payable to bank to fully redeem car
loan: $15838.95
Well, whether you need to folk out additional cash depends on whether your car has breakeven or not. You do not have to topup any cash for the transaction if the paper value of car (COE rebate + OMV rebate) and interest redemption is able to cover the outstanding amount. If you redeem the loan before the socalled breakeven, this means you'll have to pay cash upfront to cover the outstanding amount.
Calculation of redemption balance upon
Parf Rebate  $10,727.00  Add: COE rebate  $8,991.00  Add: Rule of 78 Rebate  $647.06  Less: Outstanding loan  $15,838.66  If >$0, no additional payment require  $4,526.40 
Positive amount means no additional cash require
Negative amount means need to folk out additional cash.
To get PARF + COE rebate, go to:
Redeption penalty is based on your contract with your finance company. So do check your contract ;). I have formulated a table for this particular exercise to easy calculation of all numbers (Let’s hope I never make any mistakes on the formula :P). Give me your email if you require the spreadsheet

Honda  Power up my WET dreams 
