Penalty fee for early settlement of loan?

[nayrB]

Thought of paying my remaining 6 months loan amount to fully settle my loan, but bike shop says there will be a penalty fee of $800 if I want to fully settle my loan.

 

Is there such T&C's?

[BlackDawn]

Did you read your hire-purchase agreement?

[rezz_shaz]

yes there is..... depend on bikeshop, amount varies.....

[Constructicon]

Well, I guess when we sign the Hire Purchase Agreements( the loads of forms) when we purchase bike/s, we did not really go into details.

But basic issues like early settlement fees (if any) should be a common knowledge/understanding before signing.

 

Well, if there is a settlement fee/ penalty, then just carry on with the installments since I dont see the point in paying that extra, good money for nothing.

[contrarian]

Your Hire Purchase Agreement will have your answer. The part that says

---

ADDITIONAL CHARGES the owner will impose for early settlement of a hire-purchase agreement:

Early settlement fees

Processing fees

---

No agreement will call these a penalty.

[nayrB]

Seriously, i did not read the agreement when i signed, and the sales person also nv inform.

Anyway, the reason I wanna early settlement is because I wanna sell the bike fully to another owner with no strings attached, (e.g. Sub rider).

 

So is there any other way to sell my bike? As it is time consuming looking for a sub-rider.

[Constructicon]

Seriously, i did not read the agreement when i signed, and the sales person also nv inform.

Anyway, the reason I wanna early settlement is because I wanna sell the bike fully to another owner with no strings attached, (e.g. Sub rider).

 

So is there any other way to sell my bike? As it is time consuming looking for a sub-rider.

 

Well, seems to have no other choice than to pay the penalty then. But the issue is that you will be transferring that penalty to the buyer.

 

Many bikes sold/ selling in the forum are by carry-on-installments anyway.

[rezz_shaz]

$800 penalty for outstanding loan of 6 months?? that's quite high....

[eement]

ya that is quite stupid but u muz noe when u sign on the paper ba

[nayrB]

Usually this applies to in house finance, was too careless.

[Cracked]

Can any1 explain e logic behind e early settlement fees? I dun understand why dey dun want their $ now rather den later?

[yenyenpark]

if u follow strictly to hire purchase act, there are some rules to follow..

 

normally financial institute wanna earn $$ by charging some interest on the loan given out..

 

and early settlement is like the commitment of the loan.. however, many ppl choose to to do early settlement to cut down the interest $$ earned... it's possible but the financial institute will still earn by charging "early settlement fee"..

 

 

 

 

http://statutes.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?actno=REVED-125&doctitle=HIRE-PURCHASE%20ACT%0A&date=latest&method=part

[Maja]

if u follow strictly to hire purchase act, there are some rules to follow..

 

normally financial institute wanna earn $$ by charging some interest on the loan given out..

 

and early settlement is like the commitment of the loan.. however, many ppl choose to to do early settlement to cut down the interest $$ earned... it's possible but the financial institute will still earn by charging "early settlement fee"..

 

 

 

 

http://statutes.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?actno=REVED-125&doctitle=HIRE-PURCHASE%20ACT%0A&date=latest&method=part

 

so for eg the loan you take is for 2 years but after 1 year you decided to pay the remaining amount in full. so does it mean that you would be actually paying less if you settle your loan early compared to what you would pay after the 2 years if you decided not to do an early payment?

[yenyenpark]

so for eg the loan you take is for 2 years but after 1 year you decided to pay the remaining amount in full. so does it mean that you would be actually paying less if you settle your loan early compared to what you would pay after the 2 years if you decided not to do an early payment?

 

depends on ur early settlement penalty and interest saved.. some charges super high early settlement to discourage u from doing early settlement..

[nayrB]

depends on ur early settlement penalty and interest saved.. some charges super high early settlement to discourage u from doing early settlement..

 

But the monthly installments are already instilled with interest right? I just want to pay the installments with interest so that i can sell off my bike.

[Cracked]

yep.. that's the thing. If we offer to pay the installments in full, e interests are already calculated in what. Or am I missing something here?

[yenyenpark]

But the monthly installments are already instilled with interest right? I just want to pay the installments with interest so that i can sell off my bike.

 

yep.. that's the thing. If we offer to pay the installments in full, e interests are already calculated in what. Or am I missing something here?

 

true, by right there is no reason why they need to keep you from paying full before the deadline but seems so bike shop practice different from the book..

[rimondl]

bro.. i also kanna early settlement $300 by leong **** motor!!! todAY

my instalment left 18 month, they din deduct any interest for early settlement..

somemore need to pay 300 extra..

i din read the hp t&c.. so i lan lan pay them lor.. FK!

Edited August 6, 2010 by rimondl

[ngxrasdf]

why not you pay everything back to them hence no need to go down to pay every month

 

6 months only, very fast one

[nayrB]

Will try. Thanks.

[septemberglory]

For S1 motoring do u guys noe how much is the early penalty? 7mths left tot of selling my bike