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Post by jirotan on Aug 8, 2007 12:13:29 GMT 8
Hi all, I need some info from you guys regarding re-financing of car loan.... currently loan interest is 2.88% from in-house finance package and tie in period is 1 year, as I am approaching the one year ,ark, i would like to consider the options of re-financing my loan..... any advice on where to go to .... which is the lowest or best??? I remember there's a section 7(8) clause thingy.... but super unsure about this thing.... any one can advice on this? read in papers a while back and this section 7(8) thingy can be quite a problem in re-financing of car loan..... Need some advice from anyone here.... thanks...
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nisse
Gear TWO
Posts: 214
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Post by nisse on Aug 9, 2007 22:14:30 GMT 8
Bro, I think you are referring to the Rule of 78 which is like a 'penalty' for paying off the loan early. Unfortunately in SG here, Rule of 78 is still legit and our banks will of course apply it for most motor-loans which will rule in favour of them.
The best approach is to let your re-financing firm review for you your current loan T&C to find out if it's worthwhile to do a re-financing.
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Post by jirotan on Aug 10, 2007 9:00:28 GMT 8
bro any idea how this rule 78 applies? where to get the clause or rules and regulations thingy, i re-fianace the last tiem on my previous ride and the sales staff didn't mention a thing about this rule 78 and i want to find out much more on this rule..... think probably she was trying hard ways to "close" my re-financing deal that she was pushy in getting me to sign on the dotted line.... so now must do some research before deciding..... thanks bro
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nisse
Gear TWO
Posts: 214
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Post by nisse on Aug 25, 2007 22:57:26 GMT 8
Rule 78 explanation - google "rule 78" and its definition and explanation will pop up... In general, where rule of 78 applies, if you terminate your loans early, you will be 'penalised' by having to pay more interest by having to clear the interest in the remaining loan that you are not going to pay (assuming you are to going to terminate the loan contract.). In other words, in the auto loan in which rule of 78 applies, for the first few years, you will be paying more of the interest of the loan than the principal. If you didnt terminate and complete your loan period, the rule of 78 will not affect you at all. I think most of our auto loans come with the rule of 78 clause. I have come across some without but their interest rates are much higher. In short, I think as long as rule of 78 is still legit in SG, i think us consumers dont really have much choice.
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Post by RSKeisuke on Aug 26, 2007 9:39:15 GMT 8
i'm with maybank 2.68% p.a. currently. my friend advised me to re-finance to get some interest rebate after the lock in period. What are the cons?
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Post by jirotan on Aug 26, 2007 14:19:13 GMT 8
I am also on 2.88% which i have done re-financing previously on my previous ride and the interest are 1.6% or 1.8% but i'm unsure of the pit falls in the scheme....
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Post by Monsterdog on Aug 27, 2007 9:00:09 GMT 8
Haiz! Who can help? Mine oso Maybank 2.88%
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Post by jirotan on Aug 27, 2007 13:11:45 GMT 8
Bro i thinking of finding back citibank which offered me the previous offer..... see if got lobang will post here....
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Post by quen2001 on Aug 24, 2008 2:23:01 GMT 8
Anyone to recommend a bank with low interest rates?
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Post by yanuk on Aug 24, 2008 9:54:36 GMT 8
Rule 78 explanation - google "rule 78" and its definition and explanation will pop up... In general, where rule of 78 applies, if you terminate your loans early, you will be 'penalised' by having to pay more interest by having to clear the interest in the remaining loan that you are not going to pay (assuming you are to going to terminate the loan contract.). In other words, in the auto loan in which rule of 78 applies, for the first few years, you will be paying more of the interest of the loan than the principal. If you didnt terminate and complete your loan period, the rule of 78 will not affect you at all. I think most of our auto loans come with the rule of 78 clause. I have come across some without but their interest rates are much higher. In short, I think as long as rule of 78 is still legit in SG, i think us consumers dont really have much choice. afaik, it is not how it works. MAS rule 78 says that if you clear your loan early, you have to pay 20% of the remaining interest owed. Example: your interest at signing of car is 6K. And your car is worth 50K (just an example, I know the numbers don't work out) At time of refinancing, you still owe the bank 5K of interest and 38K on car loan. This means that you have to pay the bank 38K for the car and 1K (20% of 5K) to clear the loan. anyone got a different view? found a website that has a more detailed write up with actual figures. www.sgcarmart.com/news/writeup.php?AID=61
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