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Car Loan Calculation

Monthly installment shall be:

[ Loan amount + (Loan amount x Interest x Years) ]
divided by [ no of years x 12 months ]

 Example 1:    

 Loan amount:  

    100,000

 Interest:  

     4%

 Loan period:  

    5 years

 Total repayment amount:  

 = 100,000 + (100,000 x 4/100 x 5)
   = 120,000

    Monthly  Installment     = 120,000 / 60 = 2,000

Example 2:

 Loan amount:  

    100,000

 Interest:  

     4%

 Loan period:  

    7 years

 Total repayment amount:  

 = 100,000 + (100,000 x 4/100 x 7)
   = 128,000

    Monthly  Installment     = 128,000 / 84 = 1,523.81

 

Comparison: Car loan and Housing loan

   Car  Housing
 Interest  Flat  Reducing
 Asset  Negative  Positive
 Wealth*  Depleting  Accumulating
 Value  Appreciate  Depreciate 
 Financing type  Hire-purchase  Mortgage

 *Top-up might be required for full-settlement of your car loan,
   subject to resale value of your car and length of the loan.

 

 

 

 

 

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