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<blockquote data-quote="astroboy" data-source="post: 402820" data-attributes="member: 4527"><p>Nowadays, the banks are very creative.. You don't pay 4% interest for brand new BMW la. I am paying about 2% for my E90 and I have calculated if I were to use reducing balance method, the rate turns out to be the prevailing housing loan rate.. like the last year end Toyota promotion of 1.88%, ask yourself when did money market rate ever fell below 2%? Then how the bank make money?</p><p></p><p>If you know risk factor, hire purchase loans are more risky because the car, which is the collateral for the loan are a "movable" asset. So when it comes to bad debt recovery, locating the car is a big problem! So naturally, interest rate shall be higher than housing loan.. no choice! or you can refinance your house and pay cash for your car, in a way converting the car loan into the house loan, at reducing balance method, if you think you can benefit by avoiding the 'straight line' hire purchase loan.. :wink:</p><p></p><p>You also can become creative ma.. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite8" alt=":D" title="Big Grin :D" loading="lazy" data-shortname=":D" /> That's how I creatively "transform" a VIOS budget into a brand new E90.. :listen:</p><p></p><p>It is not the "straight line" method you should complain, but the way our installments are used to offset the principal and interest portion.. the initial years a big chunk for our installment goes to offset interest and you can hardly see your principal loan sum reduces during the initial years.. that's why selling your car towards end of the tenor, u won't see much interest saving/rebates.. That one is what I hate most! I don't even consider it straight line.. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite3" alt=":(" title="Frown :(" loading="lazy" data-shortname=":(" /></p></blockquote><p></p>
[QUOTE="astroboy, post: 402820, member: 4527"] Nowadays, the banks are very creative.. You don't pay 4% interest for brand new BMW la. I am paying about 2% for my E90 and I have calculated if I were to use reducing balance method, the rate turns out to be the prevailing housing loan rate.. like the last year end Toyota promotion of 1.88%, ask yourself when did money market rate ever fell below 2%? Then how the bank make money? If you know risk factor, hire purchase loans are more risky because the car, which is the collateral for the loan are a "movable" asset. So when it comes to bad debt recovery, locating the car is a big problem! So naturally, interest rate shall be higher than housing loan.. no choice! or you can refinance your house and pay cash for your car, in a way converting the car loan into the house loan, at reducing balance method, if you think you can benefit by avoiding the 'straight line' hire purchase loan.. :wink: You also can become creative ma.. :D That's how I creatively "transform" a VIOS budget into a brand new E90.. :listen: It is not the "straight line" method you should complain, but the way our installments are used to offset the principal and interest portion.. the initial years a big chunk for our installment goes to offset interest and you can hardly see your principal loan sum reduces during the initial years.. that's why selling your car towards end of the tenor, u won't see much interest saving/rebates.. That one is what I hate most! I don't even consider it straight line.. :( [/QUOTE]
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