Comments on: Should you pay off your loan earlier with your spare cash?

By: LOKE

LOKE — Mon, 02 Mar 2009 21:39:46 +0000

The decision on whether to get car loan is heavily dependent on the flat interest rate and repayment period…

By: imDavidLee

imDavidLee — Thu, 27 Nov 2008 02:52:16 +0000

if the saving interest rate is higher than car loan interest rate, then u should pay ur debt slowly in stead of lum sum payment…

By: poc

poc — Sun, 23 Nov 2008 06:45:29 +0000

how do you derive effective interest rate from hire purchase advertised rates, looked up to wikipedia on nominal vs effective rates but i think those are of diff definition?

yea maybe can send me the excel workings

By: jeanchai

jeanchai — Fri, 19 Sep 2008 16:59:27 +0000

Hi JC,

Ya, you are right that the bank will not offer monthly FD interest rate of 3.75%. But I am merely using it in the example to give an idea how we should view our options by comparing apple to apple. Once we know the concept behind the example, the figures are for us to put in.

To be more realistic, we can use monthly FD rates (depends on each bank) and top up the same amount monthly accordingly. Hence, except for the rate I used here, the computation is indeed a realistic example.

By: bluffy83

bluffy83 — Wed, 27 Aug 2008 01:11:43 +0000

just keep blabbering..

By: JC

JC — Tue, 26 Aug 2008 07:31:40 +0000

It is true that the second calculation yields higher returns. However, the bank will not be able to offer FD interest at 3.75% if Mr. A is going to start a deposit at RM1,833.33 and will top up the same amount every month up to 60 months. The interest Mr. A earns from monthly deposit will vary from RM100k in a lump sum deposited in FD account at 3.75% p.a.

How are we going to calculate more accurately for monthly deposit of 1 month up to 60 month in more realistic matter?

Is there any bank giving 3.75% p.a. for a 12 month FD placement of RM5k?