Reloan: Transparent

[misterbean]

Originally posted by Tyrian@Jan 11 2006, 04:01 PM

If omitting of credit risk for bike loan is omitted, isn't the bike shop putting more risk in themselves? car dealers requires proof of income to ensure that the person would not default on the loan. i see no reason why bike shop can't do that.. now i smell sterotyping that bikes are poor man's transport..

 

i see no link between high accident rates and high interest rates.. if repair cost is a concern, the car owner will definitely claim more than a bike would..

 

if i have 100K cash, and i lend it just to one person, my risk is very concentrated to that person only.. anything happened to that person and i will lose out big time.. if i spread my risk to 5 bikers lending them 20K each, my risk is reduced to 20% per person.. although not a diversified investment, it is still better than having 100% risk on 1 person.. it is always easier to steal a car at one time than to steal 5 bikes at one time

 

i have to agree with u regarding competition for car loans.. bike loan has very little competition which is very sad i would say..

 

these are juz my humble opinions..

 

at the end of the day, i feel that bike loans should be lower than car loans based on the amount of money that is being lended by the banker.. like i said in the earlier post, it is bullshit to charge 8% for $23 and 5% for $72K..

Stereotyping is when you assume all bikers are poor. Here, I am comparing an average biker to an average car owner.

 

My assumptions:-

 

1) The average biker is likely to earn less than the average car owner. This is a critical assumption becos it means they have different credit risk profiles.

 

2) There is a higher chance that a biker will die/suffer permanent disability from the use of his machine. Probability that there is a total loss in the value of HP asset is also higher. When this happens, you will need to fall back on debt recovery from the disabled person or the guarantor. More complications? Additional legal procedures and fees? I would think so.

 

3) Personally, I would rather deal with one customer who has satisfied all my credit assessment criteria rather than to deal with 10 bikers whose credit risk are not assessed at all. As to why bikers credit risk are not assessed, think of the no. of bikers who will fail to secure a loan if they need to submit proof of income. Which also goes back to explain my first assumption.

 

Your case is a bit special because you actually have credit risk that qualifies you for a car loan. So you find yourself paying a lower rate of interest on the larger quantum. But a lot of bikers out there may not share the same credit ratings. And unfortunately, bike shops or finance companies are not giving preferential rates to those with good credit ratings. At least, not yet

[housejam]

I bought my bike there ....a year back ......

 

:cheeky:

[Strong Eagle]

Are bike loans in Singapore fully amortized? Or do they use a different method to compute interest which actually raises the annual percentage rate?

[contrarian]

Originally posted by Strong Eagle@Jan 11 2006, 06:48 PM

Are bike loans in Singapore fully amortized? Or do they use a different method to compute interest which actually raises the annual percentage rate?

no, most of them use the flat rate rather than the amortised rate. which means the effective rate is a lot higher than it's quoted.

[Strong Eagle]

Originally posted by contrarian@Jan 11 2006, 07:38 PM

no, most of them use the flat rate rather than the amortised rate. which means the effective rate is a lot higher than it's quoted.

You mean they compute as simple interest over the life of the loan?

 

For example, I buy a bike for $1000 at 12 percent per year over three years. They charge me $120 per year for a total of $360 interest? Wow! The actual annual percentage rate there is 22.57 percent.

[lo-on]

what i understand of what Pleasure Motorsport is doing is that when they says example 10% per year for 3 years for a loan of $1000, it is 30% for 3 years at a interest of $300 ...

 

So the total will be $1300 altogether .... No other hidden costs, GST or whatsoever ....

[Strong Eagle]

Originally posted by alj@Jan 12 2006, 01:51 PM

what i understand of what Pleasure Motorsport is doing is that when they says example 10% per year for 3 years for a loan of $1000, it is 30% for 3 years at a interest of $300 ...

 

So the total will be $1300 altogether .... No other hidden costs, GST or whatsoever ....

For a fully amortized loan that gives you an actual annual percentage rate of 19.05 percent. Not a bad return on cash.

[lo-on]

Originally posted by Strong Eagle@Jan 12 2006, 02:53 PM

For a fully amortized loan that gives you an actual annual percentage rate of 19.05 percent. Not a bad return on cash.

on i just quoting an example on the 10% per annual interest rate. They actually charge 4.75% for 2nd hand bikes per annual ....

 

just to clarify and not to mislead on the example

[Strong Eagle]

Originally posted by alj@Jan 12 2006, 02:57 PM

on i just quoting an example on the 10% per annual interest rate. They actually charge 4.75% for 2nd hand bikes per annual ....

 

just to clarify and not to mislead on the example

OK... so getting a loan of $2500 at 4.75 interest for three years ends up as:

 

Total interest = 2500 * 0.0475 * 3 = 356.25

Total loan amount (P&I) = 2500 + 356.25 = 2856.25

36 monthly payments = 2856.25 / 36 = 79.34

 

Actual annual percentage rate = 9.40.

 

So one thing is fer sure: When comparing interest rates from various dealers or credit companies, you should get the total interest charged to determine the real amortized annual percentage rate.

[mad_man]

juz got a loan fr them.. miss chan really writes down everything you need to know and pay. nothing hidden, all in black and white. den i like wat she do, she will photo copy the piece of quotation and keep one for her reference and one for the client. so if the client comes back den she will have dat as reference. both thumbs up for them:cheer:

[lo-on]

Originally posted by Strong Eagle@Jan 12 2006, 06:47 PM

OK... so getting a loan of $2500 at 4.75 interest for three years ends up as:

 

Total interest = 2500 * 0.0475 * 3 = 356.25

Total loan amount (P&I) = 2500 + 356.25 = 2856.25

36 monthly payments = 2856.25 / 36 = 79.34

 

Actual annual percentage rate = 9.40.

