Nissan Car Lounge - Almera, Juke, Latio, Qashqai, Sylphy, Teana Owners > Latio
Penalty for early loan settlement
HumbleCar:
Just went through the Hire Purchase Agreement document and realised that there will be a penalty for early loan settlement. The penalty amount is 20% of the Rebate amount based on Rule 78. The penalty period covers the whole duration of the loan period. So, please do your sums first if you plan to clear your car loan earlier to see if it is worth doing so. The 20% can amount to quite a large sum, depending on original loan amount and loan period.
Feel cheated because my previous car also from TCM in-house finance don't have such penalty.
:-(
beluga:
--- Quote from: HumbleCar on May 14, 2008, 11:11:28 PM ---Just went through the Hire Purchase Agreement document and realised that there will be a penalty for early loan settlement. The penalty amount is 20% of the Rebate amount based on Rule 78. The penalty period covers the whole duration of the loan period. So, please do your sums first if you plan to clear your car loan earlier to see if it is worth doing so. The 20% can amount to quite a large sum, depending on original loan amount and loan period.
Feel cheated because my previous car also from TCM in-house finance don't have such penalty.
:-(
--- End quote ---
R U sure???? All car loan is standard Rule 78..... Even more so for an AD and in-house finance.
HumbleCar:
--- Quote from: beluga on May 15, 2008, 12:09:59 AM ---R U sure???? All car loan is standard Rule 78..... Even more so for an AD and in-house finance.
--- End quote ---
You are correct that the standard Rule 78 is used to compute the interest rebate. But hor, there is an asterick which indicates the 20% penalty for early loan settlement. There wasn't any such penalty for my previous car (also a Nissan) and also in-house finance. But now, the finance is from different bank. Don't know when was the penalty thingy first imposed. It is written in black and white in the agreement. How to argue with them. Sign on dotted line time also never read. There are just too many documents that we signed on. Nobody highlighted the penalty thingy. So, sign happily lor. Now feel cheated!
Yours no penalty is it? When did you book your car? If TCM in-house finance offers different terms to different customers, I am going to question them. Can help to check your agreement and let me know if there is any penalty mentioned in your case? Thanks.
beluga:
Mine is the same as your current contract which is 20% rebate only if early settlement. I book my car in mid-march
HumbleCar:
--- Quote from: beluga on May 15, 2008, 08:54:32 AM ---Mine is the same as your current contract which is 20% rebate only if early settlement. I book my car in mid-march
--- End quote ---
Hi Bro, That is exactly my point lor. Penalty for early settlement. Not informed of it earlier. Otherwise, will not take the in-house loan. Cheaper to pay upfront which means an additional $1,500. The SE advised earlier that it is cheapter to take loan and get the $1,500 discount first and then do early settlement after a year. (Understand that the terms that were in place for quite a long while were something like: $1,500 in-house loan discount for a minimum $30K loan with a one year lock-in period.) The effective interest rate indicated in the agreement is about 4.9 percent. In that case, why pay 4.9% interest where your bank deposite earns you only about 1+ percent interest or lower? (-- leaving aside about other investment with potential higher returns that come with higher risk where you may even loss all your invested capital)
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