Car financing - making capital payments (Wesbank)

TheJman

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Jul 16, 2011
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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.

So on FNB, seems like an interesting position whereby any funds paid over an above monthly installment are placed in advance. They do not allocate it to capital and your monthly installment remains the same. BUT it seems like they will 'pay' rebate interest on the advance amount at the same rate that they are charging you on our outstanding capital.

While this may seem as a net off arrangement, if the interest is compounded monthly, if you put in a large amount in advance, you could end up earning a much higher rate on that money, which with compounding, could land in an interesting position, depending on the capital amount you have in advance (sorry lots of assumptions in there!)
 

eshwar

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Mar 22, 2011
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Well if you're getting the interest in rebate then yes, that would naturally compound. But it would have the same effect as the funds in advance having been used to count against the outstanding balance. So it's just accounting magic but same answer.

It's probably an artefact of how their system works.
 

deweyzeph

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Does the rebate interest you get count towards your interest income for tax purposes? In other words, do you have to declare the rebate interest on your tax return? I'm guessing not, because it's a "rebate" which effectively means you getting interest back that you have already paid, not actually earning any interest. But I would like to know. As far as I know Wesbank has never issued me with an IT3B certificate for the rebate interest (I have a substantial amount of money paid in advance on my loan that I have not yet capitalised).
 

Sinbad

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Does the rebate interest you get count towards your interest income for tax purposes? In other words, do you have to declare the rebate interest on your tax return? I'm guessing not, because it's a "rebate" which effectively means you getting interest back that you have already paid, not actually earning any interest. But I would like to know. As far as I know Wesbank has never issued me with an IT3B certificate for the rebate interest (I have a substantial amount of money paid in advance on my loan that I have not yet capitalised).
no it does not.
 

Rouxenator

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Might be doing this shortly. If it saves me a bit each month I'm happy.
 

Rouxenator

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I made another payment for R20k earlier this week and emailed them asking to deduct this from the capital I owe. Still no reply as of yet.

After checking just now I can see the transfer went through and that I am R25k in advance.

Sent another email asking for capital reduction and to let me know what my new repayments will be. Currently I am paying about R2600 per month.
 

Messugga

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Sep 4, 2007
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I made another payment for R20k earlier this week and emailed them asking to deduct this from the capital I owe. Still no reply as of yet.

After checking just now I can see the transfer went through and that I am R25k in advance.

Sent another email asking for capital reduction and to let me know what my new repayments will be. Currently I am paying about R2600 per month.
Have you tried phoning them?
 

deweyzeph

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I made another payment for R20k earlier this week and emailed them asking to deduct this from the capital I owe. Still no reply as of yet.

After checking just now I can see the transfer went through and that I am R25k in advance.

Sent another email asking for capital reduction and to let me know what my new repayments will be. Currently I am paying about R2600 per month.
Why not just forget about the capital reduction and keep paying the same amount? That way you'll pay of the vehicle a lot quicker.
 

CranialBlaze

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Jan 24, 2008
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No, I like to keep thing textual.


I'd rather save on my monthly expenses, even if it is just a few hundred rand.

I am convinced they don’t get those email, had the same thing after 3 months I gave up and called after 8 mails and they claimed to have received none of them
 

Rouxenator

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I am convinced they don’t get those email, had the same thing after 3 months I gave up and called after 8 mails and they claimed to have received none of them
They did reply to an enquiry I sent last year, so I hope I am in luck again.
 

Rouxenator

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Jeez this was retarded.

I get a missed call from an private number, something I never answer. Followed by an SMS and email saying it's Wesbank and they are trying to call me in connecting with my capital reduction.

I reply to the SMS (and email) saying there is no need for phone calls, you have the request in writing, please proceed.

After waiting 15 minutes on a call they tell me it needs to be done over the phone so it is recorded. FFS, it is already "recorded" in the email. For a company trying to get people to do self service this is the most backwards thing ever.

Anyways, rant over, knocked R25k off the capital and my repayment went down from R2500 to R2000 per month.
 

deweyzeph

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Jeez this was retarded.

I get a missed call from an private number, something I never answer. Followed by an SMS and email saying it's Wesbank and they are trying to call me in connecting with my capital reduction.

I reply to the SMS (and email) saying there is no need for phone calls, you have the request in writing, please proceed.

After waiting 15 minutes on a call they tell me it needs to be done over the phone so it is recorded. FFS, it is already "recorded" in the email. For a company trying to get people to do self service this is the most backwards thing ever.

Anyways, rant over, knocked R25k off the capital and my repayment went down from R2500 to R2000 per month.

I agree, the way they handle it is ridiculous. It should be a completely automated process. There should just be a "Capitalise" button next to your "Arrears/Advance Amount" in the Wesbank portal, and you press it and that's that.
 

Other Pineapple Smurf

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Jun 21, 2008
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Jeez this was retarded.

I get a missed call from an private number, something I never answer. Followed by an SMS and email saying it's Wesbank and they are trying to call me in connecting with my capital reduction.

I reply to the SMS (and email) saying there is no need for phone calls, you have the request in writing, please proceed.

After waiting 15 minutes on a call they tell me it needs to be done over the phone so it is recorded. FFS, it is already "recorded" in the email. For a company trying to get people to do self service this is the most backwards thing ever.

Anyways, rant over, knocked R25k off the capital and my repayment went down from R2500 to R2000 per month.

Just paid off my car in advance with Wesbank last month. Was paying an extra R4K-R8K per month.

If you don't get the amount knocked off the capital, then they just reverse the interest. If it's small amounts, then the delay in reversing the interest is really negligible and not worth the time.

The only advantage I saw on reversing the capital was to reduce the monthly repayments but I was dedicated to pay it off ASAP.

They keep the amount as "advanced amount" and then adjust capital balance on statement:

1628587760811.png

1628587827121.png


Paying off the car in advance was the best thing I did this year and nothign beats a car you own.
 

Rouxenator

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Nice, yeah I know the feeling of owning a car. I have settled all my cars before the finance period was over. Mostly because I knew I had something extra coming my way when purchasing. So I only had them on finance for a couple of months before settling.

The current one will take a bit longer but at the moment my settlement amount is at R90k so I should be able to settle that long before the remaining 55 payments are due.

I do have some cash in my access bond and at prime minus two on the bond I would rather pay of the car sooner since it is at a higher interest rate.
 

Sinbad

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Jun 5, 2006
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Just transfer the money in and forget it. It will automatically reduce your interest which is basically the same as capitalising it. You will pay the loan off quicker automatically..
 

Rouxenator

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Oct 31, 2007
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Just transfer the money in and forget it. It will automatically reduce your interest which is basically the same as capitalising it. You will pay the loan off quicker automatically..
Yes, but you will be paying the same installment. I used this "process" to turn a bonus I got into an "increase" - well it has the bottom line effect thereof which is what I am after.
 
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