 

So one thing is fer sure: When comparing interest rates from various dealers or credit companies, you should get the total interest charged to determine the real amortized annual percentage rate.

well that's the best and most honest shop aound so far right? I would perfer to pay $79.34 for 36 months based on the example u painted compared to some other shops when u might have to pay more than what is listed right?

 

Or what other shops or finance institute u would recommend in singapore

[Strong Eagle]

I think you have made the point exactly. If they are transparent and show you exactly what the charges are, then that is a very good thing because it lets you know what you will be paying. Then you can decide if you have a good deal or not.

 

This is a much better situation than some of the "carrots" have run into... signing documents with blank spaces, not seeing a breakdown of total charges, only to learn later that they have been really stuck with outrageous financing terms.

 

I've never bought from Pleasure Motor Sports but I did go look at a Valkyrie they had for sale. They were very professional and courteous and the shop was very clean.

 

I don't have a recommendation for a financing shop. In fact, it is nearly impossible for me to get financing. Even though I have a very good salary and excellent credit and assets back home, the fact that I have an EP stops all of them from letting me finance... you would think I was trying to borrow 2 million dollars.

 

I think it is excellent that Pleasure Motorsports operates in a transparent way. I am just showing that when someone honestly gives you the correct facts and figures you can accurately compute how much your financing will cost you... and this is something every buyer ought to do before signing on the dotted line.

[lo-on]

Originally posted by Strong Eagle@Jan 13 2006, 08:15 AM

I think you have made the point exactly. If they are transparent and show you exactly what the charges are, then that is a very good thing because it lets you know what you will be paying. Then you can decide if you have a good deal or not.

 

This is a much better situation than some of the "carrots" have run into... signing documents with blank spaces, not seeing a breakdown of total charges, only to learn later that they have been really stuck with outrageous financing terms.

 

I've never bought from Pleasure Motor Sports but I did go look at a Valkyrie they had for sale. They were very professional and courteous and the shop was very clean.

 

I don't have a recommendation for a financing shop. In fact, it is nearly impossible for me to get financing. Even though I have a very good salary and excellent credit and assets back home, the fact that I have an EP stops all of them from letting me finance... you would think I was trying to borrow 2 million dollars.

 

I think it is excellent that Pleasure Motorsports operates in a transparent way. I am just showing that when someone honestly gives you the correct facts and figures you can accurately compute how much your financing will cost you... and this is something every buyer ought to do before signing on the dotted line.

Well nice talking and knowing u too Strong Eagle

 

What i am trying to say is so far Pleasure Motorsport has been as clean and transparent as possible compared to other alot of bike shops in singapore. Yes i don't deny that there could be other such shops around but is really coming to extinct ....

 

If u are looking for some honest and transparent, Pleasure Motorsport is one of them

[rogerfock]

just wondering will pleasure motorsport provide loans ? for e.g. to me to purchase a bike from a private owner?

[lo-on]

Originally posted by rogerfock@Jan 14 2006, 10:55 PM

just wondering will pleasure motorsport provide loans ? for e.g. to me to purchase a bike from a private owner?

Yes, they do provide that loan for u to buy from private owners

[Guest enHANZed]

anyone knows how much they can loans and wat are the min. requirements ? like 80% loan min salary 2k/month or something

[MiCmAsTa]

Originally posted by enHANZed@Jan 16 2006, 05:22 AM

anyone knows how much they can loans and wat are the min. requirements ? like 80% loan min salary 2k/month or something

Someone did PM me about this b4 (and I think its you right?) I delete the PM by accident.

 

Their Minimum Requirement is that you have a stable income, Need a Grantor (Reguardless of your age) and then they will access to your case.

 

Maybe you wanna call them to clarify all your doubts?

[Guest enHANZed]

yes it was me ...i was begining to think...wa lau change to fazer dunt bother about us already haha

[MiCmAsTa]

Originally posted by enHANZed@Jan 16 2006, 06:55 PM

yes it was me ...i was begining to think...wa lau change to fazer dunt bother about us already haha

Bo leh... Wah liao... Say me until like that..

 

They have shifted to Ubi already. Maybe you wanna drop by to check out with them?

[Shawn--]

Interest rate per annum: 4.75%

 

 

Its a fixed rate there? Will they like see diff pple give diff rate? If really so, da rate is damn attractive. hee

[lo-on]

Originally posted by Shawn--@Jan 18 2006, 09:26 AM

Interest rate per annum: 4.75%

 

 

Its a fixed rate there? Will they like see diff pple give diff rate? If really so, da rate is damn attractive. hee

It's fixed lah ....

[philiplolc]

only thing is, if you sell bike or full payment early... there is no rebate of remainder... eg.. if you loan 5 yrs, but full payment after 3 yrs, the last 2 yrs interest is gone.

[Shawn--]

wow. thats good. Unlike my rocky coi shop.. A****t. But anyway i'm just a sub rider register at there. Gotta pull out asap.

 

Another qns, if i do reloan at pleasure, do i have to pay any downpayment? Like 3 months advance or something etc..?

[wacko]

yah..

i wanted to ask them..

can't seem to get thru their line..

if lets say a guy selling his bike for 1k..

then insurance and transfer fee can be included in the reloan amount..?

how much money must be forked out other than the 150 processing fee

[misterbean]

They will need the seller to bring the bike down to their shop for an assessment on the condition ... then they will let you know how much they are prepared to loan. Say if they are willing to loan $5k but the seller insists on a selling price of $6k, you need cash to pay the $1k difference. Transfer fee can be included in the bike price but as mentioned, if their approved loan amount is less than the selling price, it means the fee is not covered.

 

For insurance, it is not included in the loan and I believe you also need to go through them.