Car Financing enquiry

[Dondonzz]

Hey peeps,

 

if let say i wanna purchase a car with zero downpayent. how does the car financing works?. let say if the selling price of the car is 80k, can i obtain a 80k loan from a bank (i want to get 80k cash from them) , then i pay back the car loan in installment for 10 yrs. can i obtain cash and put into investment and yet pay the car loan installment?. is there such a scheme in singapore. im a first time car buyer. hopefully can get some help from ya.

 

thank you

[Surferguy1978]

never hear of such car loan scheme. the scenario u mention seems like borrowing 80k personnal loan from the bank. i think the interest rate for this 80k personal loan will be much more higher than car financing package..

[Richsg300]

Bro if i m not wrong the car dealer or their se will apply the car loan for u. If the loan is approve of 80k u can take the car at zero driveaway. but ins rd tax n radio fee u got to pay. If u wan to drive out the car without forking out also can tell ur se to apply the loan higher like say 85k to cover ur ins , rd tax and radio fee.

[Ultramega]

Answer is a straightforward NO.

 

super common sense leh. if u take the cash to invest, then who pay the car agent? car agent don't get paid and at the same time give u a car, got so good bo?

 

u want cash go take personal loan or use credit advance facilities. but don't think you can get 80k that easily.

[West]

not sure what u trying to say,

 

when u take a 80K loan, the 80K cash is given directly to the car dealer as payment for the car, u dun get to see the cash.

 

unless u are saying u are preparing to pay for car in cash, and considering whether to still take a loan, so u have extra 80K for investment (which is the original cash u had).

[Bugsbunny]

are you trying to get personal loan or car loan?

[Dondonzz]

i was thinking of getting personal loan to pay for the car financing or overloaning from the bank to pay for the car, ist installment, ist yr road tax and insurance. i heard there's a scheme from the bank to loan 110% of the car prices and get 10% in cash. it it true?

[Sunny123]

You can avail CASH-BACK Car Loan. It provides cash-back of 30% of the interest. The rate of interest is higher for this type of loan.

 

Let's do a quick calculation:

Option 1 - Cashback (interest 3.5%)Loan amount 60000

Loan Tenure = 120 months (10 yrs)

Interest @ 3.5% = 21000

Cash Back (30% of interest)= 30% of 21000 --> $6300

Monthly instalments = (60000 + 21000)/120 = $675

 

The above cash back of $6300 that lands in your pocket, comes with a 'catch' that you might have to pay back the entire cashback amount if you redeem your loan before 5yrs. This is in on top of Rule 78 penalty.

So basically $6300 cash-back is like a personal loan offered to you by the bank, which you eventually pay back to bank in monthly instalments spread across 10 years.

 

 

Option 2- No Cashback (interest 2.5%)

Loan amount 60000

Loan Tenure = 120 months (10 yrs)

Interest @ 2.5% = 15000

Cash Back --> NIL

Monthly instalments = (60000 + 15000)/120 = $625

 

Take loan for 2.5%pa. No strings attached, you only pay Rule-78 penalty whenever you fully pay/redeem your laon with bank.

 

Another way of looking at it that cash-back of $6300 is like a personal loan to you from the bank in hard cash, which you eventually pay back to back as part of monthly instalments (bcos of higher interest rate). Which is still better then getting a personal loan. If you really need cash !!

 

It all depends how you want to look at it and what you want to do with this $6300 --- settle your previous/current car loan, reinvest or indulge/splurge in buying stuff/gadgets for yourself or settle any other outstanding commitments that attract higher interest..... the list goes on.

 

Option-2 (wihout cashback) is still the best choice if you really do not need any hard cash.

 

Whatever it is.... at the end of the day one should make a informed decision.

[Watwheels]

Whatever idea u had thought of, bank ppl had already thought of it.

 

I suggest u save up some money to put as downpayment and choose a not-so-ex car instead.

[Best_ctzn]

To put it more succintly, if you consider the extra amt paid for with option-1 compare to option-2, it will be $6k ($50x120). So you will be paying 6k in all through the installments, while receiving 6.3k at start of loan. It will be like -0.x% interests loan, even better than zero-interest loan. So not bad if you do not need to redeem ur loan before the tie-up period (5 yrs? depending on finance company), but too bad nobody can predict future lah.

 

The cash-back scheme is essentially a tool for the finance company to tie you down to earn more interest from you.

[Sunny123]

Hi BEST_CTZN....

Very apt conclusion.....

