Car financing - making capital payments (Wesbank)

[TheJman]

Bump...

So I see earlier posts say the interest is a mismatch. Ie the interest they charge is more than the interest they'll pay on an advance amount.

Based off my lastest experience with Wesbank, that's incorrect, they seem to indicate that it is the same interest rate for both.

What I need to determine is where it is compounded each month or not...

 

[CranialBlaze]

Bump...

So I see earlier posts say the interest is a mismatch. Ie the interest they charge is more than the interest they'll pay on an advance amount.

Based off my lastest experience with Wesbank, that's incorrect, they seem to indicate that it is the same interest rate for both.

What I need to determine is where it is compounded each month or not...

Not, as stated interest is rebated purely on the advance amount you paid in. So if your interest rate is fixed then assuming no additional advances by you, the rebate amount will remain the same each month.

 

[Sinbad]

Bump...

So I see earlier posts say the interest is a mismatch. Ie the interest they charge is more than the interest they'll pay on an advance amount.

Based off my lastest experience with Wesbank, that's incorrect, they seem to indicate that it is the same interest rate for both.

What I need to determine is where it is compounded each month or not...

It's the same and it's compounded.

 

[TheJman]

okay so two different answers then who is right! I'm hoping Sinbad!!

I have a feeling it is compounded, as the advance amount is say R1000, so at the end of month one, the interest is assume R10, which means I would then have R1010 advance, so the next month the amount of interest should be calculated off the R1010

 

[Sinbad]

okay so two different answers then who is right! I'm hoping Sinbad!!

I have a feeling it is compounded, as the advance amount is say R1000, so at the end of month one, the interest is assume R10, which means I would then have R1010 advance, so the next month the amount of interest should be calculated off the R1010

exactly this.

 

[TheJman]

exactly this.

Awesome, thanks man!

 

[CranialBlaze]

okay so two different answers then who is right! I'm hoping Sinbad!!

I have a feeling it is compounded, as the advance amount is say R1000, so at the end of month one, the interest is assume R10, which means I would then have R1010 advance, so the next month the amount of interest should be calculated off the R1010

I'm just going off what the fnb responder said. They said it's not compounded, who am I to argue with bank staff.

Also seeing as I had not known about this I had dumped 20k into my account 3m ago and the rebate was the same give or take a few bucks (linked rate) the last 2m,the first one was obviously a partial month.

 

[TheJman]

I'm just going off what the fnb responder said. They said it's not compounded, who am I to argue with bank staff.

Also seeing as I had not known about this I had dumped 20k into my account 3m ago and the rebate was the same give or take a few bucks (linked rate) the last 2m,the first one was obviously a partial month.

Haha! No anger or nit picking! Just literally cannot get a straight answer out of Wesbank call centre.

But you have living proof, so I guess it isn't - can you potentially draw out the interest?

 

[PsYTraNc3]

I hope I can shed some light on this.

I financed a vehicle with Wesbank 3 months ago and made a payment before the first debit order.
I can confirm that the rebate amount has increased slightly even though no further payments have been made so @Sinbad should be correct.

 

[CranialBlaze]

Haha! No anger or nit picking! Just literally cannot get a straight answer out of Wesbank call centre.

But you have living proof, so I guess it isn't - can you potentially draw out the interest?

As far as I can see its 1 way, but the rebate adds to your advance a mount so I presume once you complete the form the full amount gets allocated to the capital.

 

[Sinbad]

Remember your rebate change month to month is not going to be much unless you have a significant advance.

Assuming a R5k advance, on a finance of 10% pa
Month 1 your rebate will be .1 / 12 * 5000 = R41.66
Month 2 your rebate will be .1 / 12 * 5041 = R42
Month 3 - R42.35

So it may not be immediately obvious that it compounds.

 

[TheJman]

Yeah, that was my thinking, but if you put in say 20k - that compounding growth will be amazing!

 

[killerbyte]

Is there an easy way to calculate how much quicker you can pay off your car if you pay more?

 

[PsYTraNc3]

Is there an easy way to calculate how much quicker you can pay off your car if you pay more?

https://www.fscaconsumered.co.za/Consumer/Tools/Pages/CarLoan-IncreasedPayments.aspx

EDIT: This will work

 

[g0nt4du]

Guys feel free to reach out, I can explain the mechanics of the calculation if you'd like.

 

[g0nt4du]

My two cents... Given the state of the economy now, not much delivers a return of 10% EXCEPT debt that you already have which is probably costing you in that region.

So if you've got extra cash, one of the ways to earn a good return on it is to park it in the loan account. Banks deal with this differently. Some require you to notify them so that they allocate the money to the account's calculation (the big red one e.g.). Others don't need any notification, they automatically deal with any extra money to save you more (e.g. the black and white one)

This extra money then compounds in a way that means you pay off the loan sooner and pay less interest and fees over the lifetime of the account.

 

[Sinbad]

My two cents... Given the state of the economy now, not much delivers a return of 10% EXCEPT debt that you already have which is probably costing you in that region.

So if you've got extra cash, one of the ways to earn a good return on it is to park it in the loan account. Banks deal with this differently. Some require you to notify them so that they allocate the money to the account's calculation (the big red one e.g.). Others don't need any notification, they automatically deal with any extra money to save you more (e.g. the black and white one)

This extra money then compounds in a way that means you pay off the loan sooner and pay less interest and fees over the lifetime of the account.

Only caveat being that as far as I know, you cannot access that advance.

 

[johnjm]

Only caveat being that as far as I know, you cannot access that advance.

Of course you can with most banks.

 

[TheJman]

Only caveat being that as far as I know, you cannot access that advance.

Depends on the bank, each one has it's own mechanism

 

[g0nt4du]

Depends on the bank, each one has it's own mechanism

Correct. In a "access bond" and similar all the story is automatic. Extra money is savings and so on.

When you call for allocation it is a different story. I have never tried withdrawing from the excess that has been paid in on a vehicle loan.