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| Thread ID: 39342 | 2003-11-04 00:17:00 | OT: Hirepurchases and Interest rates | csinclair83 (200) | Press F1 |
| Post ID | Timestamp | Content | User | ||
| 188986 | 2003-11-04 00:17:00 | If someone has a hirepurchase and theres interest on top of it... and if they pay it allll off early, say the contract was 3 years and its already been 1 year a half, and they can now pay the whole thing off and they do....do they get anything back for the interest that they paid but didnt need to since it was 1.5 years early repayments? as i know some places say "you pay earlier you come off better" like pay it early u dont have much interest to pay?...but how does that work with Hirepurchases? or is it bad luck? you signed it for interest and principle so u pay the lot back? |
csinclair83 (200) | ||
| 188987 | 2003-11-04 00:27:00 | Usually with hp you lose if you pay early because you contract to have hp for a set time. | mikebartnz (21) | ||
| 188988 | 2003-11-04 00:41:00 | well,i dunno about that,in everycase ive had things on HP ringing the finance company and asking for the pay out price if payed on the day has always been lower then the total cost of repayments over the life of the loan...... | metla (154) | ||
| 188989 | 2003-11-04 01:05:00 | It may be lower but if you do a true costing you will usually find it is better to run with the contract. | mikebartnz (21) | ||
| 188990 | 2003-11-04 01:44:00 | It can go either way. The finance company has worked out its rake off over the whole period. Some don't mind you paying off early , and whack a penalty on. :-( Some don't mind you paying off early, and don't. :-) It will be specified in the contract. They won't penalise you if you ask them. :D Some will "let you off" even if they are entitled to charge a penalty in the contract. It depends on how much they want your repeat business. |
Graham L (2) | ||
| 188991 | 2003-11-04 01:59:00 | well,if i payed off my house tomorrow it would cost 80 odd grand,yet if i stick to the "deal" put together by the bank then its going to cost near 260 grand........ ......now i need a drink...... |
metla (154) | ||
| 188992 | 2003-11-04 02:08:00 | Simple, metla. Just pay it off. Use your credit card. :D :D :D | Graham L (2) | ||
| 188993 | 2003-11-04 04:48:00 | It's not so much a matter of signing up for $X.00 principal and $X.00 interest, and if paying it off early one has a "penalty". HP does not work on equal payments, rather something called the "1 in 78 Rule". What that says is that there are variable principal and interest components. The first payment has a much higher interest content against principal, than the last payment, where most of that goes towards the principal, as the interest component is almost satisfied. So the payout will vary according to the point in the contract you have reached. You should find some loan repayment sites somewhere where you can enter the variable data. Hope this makes sense! | WalOne (4202) | ||
| 188994 | 2003-11-04 04:57:00 | No . The actual term often used is "Penalty for early repayment" . The amount to be paid off is the remaining capital amount . The company has produced a payment schedule, which is part of the contract . But now it's the borrower who wants to save some interest by paying the owed amount early . As I said, some companies allow this . Some charge a penalty, which is stated in the contract . If they don't include the penalty clause, and allow early repayment, they can't charge the penalty . Usually whether they allow early repayment is also in the contract . It's no help entering numbers into an online calculator . Asking the finance company is the only way to get the correct answer . |
Graham L (2) | ||
| 188995 | 2003-11-04 05:10:00 | quoted off website "If the cash price of the goods is under $15,000 you can pay the hire purchase off early at any time. You will be entitled to a rebate. This is a reduction in the amount that you have agreed to pay. There are rebates for the finance charges (interest and booking fees), insurance charges and maintenance service contracts. The Hire Purchase Act sets out a formula for rebates. " website is: Here (www.consumeraffairs.govt.nz) Thats my answer...i am entitled...i know it probably going to be hardly anything but yeah... and in the contract it doesnt mention 1 word about early payments but mentions that if its late u get penalty interest... and yes have emailed finance company but havent heard back yet... |
csinclair83 (200) | ||
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