 

"To put it more succintly, if you consider the extra amt paid for with option-1 compare to option-2, it will be $6k ($50x120). So you will be paying 6k in all through the installments, while receiving 6.3k at start of loan. It will be like -0.x% interests loan, even better than zero-interest loan. So not bad if you do not need to redeem ur loan before the tie-up period (5 yrs? depending on finance company), but too bad nobody can predict future lah.

 

The cash-back scheme is essentially a tool for the finance company to tie you down to earn more interest from you".

[Thug]

[reply]

Hey peeps,

 

if let say i wanna purchase a car with zero downpayent. how does the car financing works?. let say if the selling price of the car is 80k, can i obtain a 80k loan from a bank (i want to get 80k cash from them) , then i pay back the car loan in installment for 10 yrs. can i obtain cash and put into investment and yet pay the car loan installment?. is there such a scheme in singapore. im a first time car buyer. hopefully can get some help from ya.

 

thank you

 

 

 

Huh...u loan 80k...u get 80k cash....what the dealing getting?

 

When get loan u paying the bank not the dealer...dealer get money from bank....

[Leepee]

Possible!

 

Try to talk to your company HR for a car loan.

I know a few who did it before in my ex-company (>8 years ago)

 

Tell HR you buying a car.

HR will issue a cheque to you to pay for the car.

Then you also take a bank loan for the same car.

 

Then HR will deduct the car loan from your monthly salary.

 

But you will have $80k in FREE cash for your immediate use and investment.

[Urns]

Well-said!

[Dondonzz]

alright let me verify ur sentence dude.

1) get a company loan of 80k at interest free, with equal repayment every month for 10 yrs. (80k cash)

2)Obtain a bank loan for car ( mayb can cut down to 7 yrs. put a sum of downpayment using company loan.

 

best scenario = got cash + car. (best liquid position)

 

however, this depends on ur approval of ur company loan. (which tie ya down for 10 yrs) haha

[Iceshelterx]

Hey peeps,

 

if let say i wanna purchase a car with zero downpayent. how does the car financing works?. let say if the selling price of the car is 80k, can i obtain a 80k loan from a bank (i want to get 80k cash from them) , then i pay back the car loan in installment for 10 yrs. can i obtain cash and put into investment and yet pay the car loan installment?. is there such a scheme in singapore. im a first time car buyer. hopefully can get some help from ya.

 

thank you

 

Let me put it into very layman terms.

You get loan from bank 80k for car.

That 80k will be gone from bank -> dealer, straightaway upon approval.

After that bank will charge you accordingly to your loan period and installment like what other illustrated.

You wont have chance to touch and smell the cash.

+ worst.. you need to top up money cash for deposit, upfront payment, roadtax, insurance, etc.

[Ghostrider]

If you come across such a scheme....let me know. I also want.

 

Here is how it works.

 

You go to agent and buy a car for 80K. You zero down and full loan over a period of 10yrs. Subjected to bank approval, the money will be paid to the car dealer (not you). Car dealer will proceed to do the paper work to sell you the car....however, the legal owner of the vehicle will be the bank or finance company. Until you pay every single cent back to them, they are the legal owner of "your" car. You are just known as a hirer in the eyes of the law.

 

80K is a bit high to secure without any collaterals (item of value like your house, bonds, etc...) But I believe if you ask for full loan + 10yrs....sure trigger the bank to offer you "money back" offer....that is they will offer you a sum of money to spend...keep....invest...do whatever you want with it (amount varies with loan amount). The catch is...you have to be lock in with them for a certain period of time...anytime you pay back earlier...they will penalise you on top of the Rule 72 crap.

 

But think carefully hor...the interest rate will be higher than normal vehicle loan....and you will be effectively tied to the car until end of tenure. Any earlier you sell your ride...be prepared to come out with a sum of money to redeem your loan.

 

Still....if you come across got bank loan money out at car interest rate....no car also nvm....I just take 50k enuff liao !!

 

Joking only ok...

[Leepee]

If you buy from a private car owner and the owner has no loan to clear before selling you his car, then theoretically getting TWO or more banks to lend you the $80k is very possible.

 

The electronic log card is still in your name under LTA, there is no physical log cards that each banks will ask you to submit to them for safe keeping.

 

Only restrains is Do you dare to do it or not?

 

This is not a proud thing to do, so no one dares to openly say it out.

 

As long as you can service all the banks loan then there is no problem what so ever.

 

The individual $80k better have higher investment returns than the bank interest, in order for you to try this method!

 

Good luck.