Balloon Scheme loan

[Kazuo]

Oh.. One more thing, i was told that my monthly income must be 5 times the installment. If not unlikely to get approved.

[Mockngbrd]

^ What happens at the end of car 10years? Or if you want to sell the car?

[D3badge]

  On 3/5/2012 at 5:04 AM, TVT said:

Yalor, that was my understanding too. Hence the name "balloon scheme" - just like an inflating balloon, it (the loan amount) becomes bigger and bigger year-by-year.

 

Many years ago, I remember one very expensive conti car AD used this scheme to attract buyers. First year payment was less then $1K a month, looks very attractive to anyone on the street. But comes 2nd to 3rd year, the loan amount increases.

 

PML

[MBS7878]

Cars are getting more expensive so the monthly installments are getting higher and higher. It is good to have this scheme to solve the high monthly installment issue so that more preople can own cars. After all, the interest rate is so low now compare to 5-6% in 1997-1998.

Btw, Coe prices are going up again given the number of Coe quota to be reduced in the next review. If you need a car, buy now rather then paying more later.

[Seaweed]

when something become more expensive...people no money to buy...some pple will come out with idea lend pple money to buy....but because fundamentally...those buying actually are poor(cannot afford to buy)....so the risk of default will be higher....with a higher risk of default...the need bigger earnings to justify the risk....so in the end...the total amount the buyer pay end up even more...and make him even poorer....so forget about the what overtrade...balloon thing....can buy then buy...cannot don't force yourself....

[Bobztoise]

  On 4/11/2012 at 6:53 AM, Jerrimie said:

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.

 

Well said.. It works out to be more expensive than the regular loan

I think if the $800 to $600 monthly installment made a material difference to you, you should review your buying decision

 

Works worse for cars with higher OMV since the margins made by the company will be more

[Brendon1980]

  On 4/13/2012 at 8:13 AM, Kazuo said:

Oh.. One more thing, i was told that my monthly income must be 5 times the installment. If not unlikely to get approved.

 

still 5 times meh? or is it just for that scheme? I reckon with the high prices now, even 3X not many can also afford one.

[Kazuo]

  On 4/15/2012 at 4:22 AM, Brendon1980 said:

still 5 times meh? or is it just for that scheme? I reckon with the high prices now, even 3X not many can also afford one.

 

5 times of the end calculation of the balloon scheme.

For example, if the balloon scheme enable you to buy a BMW at $900 monthly, your monthly income needs to be at least $4500.

 

 

[Neutralsg]

  On 4/15/2012 at 3:05 AM, MBS7878 said:

Cars are getting more expensive so the monthly installments are getting higher and higher. It is good to have this scheme to solve the high monthly installment issue so that more preople can own cars. After all, the interest rate is so low now compare to 5-6% in 1997-1998.

Btw, Coe prices are going up again given the number of Coe quota to be reduced in the next review. If you need a car, buy now rather then paying more later.

IMO, if one yearns for a car regardless whether it is an expensive one or just a B & B car and NEED such 'help' (scheme) from banks / finance companies to enable them to own one, then such buyer likely may not have the means to drive such car under normal circumstances.

However, for a car buyer who wishes to buy a car and CAN AFFORD to pay in full or take a normal loan without having to resort ONLY to such scheme to enable them to own the car, then, the decision to accept such scheme makes better sense since such buyers MAY HAVE A REASON (whatsoever that reason may be), to go for such scheme.

However, such buyers who can afford will be far and few between while there may be more of buyers who cannot actually own a car or a luxury car which they may WANT but does not have the means under normal circumstances. Hence, such scheme is often attractive to buyers without the means rather than those who have.

Just my 2 cents.

[King]

YEA!

all bang the wall and DIE C O C K STAND!

 

HAHAHA

 

 

  On 3/5/2012 at 6:03 AM, Soya said:

Looks like the bad ol' days of the 90s are back:

 

Sky high property prices, sky high COE prices, balloon scheme for car financing, bubble tea....

 

And we know how all that ended.

 

[RelaxLah]

  On 4/15/2012 at 3:16 AM, Seaweed said:

when something become more expensive...people no money to buy...some pple will come out with idea lend pple money to buy....but because fundamentally...those buying actually are poor(cannot afford to buy)....so the risk of default will be higher....with a higher risk of default...the need bigger earnings to justify the risk....so in the end...the total amount the buyer pay end up even more...and make him even poorer....so forget about the what overtrade...balloon thing....can buy then buy...cannot don't force yourself....

 

 

...I agree with you totally...

[Mllcg]

i dont understand. why not they deduct the PARF FIRST THEN loan u the amount left.

 

rather than loaning what u need then deducting the PARF which means u still pay quite high interest

[Beehive3783]

  On 1/12/2013 at 7:53 AM, Mllcg said:

i dont understand. why not they deduct the PARF FIRST THEN loan u the amount left.

 

rather than loaning what u need then deducting the PARF which means u still pay quite high interest

Because they are money suckers. Doesn't need a scholar to figure that out

[Wyfitms]

my cousin in law was quite excited abt this scheme... can finally buy his dream C180. Dunno buy already or not...

[Ghostrider]

Last time loan also got many options..

 

Step up...balloon...

 

Then was max 70% loan amount.

 

Step up is gradually going up every year. Balloon is big bomb waiting for owner at the end of loan tenure. Usually when people end of the loan period is happy like F....for balloon is worry like mad. Hahahahaha....

 

I seen many who only view the loan affordability in the form of monthly installments. Enjoy first...worry later.

[Mos_rex]

  On 1/14/2013 at 7:00 AM, Ghostrider said:

Last time loan also got many options..

 

Step up...balloon...

 

Then was max 70% loan amount.

 

Step up is gradually going up every year. Balloon is big bomb waiting for owner at the end of loan tenure. Usually when people end of the loan period is happy like F....for balloon is worry like mad. Hahahahaha....

 

I seen many who only view the loan affordability in the form of monthly installments. Enjoy first...worry later.

 

worry smlj ? after end of loan just give back the PARF only nia...worry for what ? Worry government will not give you back the PARF ?

[Ghostrider]

  On 1/14/2013 at 8:37 AM, Mos_rex said:

worry smlj ? after end of loan just give back the PARF only nia...worry for what ? Worry government will not give you back the PARF ?

 

If its like dat then no worry...just treat it as a car rental lor.

 

But if your last installment is higher than your PARF then how ?

[Calvin79]

  On 1/12/2013 at 7:53 AM, Mllcg said:

i dont understand. why not they deduct the PARF FIRST THEN loan u the amount left.

 

rather than loaning what u need then deducting the PARF which means u still pay quite high interest

 

Put yourself in their shoes...

if u r the one running this scheme, would u deduct the PARF first?