Rabu, 6 Jun 2012

Can we shorten our car loan

    The car loan installment is something that we usually put in top five of our paylist every month. Is it possible to reduce the payment period i.e : from 9 years to 4 years by paying off in advanced the remain balance of our car loan or can we shorten the term of our car loan?.

Can we reduce the loan amount of our car loan


            According to the Hire Purchase (HP) Act 1967 stipulates that you  cannot shorten the term of your loan by increasing your monthly installments or by partially paying off the loan.Your loan must stay at the term originally agreed upon by yourself and the lender(bank). This is because when you fix the tenure of your car loan, the interest due is calculated using a flat rate and the monthly installments fixed for the duration of the loan.
            A hire purchase loan is different from a housing loan, where you may have a variable interest rate based on fluctuating standards such as the Base Lending Rate. With a housing loan, you may be able to make extra payments and shorten the loan period.With your car loan, any extra payment you make will be  treated as an advance payment of future installments. If you pay your car loan in full, you will receive a rebate from you lender for interest that would have been payable in future installment periods, in accordance with the provision of the HP Act.

Can we shorten our car loan
Reviewed by kenny977world on Sept 04 2014
Rating: 4.6

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