Balloon Scheme loan

[Bigbadguy]

Wow can't find much writing on balloon scheme.

 

There must be some clause to protect the bank.

[Dfx16]

Via taking up Ballon Scheme and finish the last installment, are we able to renew COE?

Or by 10 yrs the car will goes back to bank

[Bigbadguy]

Via taking up Ballon Scheme and finish the last installment, are we able to renew COE?

Or by 10 yrs the car will goes back to bank

 

IMO think you can, provided you buy back the parf from the bank, Meaning you buy over the car full value before the COE expires. Then the parf belong to you and you can decide weather to scrape or to renew COE.

[Kazuo]

Yup... The example in the pdf take the full amount for normal and balloon scheme.

 

Doesn't make sense to pay more interest yet lose the parf.

That equate to like $14k additional interest?

[Alim]

 

 

Yeah!

 

But I think max 50% financing would be better

 

Will COE drop if 50% financing? If yes, I support.

[Dragonl]

I think most proably, the loan company will possess the car after the loan expired. Then it will be channel back to the resale market for dealer to resell it again as a COE car. Good deal for the company. For the car owner, you have nothing to sell in vetween the loan to get a new car.

Edited March 8, 2012 by Dragonl

[Lastdance]

Anyone got confirmation what happens when car reaches end of coe with this loan?

[Kelpie]

Hi all,

 

I'm just a layman and not an economist. If one is going for a used car and not interested in getting any money back from the govt after 10 years and yet pay less monthly installment, why not?

 

With interest rate this low now and increasing inflation rate, can't go wrong right? I thought the car dealer would be the one worry more than the buyers.

 

Probably good for someone to get used premium used car without hurting the wallet too much.

 

Regards,

 

 

[Azman79]

So far only knew tokyo leasing doing this scheme,which they are quite stringent in approving loans.

Anyone knows if other banks do offer this scheme?

[Kelpie]

I would think so, since they have to shoulder large part of the risk and not so for the buyers, IMHO.

 

Regards,

[QQDreamer]

what if the car is sold before the COE expires? Is there any clause to say that if i take up this balloon scheme than i need to stick to this car until the end of COE expires. Also i heard they only do for high OMV cars eg: BMW,mercs etc... anyone can confirm this? Does it applies to other normal cars eg: jap, korean cars?

Edited April 11, 2012 by MkMan

[Zanter]

Then who is the one holding on to the PARF value?

The loan company?

 

Tis should be legalized long ago!!

Right now we are paying interest on the PARF value due to high loan amount(that artificially added in the PARF amount).

 

I support ballon scheme, as the loan amount is lower!

 

You are also paying interest on OMV, ARF, COE, GST etc

[Jerrimie]

this scheme very bo hua. The factor in the parf value before including interest, den remove parf value to divide by number of months. but u already paying interest on the parf.

[Vhtfhwlego]

this scheme very bo hua. The factor in the parf value before including interest, den remove parf value to divide by number of months. but u already paying interest on the parf.

u see, they need to make $.

Then also, if that one use this scheme to buy a car and after COE expire, no parf....

Will Tokyo take over the car afterwards?

 

If that COE crash, tokyo take over, pump new 10 years PQP, "owner" can eat his sour grape.

[Tailgatepro]

Bro, quick question - Let's say u drive it till scrape, then what? the scheme did not factor in the scrape value...hence we scrape it, we don't get anythign back but the financing co will get the scrape $$?

what if we want to continue using the car > 10 yrs?

 

do u know how hard to get the answer. I been calling tokyo leasing abt this and they always ask me to ref back to my car dearler and car dearler also not so sure.

after a few call and at last i finially got their answer,

 

Tokyo said after 10 year and if want to renew COE, and if we using PARF $10k, so u need to paid $10k back WITHOUT interest. Hope that ladies don't lie, so don't quote me this word. information By phone, not email.

 

For scrape, scrape $$ belong to us only.

This is all i can get for the info.

 

 

[QQDreamer]

got so good meh???

[Kazuo]

Yes. This is what a car salesman told me as well.

And the scheme is more for car with high parf value.

That's why average car with low OMV wont be offered this scheme.

 

[Chang3f_2]

Here's a detailed information that I got from Speed Credit, a car financing company here in Singapore. They said that the balloon Scheme is a loan scheme whereby a higher interest rate is applied to the primary loan amount and then the minimum PARF rebate is deducted before dividing the loan into monthly installments.

 

With the Balloon scheme, you can only loan 90% of the purchase price. Only vehicles registered from 2003-2008 is eligible for this scheme, where the interest rate is 2.68%. And yes, only Century Tokyo Leasing currently offers this scheme.

 

Here's the example they gave me:

 

Car's selling price - $56,800

Loan Amount - $51,120 (90% (allowable loan) of 56,800)

PARF - $12,100

Car's Vehicle Date - May 2007

Interest Rate - 2.68%

Loan Period - 70 months

 

Given the above figures, under a normal loan with a 1.88% interest rate, monthly installment will be $810.37.

 

But under the balloon scheme, it will only be $671.60.

 

Here's the detailed computation:

 

 

Balloon Scheme Calculation:

 

Loan x Interest Rate x Loan Period (Months) / 12 + Loan - PARF

__________________________________________________________

 

Loan Period (Months)

 

 

= $51,120 x 2.68% x 70 / 12 + $51,120 - $12,100 (Total - $47,011.76)

______________________________________________________

 

70

 

 

= $47,011.76

_____________

 

70

 

Monthly Instalment - $671.59

 

So in short, under a balloon scheme, your PARF will be gone but you get the advantage of paying a lesser monthly installment.

In the end, i turned down the balloon scheme and just asked them to apply me for the usual 1.68% and 1.88% loan. But of course, it's always a case by case basis, others might find balloon scheme better, some won't.