Elfenstar 3rd Gear January 12, 2016 Share January 12, 2016 Hi guys. Been a while. Hope everyone has been doing well. I'm going to be trading in my car with an existing loan for a new car (and taking minimum loan). I was wondering if anyone has managed to get their bank to waive the early settlement penalty (rule 78) if they took up another car loan from the same bank. ↡ Advertisement 2 Link to post Share on other sites More sharing options...
tenyawph Turbocharged January 12, 2016 Share January 12, 2016 Unlikely to get waiver. My previous car got 1 more year of outstanding loan when I purchased new car. I paid the remaining loan + interest (for 1 year). Link to post Share on other sites More sharing options...
Weez911 Supersonic January 13, 2016 Share January 13, 2016 (edited) Hi guys. Been a while. Hope everyone has been doing well. I'm going to be trading in my car with an existing loan for a new car (and taking minimum loan). I was wondering if anyone has managed to get their bank to waive the early settlement penalty (rule 78) if they took up another car loan from the same bank. Hi, I got 50% waiver from Stanchart when I settled early with them, but the catch was that I took up another auto-loan for my new car with them. That was in Oct 2015. Please call to check if it is still applicable. Edited January 13, 2016 by Weez911 6 Link to post Share on other sites More sharing options...
Maskedrider 4th Gear January 13, 2016 Share January 13, 2016 I had my early settlement with U** and they give me discount for early settlement somemore. Still driving with current car ... 1 Link to post Share on other sites More sharing options...
Hamburger Hypersonic January 13, 2016 Share January 13, 2016 wow something new. I thought its not possible. lucky never anyhow say... 3 Link to post Share on other sites More sharing options...
Spring Moderator January 13, 2016 Share January 13, 2016 Beware of Maybank car loans. On top of the normal rule 78, they charge extra penalty. I was hit when I early settled my 7 yr loan at 5yr 4mths. Apparently it's written in the contract so I can't argue n had to pay up accordingly. 6 Link to post Share on other sites More sharing options...
Elfenstar 3rd Gear January 13, 2016 Author Share January 13, 2016 Thanks guys. Yeah my current finance is offering quite a decent rate. But still on par with a few others so I was thinking of ask to waive at least something or I'll take my biz elsewhere Link to post Share on other sites More sharing options...
Jimmylim 4th Gear January 13, 2016 Share January 13, 2016 Just ask, no harm trying. i did before but unsuccessful. 1 Link to post Share on other sites More sharing options...
yo2020 6th Gear January 13, 2016 Share January 13, 2016 I had my early settlement with U** and they give me discount for early settlement somemore. Still driving with current car ... early settlement penalty is not part of rule 78. this penalty enforced by bank is to penalise ppl whom settle loan early bcoz the bank will earn less interest due to the interest rebate under rule 78. this penalty, if any (usually there is), will b stated clearly on the contract. early settlement discount is not a discount, it's an interest rebate under rule 78. full interest over the full loan duration is computed upfront n add with the the loan amt, it forms the total loan amt. this non-linear (in favour of bank) rebate is given when a loan is settled early, to deduct frm the outstanding total loan amt. ;) 7 Link to post Share on other sites More sharing options...
Maskedrider 4th Gear January 13, 2016 Share January 13, 2016 Good explanation yo2029 For me, the discount define as I'm need not paying full amount loan if I settled earlier. So I have save a few dollar and use it for nice dinner with my family 1 Link to post Share on other sites More sharing options...
Galantspeedz Turbocharged January 13, 2016 Share January 13, 2016 as explained by yoyo, early settlement penalty and rule 78 are totally different things... you can't escape from rule 78 but you can request to waive early settlement penalty i guess DEFINITION of 'Rule Of 78' A method of allocating the interest charge on a loan across its payment periods. Under the Rule of 78, periods are weighted by comparing their numerical values to the sum of all the digits of the periods. The weights are applied in reverse, applying large weights to early periods. that's why unless you intend to drive the car till end of loan... if not, it would be better to try not to get loan.... the interest you actually pay if you sell the first 3yrs is actually crazy Link to post Share on other sites More sharing options...
Forte3737 5th Gear January 13, 2016 Share January 13, 2016 as explained by yoyo, early settlement penalty and rule 78 are totally different things... you can't escape from rule 78 but you can request to waive early settlement penalty i guess DEFINITION of 'Rule Of 78' A method of allocating the interest charge on a loan across its payment periods. Under the Rule of 78, periods are weighted by comparing their numerical values to the sum of all the digits of the periods. The weights are applied in reverse, applying large weights to early periods. that's why unless you intend to drive the car till end of loan... if not, it would be better to try not to get loan.... the interest you actually pay if you sell the first 3yrs is actually crazy What about those on 10 yrs loan previously? Banks make so much during those times 1 Link to post Share on other sites More sharing options...
Galantspeedz Turbocharged January 13, 2016 Share January 13, 2016 What about those on 10 yrs loan previously? Banks make so much during those times they can only make if people wants to borrow 1 Link to post Share on other sites More sharing options...
Thaiyotakamli Supersonic January 13, 2016 Share January 13, 2016 Like T2 say, pay cash if u can afford it Link to post Share on other sites More sharing options...
Fuelsaver Supercharged January 13, 2016 Share January 13, 2016 Like T2 say, pay cash if u can afford itPaying cash no ins n finance rebate leh. Mayb take min loan n tenure more worth since one gonna pay full anyway. 1 Link to post Share on other sites More sharing options...
Blueray Hypersonic January 14, 2016 Share January 14, 2016 wow something new. I thought its not possible. lucky never anyhow say... honestly, I also thought not possible too ... Link to post Share on other sites More sharing options...
Elfenstar 3rd Gear January 14, 2016 Author Share January 14, 2016 Just ask, no harm trying. i did before but unsuccessful.IMHO better than never try Link to post Share on other sites More sharing options...
Elfenstar 3rd Gear January 14, 2016 Author Share January 14, 2016 Like T2 say, pay cash if u can afford itI agree, unless you can make more than the interest paid. Being kiasu I kind of prefer half half which is why I too a 25% loan ↡ Advertisement 1 Link to post Share on other sites More sharing options...
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