Paying More than the Monthly Amortization

[_Qwerty_]

kagaya din nang ibang loans.. pag natapos mo nang mas maaga yung loan may fee... kasi projected income na nila yung interest na kikitain sayo eh..

[a9828]

most car loans behave similarly as personal or salary loans. hindi sila parang housing loan that you can easily do prepayments and save on interest costs through recomputation. since these are relatively smaller amounts (vs houses)/rates, car loans (from the bank's perspective) already have a defined income statement for every loan transaction. that is, fixed na yung payment mo and amortizations, declared na yung kita. if you pay in advance, tatanggapin naman ni bank yan pero magiging parang prepayment mo lang for either the next few months or the last few instances. either way, talo ka sa cost of money.

assuming you can restructure the loan to make it shorter, either the bank will discourage you from doing this (since mawawalan sila ng kita) or they'll ask for a hefty penalty since they'll have to do paperwork all over again (and alam naman natin yung dami nito whenever you start a loan). understandably, banking has considerable admin work so best na lang talaga to stick with your loan once mag-start na.

ideally for car loans, just follow rule of thumb and pay in 3yrs. if you get some surplus funds while paying, just invest the money somewhere else or use it for another project. no real benefit for to pay in advance, itago mo na lang doon sa account kung saan kinukuha yung pambayad and then pondo mo na lang yun for the coming months. at least, less money to raise later on di ba?

[slapz]

makes sense. but still, an obligation is an obligation. Added flexibility din yung thinking na wala ka nang babayaran after a number of periods, diba? Pero if we factor in Cost of Money, hell, daming instruments na kayang talunin ang interest ng car loan. Hmm. makes me wonder, parang maganda ngang ganun na lang. invest automatically monthly, tapos kapag nagmeet na yung pay-off amount sa investments, payoff na! :D

[makwin]

Any excess payment on top of your monthly amortization is applied to the principal and interest, thus shortens your term if this continues. This is called re-pricing/restructuring. There is no implied ruling that this is not allowed. You may inform your bank if you really would want to push through with it, but I won’t advise it either. The bank has already recorded the “Accrued Interest Receivable” portion of your loan and this is (income) recognized every month thru your monthly amortization. At the time of your loan availment, if you may have noticed, the shorter the term the higher your amortization, pero the lower the rate naman on the part of the bank. You loan is 60 months, when shortened to let’s say 48 months, mababawasan din yung income recognition ng Bank,stop accrual na din sila and for this they may or should I say will charge a certain fee for this, parang sa time deposit placement merong pretermination fee pag di na umabot sa maturity date.

[slapz]

Yep, makes sense. I think I would stick with the loan, I will just enroll the supposed increase in my MA to a regular subscription sa BPI. I will try their new High Dividend fund. ehehe! If I do this, I think I can pay off the loan in less than 2 years.

[1D4LV]

Hi Guys,

Anyone here na naka-experience na na ibaba ang loan terms nila for their cars? Meaning kung dati, 60 months sya, tapos you've paid for more than a year na, and you want to shorten the loan term, possible ba yun? For example, 14K ang MA mo previously, but you want to pay 20K monthly. Meron na bang gumawa ng ganito?

its possible, pero they have to re-calculate so you have to get in touch with them.

[sirmykel]

sa pnb tinanong namen yan resturcturing pero hindi pwede sa branch namen kasi hindi naman daw katulad ng bahay at lupa eh. yung sabi nila samen dati ewan ko lang sa ibang banks

[slapz]

wala pa din ako balita. malamang yung invest nalang monthly, then payoff kapag complete na, ang gagawin ko.

I am the highway...

[JonJon Villegas]

rebate lang ata mangyayari sa ganyan, means kung 14k MA mo then 20k babayad mo… tuloy pa din yung # of months sa pagbabayad mo. Refund at the end of term? hehe not sure parang natanong ko kase yan dati sa isang SA, gusto ko taasan ang dp ko instead of their fix "all-in" promo

[rafmac]

Not all banks would allow this so better check with your bank before payin more than your monthly. What many banks will allow is to pre term your loan meaning making a baloon payment and settling the loan early but from experience maliitblang ang masasave mo dito


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