early repay of car loan

[MrJ]

Hi All,

 

my car is financed with Kasikorn Leasing, total 60 months - now after 1.5 years I want to pay the outstanding amount at once. Does anyone have experience with that? Shouldn't be a problem, but don't want to pay additional fees.....

Thanks

[transam]

Read the agreement..If you don't read Thai just look at the "%" figures. Our lads ride said you must pay a minimum of 50% of the total interest if pay early..

Edited April 24, 2018 by transam

[Wiggy]

I had a car financed through Tisco bank. I wanted to pay it off early and contacted the bank to see how much was outstanding (1 year left to pay out of four). Went to a branch and paid it. I then had to go to their head office to finalise everything and collect the blue book. Straightforward, but time consuming. There was no more or less interest to be paid.

[stevenl]

No extra fees. But check with the bank, you may get a reduction on the outstanding interest.

[transam]

Be interested to know what the OP's finance agreement says for early payment.........Let us know....

[Just Weird]

22 hours ago, MrJ said:

my car is financed with Kasikorn Leasing, total 60 months - now after 1.5 years I want to pay the outstanding amount at once. Does anyone have experience with that? Shouldn't be a problem, but don't want to pay additional fees.....

Thanks

It's as simple as this, all finance companies/lenders allow early settlement, none of them encourage it, some will charge you fees for their loss of interest, some may not.  

 

The only way to find out anything specific about your loan is to ask KL, it will not be negotiable and KL will not listen to anything you may quote from anonymous Thaivisa members if you try!   No one here will be able to give you an answer that means anything in connection with your agreement, have you not asked the lender?

[misterphil]

We were going to do this but my wife was advised that if she did pay it off early her credit history record would not be recognised next time she wanted finance. This is because she did not fullfill the 60 month finance contract. 

 

We would of saved approx. 5K paying off 2 years early so didnt bother. 

[MosMing]

2 hours ago, misterphil said:

We were going to do this but my wife was advised that if she did pay it off early her credit history record would not be recognised next time she wanted finance. This is because she did not fullfill the 60 month finance contract. 

 

We would of saved approx. 5K paying off 2 years early so didnt bother. 

Paying a loan off early has a negative impact on your credit rating? Sounds like a load of naughty bits to me. It stands to reason that a lender will discourage someone from paying off their loan early coz they'll miss out on lots of juicy interest.

And as for not considering 5000 baht a worthy saving for early settlement: if you're that well off, why did you finance the car in the first place? 

[GreasyFingers]

My only experience was that you had to pay the full amount of interest outstanding so there was no benefit. This was not KB but a finance company.

[wgdanson]

16 minutes ago, MosMing said:

And as for not considering 5000 baht a worthy saving for early settlement: if you're that well off, why did you finance the car in the first place? 

Bht 5000 over two years is about Bht 50 a week, not even a Chang. So, not really worth worrying about either way.

[MosMing]

When you put it like that then yes, it doesn't amount to much.

I'm thinking more about the extra monthly income to be had by not having to pay the instalments. My wife’s Yaris is costing us 6000 baht a month on a 7 year loan. That's money worth having. 

[scorecard]

4 hours ago, misterphil said:

We were going to do this but my wife was advised that if she did pay it off early her credit history record would not be recognised next time she wanted finance. This is because she did not fullfill the 60 month finance contract. 

 

We would of saved approx. 5K paying off 2 years early so didnt bother. 

 

Have you asked the HO of the bank about any effect on future credit rating?

 

Call their call center ask to speak to their vehicle financing dept., and get specific answers to all your questions. 

 

 

Edited April 25, 2018 by scorecard

[scorecard]

4 hours ago, misterphil said:

We were going to do this but my wife was advised that if she did pay it off early her credit history record would not be recognised next time she wanted finance. This is because she did not fullfill the 60 month finance contract. 

 

We would of saved approx. 5K paying off 2 years early so didnt bother. 

 

 

"...but my wife was advised that if she did pay it off early her credit history record would not be recognised next time..."

 

Just wondering who told her this gem?

 

I'm aware of a motor cycle sales showroom in Buriram which insists that you can get a lower buying price if you buy on hire purchase (sales showroom is the agent for the finance company).

 

Reality is of course the 'better buying price' is smoke and mirrors sales talk, the sales showroom wants you to take a hire purchase contract because they get a commission on the financing agreement.

 

 

[MrJ]

12 hours ago, transam said:

Be interested to know what the OP's finance agreement says for early payment.........Let us know....

my contract states 50% interests has to be paid as well, will let my Thai staff call and try to finish it asap = will keep you updated

[sometimewoodworker]

Most vehicle finance contracts in Thailand are totally different from the traditional loan contracts in the west.

 

They quote an interest rate but they do not really have one. In reality it is a loan arrangement fee and is collected from the payments you make at the start of the loan.

