Tuesday, 9 September 2008
Fully Utilize Banking Facilities (Serie 1 - Car Loan Reschedule)
Nowadays, with life expenses soared and skyrocketting days after days, many of us think of how to reduce the debts and increase our cash flow.., surely. There are many ways to work on it.. The principle is, managing the debts commitment and in the same time able to maximise saving. Rescheduling car repayment period is one of the option. But this is applicable to those who doesn't have an intention to sell and upgrade their car to new one. Example.., one guy had a 3 yrs old hire purchase loan with a full settlement value of 58k. He signed up that HP loan which needed him to repay RM1400 per month with an interest of 3% per annum for a period of 7 years. He planned to reschedule it to increase his cash flow. The bank offered him to prolong another 3 yrs with the same interest rate. He pays RM840 per month and save RM560 a month by doing so.
Now, lets do some calculation. If he maintain current HP agreement and pays RM1400 per month for another 4 yrs (48 months), it will cost him RM66672 to finish the repayment at the end of the tenure. If he rescheduled and pays RM840 per month for another 7 yrs (84 months), he needs to repay RM70560 to finish the repayment at the end of the tenure, which means will cost him about RM3888. And if he save the balance of RM560 in unit trust (ASB for instance) which he made from rescheduling and considering 48 months to finish the payment if he maintained current HP agreement, he will save a whopping RM26880. In reality, the reschedule option will cost him RM3888 but instead he will manage to save RM26880. Good option isn't..?