JerseytoBKK Posted January 25, 2019 Share Posted January 25, 2019 My girlfriend is buying a new Civic and we're putting 50% down. The "interest rate" is supposedly 1.94% on a 48 month loan. How do they calculate interest rate on a car loan in Thailand? What I'm used to using is a mortgage type calculator because the loan amount is a declining balance. So the payment should be 10,390.26 per month. The dealer is trying to use a total interest calculator and claiming a payment of 10,765 per month. Which is correct? Is the dealer trying to pull a fast one? Link to comment Share on other sites More sharing options...
sometimewoodworker Posted January 25, 2019 Share Posted January 25, 2019 14 minutes ago, JerseytoBKK said: What I'm used to using is a mortgage type calculator because the loan amount is a declining balance. So the payment should be 10,390.26 per month. The dealer is trying to use a total interest calculator and claiming a payment of 10,765 per month. Which is correct? Is the dealer trying to pull a fast one? He is, as loans are not calculated on a diminishing amount outstanding and early repayment dose not reduce the "interest" payable by much if anything. Think of it as a loan arrangement fee not interest. Link to comment Share on other sites More sharing options...
JerseytoBKK Posted January 25, 2019 Author Share Posted January 25, 2019 2 minutes ago, sometimewoodworker said: He is, as loans are not calculated on a diminishing amount outstanding and early repayment dose not reduce the "interest" payable. Think of it as a loan arrangement fee not interest. Thanks for the quick reply. I now remember reading threads where people posted that paying off auto loans quicker doesn't reduce the interest payment. Appreciate the help! Link to comment Share on other sites More sharing options...
transam Posted January 25, 2019 Share Posted January 25, 2019 Our lads loan stated that if you pay early you must pay 50% of the agreed period interest.. Link to comment Share on other sites More sharing options...
JerseytoBKK Posted January 25, 2019 Author Share Posted January 25, 2019 2 minutes ago, transam said: Our lads loan stated that if you pay early you must pay 50% of the agreed period interest.. Thanks! Going to the dealer tomorrow so we'll see if that stipulation can be put into the agreement. I got my girlfriend to contact dealers using Facebook and LINE and she was able to negotiate a very good deal without needing to visit multiple dealers. Contract terms including the long list of freebies were sent as an image through LINE. They even sent the delivery/reservation schedule so that we know when the Civic is supposed to arrive at the dealership. Link to comment Share on other sites More sharing options...
theoldgit Posted January 25, 2019 Share Posted January 25, 2019 One thing that caught me out when I had a loan agreement for a car from Tisco was that they added VAT onto the monthly payment, that didn't seem right as I was repaying cash borrowed and I assume I'd already paid VAT on the car, but they assured me that it was and they wouldn't budge on it. Link to comment Share on other sites More sharing options...
VocalNeal Posted January 25, 2019 Share Posted January 25, 2019 tell them you reverse the right to the withholding clause to withhold 3% until year end. Link to comment Share on other sites More sharing options...
robblok Posted January 25, 2019 Share Posted January 25, 2019 12 minutes ago, theoldgit said: One thing that caught me out when I had a loan agreement for a car from Tisco was that they added VAT onto the monthly payment, that didn't seem right as I was repaying cash borrowed and I assume I'd already paid VAT on the car, but they assured me that it was and they wouldn't budge on it. Sound like a scam if the car already had vat included they can't charge vat again on the loan. They can (if banks are not free of vat like in my country) charge VAT on the service feel but not on the load payment part. Link to comment Share on other sites More sharing options...
stevenl Posted January 25, 2019 Share Posted January 25, 2019 49 minutes ago, robblok said: Sound like a scam if the car already had vat included they can't charge vat again on the loan. They can (if banks are not free of vat like in my country) charge VAT on the service feel but not on the load payment part. Tanachart also: VAT on the loan. Link to comment Share on other sites More sharing options...
robblok Posted January 25, 2019 Share Posted January 25, 2019 Just now, stevenl said: Tanachart also: VAT on the loan. That is totally wrong, believe me i should know. It goes against all the principles of VAT. You put vat on services and goods.. not on a loan, that makes no sense. They could ad vat on the interest (if it is not something that is free of VAT). Link to comment Share on other sites More sharing options...
JerseytoBKK Posted January 25, 2019 Author Share Posted January 25, 2019 The contract lists the monthly amount of the loan and the form states that it includes VAT but my girlfriend thinks that VAT isn't charged on car loans. The loan payment is 10,765 monthly per Thai loan arrangement fee method (nice way to look at it - thanks sometimewoodworker). If they used declining loan balance it would be 10,390. So it doesn't look like VAT is added, but we'll find out for sure when we pick up the paperwork tomorrow. Link to comment Share on other sites More sharing options...
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