Need understanding on Break Even & Early Settlement Fee

[sLapshock]

Hi guys,

 

Sorry if this had been asked, tried to use the search function but to no avail.

 

Anyway i need an understanding of breakeven and early settlement penalty.

 

I currently loaning 8k, 36 months monthly installment and 6% interest per year.

 

Now, i already paid 10 months of SGD 262.30 out of 36 months.

 

How does the breakeven works in case if i wanted to let go my bike?

 

What are the things that i need to know, need to take note?

 

In case if they need to look at my bike, say my bike is rated 8 out of 10.

 

Please advice, thank you.

Edited November 5, 2011 by Kushinagar

[kifakw]

break even means when you sell the bike back to shop, you don't need to fork out a single cent.

 

say you are left with 20 months * 262.20 = $5244

 

Shop is willing to buy back your bike at $5300.

 

theoretically speaking, you are breaking even already.

 

with regards to early settlement fee, admin fee, paper work fee, transfer fee and other misc. you have to check with the shop for further details.

 

that is the meaning of breaking even.

Edited November 5, 2011 by Kushinagar

[sLapshock]

Thanks for the reply,

 

In the case where if they rate my bike in good and perfect condition both physically and internally,

 

1. Is there any certain number of months/payments that i need to meet first before breakeven?

 

3.Not in a hurry bike, just need clear understanding from people who experience with them.

[ulysses_sc]

There is no such rule. Depends on loan amount, interest, resale value of the bike.

 

If you buy a "rare" (low demand) bike at high price, you will take forever to break even.

[iewnuj]

For early settlement, do I pay the interest amount + outstanding principal loan + settlement fee?

or is it payment of outstanding principal amount + settlement fee?

 

thanks

[Demon]

break even means when you sell the bike back to shop, you don't need to fork out a single cent.

 

Let me give you a more financially accurate definition of breakeven.

 

Breakeven point is where your outstanding loan is equal to the compensate from your insurer in the event that your bike is totalled.

Edited November 5, 2011 by Kushinagar

[IvikaRazI]

For early settlement, do I pay the interest amount + outstanding principal loan + settlement fee?

or is it payment of outstanding principal amount + settlement fee?

 

thanks

 

Usual practice that I notice is the first one (interest amount + outstanding principal loan + settlement fee). So far I know ASP does not charge you the settlement fee. I believe they already include it in the amount.

 

If it were me, I will juz continue paying the installments.

[iewnuj]

Usual practice that I notice is the first one (interest amount + outstanding principal loan + settlement fee). So far I know ASP does not charge you the settlement fee. I believe they already include it in the amount.

 

If it were me, I will juz continue paying the installments.

 

Thanks. Asking on the behalf of my friend. Thank goodness my bike is fully paid up =)