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Tuesday, 30 September 2014
Wednesday, 17 September 2014
HIRE PURCHASE FINANCING: THE EFFECT OF NOT MAKING PAYMENTS
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In a hire purchase agreement, it involves the hirer and the vehicle, whereby the hirer agree to hire the vehicle by making prompt monthly installments to the banking institution for a specific period of time and subsequently purchase it.
A common problem associated with hire purchase financing is the effect of not making the monthly payments on time which will lead to repossession of the vehicle.
This problem usually occurs when the hirer defaults on the monthly installments. Thus, the banking institution as the owner has the right to repossess the vehicle under two circumstances whereby;
• No payment has been made for 2 consecutive monthly installments
or the final installment
• There is a default in payment for 4 consecutive monthly
installments in the case where the hirer is deceased
If there is a guarantor for the above case scenario, then the guarantor will be responsible for the non-payments. Therefore, is is highly advised not to delay the monthly installments to avoid repossession of the vehicle.
Remember, the balance due will continue to increase for as long as the hirer is subject to late payment penalty. It is best to contact the bank to discuss further if there is a problem involved.
Read More : http://MyFinance.com.my/articles/detail/9121411410
We also provide other various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
In a hire purchase agreement, it involves the hirer and the vehicle, whereby the hirer agree to hire the vehicle by making prompt monthly installments to the banking institution for a specific period of time and subsequently purchase it.
A common problem associated with hire purchase financing is the effect of not making the monthly payments on time which will lead to repossession of the vehicle.
This problem usually occurs when the hirer defaults on the monthly installments. Thus, the banking institution as the owner has the right to repossess the vehicle under two circumstances whereby;
• No payment has been made for 2 consecutive monthly installments
or the final installment
• There is a default in payment for 4 consecutive monthly
installments in the case where the hirer is deceased
If there is a guarantor for the above case scenario, then the guarantor will be responsible for the non-payments. Therefore, is is highly advised not to delay the monthly installments to avoid repossession of the vehicle.
Remember, the balance due will continue to increase for as long as the hirer is subject to late payment penalty. It is best to contact the bank to discuss further if there is a problem involved.
Read More : http://MyFinance.com.my/articles/detail/9121411410
We also provide other various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
Thursday, 11 September 2014
WHAT YOU MUST KNOW ABOUT HIRE PURCHASE FINANCING
MyFinance Budget Portfolio | Personal Finance | Housing Loan | Personal Loan | Credit Card | Sharper Shopper | Calculators
The required documents to support your hire purchase financing agreement are your latest income documents, bank statements, identification card, vehicle driving license, and others. Once you have submitted your documents, you application should be reviewed within 1 week. If your application has been approved, it is very important to know certain elements as listed below before accepting the hire purchase financing offer.
1.The type of vehicle that I am purchasing
There are three types of vehicles in which you can apply for hire
purchase financing:
1) New vehicles
2) Used / pre-owned vehicles
3) Reconditioned vehicles
2. Is a Guarantor required to support my loan application?
Some hire purchase financing cases requires the support of a Guarantor. This may be because the applicant does not have strong credit record. For example, the applicant may be a first time car buyer (without any credit history record), the applicant may be too young for an expensive car with a high loan installment, the applicant may have very high credit exposure, and others. Thus the guarantor will be responsible for paying off the unpaid fees and charges should there be a default on the loan payment.
3. The initial Deposit
Usually, you need to pay a minimum deposit of 10% or more of the total cash value of your vehicle beforehand. Nevertheless, some banks may demand a higher deposit amount depending on the type of vehicle and market value for the vehicle. As for 2 door vehicles, banks will usually finance less than 90%. Normally up to 85% only.
4. Margin of Finance
In a hire purchase agreement, the conventional margin of hire purchase financing is up to 90% of your vehicle value.
5. Interest rate
The interest rates on your hire purchase agreement are divided into two categories – fixed or variable. Fixed or flat interest rate loans are more certain and consistent with a fixed installment amount. While for variable interest rate, the rates can fluctuate and change in accordance with the lender’s base lending rate (BLR).
6. Insurance
As a hirer, you will be required to insure and renew your car yearly as stated in your hire purchase agreement. Prior to approving your loan, you will usually be required to take out a comprehensive insurance coverage on your vehicle. (Please try our car insurance calculator to see how much you will need to pay for your car’s insurance)
7. Late Payment Charges
In hire purchase financing, you’ll be imposed a penalty fee and additional daily interest should you fail to make on-time payments.
8. Repossession
On the other hand, your car will be repossessed by the bank if you default on the monthly instalments as initially agreed by both parties in the hire purchase financing agreement.
Read More: http://MyFinance.com.my/articles/detail/9111401410
We also provide other various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
The required documents to support your hire purchase financing agreement are your latest income documents, bank statements, identification card, vehicle driving license, and others. Once you have submitted your documents, you application should be reviewed within 1 week. If your application has been approved, it is very important to know certain elements as listed below before accepting the hire purchase financing offer.
1.The type of vehicle that I am purchasing
There are three types of vehicles in which you can apply for hire
purchase financing:
1) New vehicles
2) Used / pre-owned vehicles
3) Reconditioned vehicles
2. Is a Guarantor required to support my loan application?
Some hire purchase financing cases requires the support of a Guarantor. This may be because the applicant does not have strong credit record. For example, the applicant may be a first time car buyer (without any credit history record), the applicant may be too young for an expensive car with a high loan installment, the applicant may have very high credit exposure, and others. Thus the guarantor will be responsible for paying off the unpaid fees and charges should there be a default on the loan payment.
3. The initial Deposit
Usually, you need to pay a minimum deposit of 10% or more of the total cash value of your vehicle beforehand. Nevertheless, some banks may demand a higher deposit amount depending on the type of vehicle and market value for the vehicle. As for 2 door vehicles, banks will usually finance less than 90%. Normally up to 85% only.
4. Margin of Finance
In a hire purchase agreement, the conventional margin of hire purchase financing is up to 90% of your vehicle value.
5. Interest rate
The interest rates on your hire purchase agreement are divided into two categories – fixed or variable. Fixed or flat interest rate loans are more certain and consistent with a fixed installment amount. While for variable interest rate, the rates can fluctuate and change in accordance with the lender’s base lending rate (BLR).
6. Insurance
As a hirer, you will be required to insure and renew your car yearly as stated in your hire purchase agreement. Prior to approving your loan, you will usually be required to take out a comprehensive insurance coverage on your vehicle. (Please try our car insurance calculator to see how much you will need to pay for your car’s insurance)
7. Late Payment Charges
In hire purchase financing, you’ll be imposed a penalty fee and additional daily interest should you fail to make on-time payments.
8. Repossession
On the other hand, your car will be repossessed by the bank if you default on the monthly instalments as initially agreed by both parties in the hire purchase financing agreement.
Read More: http://MyFinance.com.my/articles/detail/9111401410
We also provide other various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
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