 

The effect of this is that because you aren't actually paying interest on the outstanding amount of your loan during the term of the loan, paying the loan off early makes virtually no difference to the total amount you pay. 

 

They have a small saving of administration costs and costs and some of that savings may be passed on to you.

 

They will sell the loan as having an interest rate, you can do the math and the interest rate will work out to the percentage quoted but if, when you are arranging the loan you really check (and you will have to work hard to get an answer) about early payments reducing the total amount due, you will usually find it makes no difference even paying off a 5 year loan in 6 months.

[stevenl]

1 hour ago, sometimewoodworker said:

Most vehicle finance contracts in Thailand are totally different from the traditional loan contracts in the west.

 

They quote an interest rate but they do not really have one. In reality it is a loan arrangement fee and is collected from the payments you make at the start of the loan.

 

The effect of this is that because you aren't actually paying interest on the outstanding amount of your loan during the term of the loan, paying the loan off early makes virtually no difference to the total amount you pay. 

 

They have a small saving of administration costs and costs and some of that savings may be passed on to you.

 

They will sell the loan as having an interest rate, you can do the math and the interest rate will work out to the percentage quoted but if, when you are arranging the loan you really check (and you will have to work hard to get an answer) about early payments reducing the total amount due, you will usually find it makes no difference even paying off a 5 year loan in 6 months.

Sorry, not true.

 

It is intere43st, but it is calculated on the whole loan, not on just the outstanding amount. Therefor the percentage quoted can be about tripled compared to many western countries.

[sometimewoodworker]

1 hour ago, stevenl said:

Sorry, not true.

 

It is intere43st, but it is calculated on the whole loan, not on just the outstanding amount. Therefor the percentage quoted can be about tripled compared to many western countries.

No it isn't, not in the accepted meaning of the term. It's a loan arrangement fee that they call interest, and it is paid out of the first few payments.

[transam]

Our lad took out a 400,000bht loan for a car and wanted to pay it off in a couple of months time when his job loan came through..

He bought a car at a tent and a bank rep was told what he wanted and the bloke sorted the paperwork which he signed without reading it...

 

His money came through and he asked for a settlement figure.

 

It came back over 100,000bht over the expected figure. After listening to the family tears I asked to see the paperwork, I don't read Thai but I can understand the figures.

The rep had sold him a 7 year loan where the interest added up to over 200,000bht .......and for early repayment 50% must be paid...

 

So, a meeting was arranged at the bank to sort out the rep selling this loan when he knew what was wanted, he obviously wanted the big commission.

 

At the meeting the rep did not turn up and the bank quoshed the loan paperwork that was miss sold..

[transam]

6 minutes ago, sometimewoodworker said:

No it isn't, not in the accepted meaning of the term. It's a loan arrangement fee that they call interest, and it is paid out of the first few payments.

Nope...

[Chongalulu]

3 hours ago, sometimewoodworker said:

No it isn't, not in the accepted meaning of the term. It's a loan arrangement fee that they call interest, and it is paid out of the first few payments.

Sorry,but you clearly have no financial acumen or knowledge. The interest rate quoted is NOT what in the West would be termed APR (annualised % rate),or AER (annual equivalent rate)which is the real interest rate you pay. If you borrow say 1000 baht and you pay nothing back until 1year later when you pay 1200 baht that is true 20% interest. If you immediately start paying back  1000 baht per month for 12 months the actual interest rate is much higher because you have started to repay the capital sum over the coming months but are still being charged interest on the full capital sum. 

[stevenl]

22 hours ago, sometimewoodworker said:

No it isn't, not in the accepted meaning of the term. It's a loan arrangement fee that they call interest, and it is paid out of the first few payments.

Again, no.

[JaseTheBass]

My only experience was that you had to pay the full amount of interest outstanding so there was no benefit. This was not KB but a finance company.

Yes. This is norm.

The OP should ignore all the other nonsense posted in this thread.

Sent from my R2D2 droid using my C3P0 manservant

[transam]

3 minutes ago, JaseTheBass said:

Yes. This is norm.

The OP should ignore all the other nonsense posted in this thread.

Sent from my R2D2 droid using my C3P0 manservant
 

So why does our lads agreement state minimum 50% of interest to be paid if early repayment...?

[cornishcarlos]

21 hours ago, nchuckle said:

If you immediately start paying back  1000 baht per month for 12 months the actual interest rate is much higher

 

No shit, 12000 baht as opposed to 1200 baht !!!

[MrJ]

update - as quoted earlier got conformation from Kasikorn Leasing, I only have to pay 50% of the total interests  + outstanding balance and 1.300 THB to change the name in the book - so in total I save about 19.500 THB interests, but this was not the reason for me, I just got some additional funds and want peace of mind and the loan of my shoulders....

 

thanks all for the feedback